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January 27, 2008; revised February 17

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1 January 27, 2008; revised February 17
CONNECT SI Southern Illinois: Garden of the Gods Readiness Assessment Chapter 6: Regional Perspectives January 27, 2008; revised February 17 ViTAL Economy Alliance Frank Knott, Project Lead; Stan Halle, Senior Editor; Jim Haguewood, Rob Beynon, & Neil Gamroth, Principal Economic Researchers 1

2 Table of Contents EXECUTIVE OVERVIEW: the Big Picture & Importance of Change in SI READINESS ASSESSMENT (RA) 1. State, National & Global Trends 2. Indigenous Resources & Industry Asset Mapping 3. Enabling Environment Necessities 4. Climate of Innovation, Incubation & Entrepreneurship 5. Southern Illinois Competitiveness 6. Regional Perspectives 7. Roadmap to Success APPENDICES 6.01 Demographic Picture 6.02 Economic Picture Across SI 6.03 Economic Picture by Sub-Region (COI) 6.04 Livable Community: Assessment 6.05 Infrastructure: Assessment 6.06 Healthcare: Assessment 6.07 Implications & Recommendations 2

3 Chapter 6: Regional Perspective
Southern Illinois — "Garden of the Gods" This Chapter of the RA provides a regional and sub-regional perspective and analysis in preparation for an overall SI economic strategy. Each sub-region (aka geographic COI) contains unique assets that can be leveraged to support the achievement of the overall Connect SI community and economic development goals. Chapter 6: Regional Perspective 6.01 Demographic Picture ……………………………………………….. 4 6.02 Economic Picture Across SI ………………………………………. 10 6.03 Economic Picture by Sub-Region (COI) …………………………. 26 6.04 Livable Community: Assessment …………………………………. 64 6.05 Infrastructure: Assessment ………………………………………… 84 6.06 Healthcare: Assessment …………………………………………… 89 6.07 Implications & Recommendations ……………………………….. 116

4 Chapter 6: Regional Perspective
Southern Illinois — "Garden of the Gods" This Section provides a condensed overview of the demographic trends across SI, focusing on youth brain drain and educational attainment. Chapter 6: Regional Perspective 6.01 Demographic Picture

5 SI: Sizeable Population . . .
6.01 Demographic Picture Over 419,992 residents in SI region, comparable to a major metropolitan area (as of 2006) Greater Egypt corridors of Highway SR13 & I-55 and the home of SIU contain most of the region’s population Three rural sub-regions are approximately equal in geographic area SI represents 3.3% of total IL population % of the Total Population by Sub-Region 12% 61% 15% Critical mass exists in Southern Illinois! Source: Census Bureau data 2002, 2006

6 SI Youth and Young-Adult Brain-Drain-Gap
6.01 Demographic Picture Southern Illinois % Population Growth (census-to-census) SI is losing tomorrow’s workers, year olds Over 18 population: 65.7% have high school education, 13.2% have Bachelors degrees Recent trends show that high achievers are leaving the area Recapturing departing youth is key to labor pool and economic growth +0.9% TOTAL POPULATION -7.2% 20-29 YEAR OLDS Without the next generation of workers, Connect SI strategies will be much more difficult to achieve Source: BEA and U.S. Census update data

7 Age Distribution Comparison
“We Loose the Best and Brightest: SI Adults Tell Our Children That There Will Be No 21st Century Opportunity in SI” 6.01 Demographic Picture Losing Your Future Workforce SIU and the community colleges generate an above average year old population This young population leaves the region for more attractive opportunities, despite SI having the resources that should help retain them Increasing Your Burden SI is losing its most productive age group while increasing the resource-demanding demographic of retirees Age Distribution Comparison Increasing Your Burden Losing Your Future Workforce The youth are already here — they need to be proactively retained Source: U.S. Census Bureau – Table QT-P1: Age Groups and Sex: 2000 and RA Interviews 7

8 SI Educational Attainment Gap
6.01 Demographic Picture Population with High School or Higher in SI Regions vs. IL SI region lags Illinois in high school completion Bachelor and higher degrees of education, SI is less than half Illinois rate Trends run counter to modern need for increased levels of education and training Population with Bachelor Degree or Higher in SI Regions vs. IL 34% of adult workers in the U.S. have a bachelor degrees or more; almost three times the SI rate Source: U.S. Census Bureau (2000 Census)

9 Demographics Summary 6.01 Demographic Picture SI is the size of a major metro area — but doesn’t yet behave like one The entire region is suffering from significant youth brain drain A declining youth demographic is a major challenge to developing successful economic development strategies The population is aging in line with the entire U.S. This will have a larger impact on the region if SI cannot recapture the youth leaving and influencing this shift SIU and the community college infrastructure provides a key driver to shift the aging demographic trend in SI The overall educational attainment level will need to be increased for SI to compete in a global economy — 9 — 9

10 Chapter 6: Regional Perspective
Southern Illinois — "Garden of the Gods" This Section provides a condensed overview of the economic development assets, conditions and trends for all of SI. Chapter 6: Regional Perspective 6.02 Economic Picture Across SI

11 SI Regional Introduction
6.02 Economic Picture Across SI SI population and economy are similar to that of a major metropolitan area Even with this size Southern Illinois suffers from lack of political clout state-wide due to the “Chicago-land” influence The cities bordering SI in neighboring states are attractive and draw money and resources out of the region A significant proportion of medical patient dollars from the region travel to surrounding states Attractive job opportunities have been created in the neighboring cities that result in out-migration of disposable income expenditures Many top management personnel live in these communities and work in SI From the SI region lost over 2,300 manufacturing jobs or 20% of that sectors employment Greater Egypt dominates the SI region with respect to population and GDP, but not in average wage levels Government transfer payments comprise 64% of the regions personal income The region possesses a strong and experienced social services infrastructure SI’s land base is dominated by agriculture designation, but has been experiencing declining economic benefit (through 2005) 37% of BC’s total economy comes from Heartlands natural resource assets 17-26% of government revenues come from natural resource assets and wage related taxes BC’s Heartlands natural resource sectors contribute 77% of BC’s international exports 71% of manufacturing shipments 63% of exports of goods to other provinces 30% of natural resource sector employees work in the Lower Mainland 22% of BC’s non-residential capital investments are provided by the natural resource sector Heartlands resource firms are significant customers of BC’s logistics and transportation services sector Resource sector related firms occupy the largest share of office space in the Lower Mainland Per capita the Heartlands generate 3x’s the value of exports that BC’s urban centers do 11

12 Economic Profile: Southern Illinois
6.02 Economic Picture Across SI SI # of Jobs by Region Employment by Sector Number % Average Wage Wholesale & Retail 28,910 14% $29,339 Government 26,597 13% $51,139 Health 22,210 11% $29,363 Other 20,320 10% $29,649 Natural Resources 20,246 $35,097 Manufacturing 18,009 9% $54,310 Tourism 16,862 8% $16,332 Education 14,984 7% $28,285 F.I.R.E. 12,525 6% $59,720 KBEs 9,011 4% $57,617 Construction 8,996 $48,246 Transport & Utilities 8,627 $52,414 Total 207,297 100% $38,952 Overview: Employment: 207,297 Labor Participation rate 66.5% GDP: $17.6 billion Top three GDP producers Government – 20% F.I.R.E. – 18% Natural Resources – 13% Source: BEA data; VE Economic Scenario Model F.I.R.E = Finance, Insurance & Real Estate 12

13 Greater Egypt Dominates SI Economy
6.02 Economic Picture Across SI 64% 14% 11% GDP by Sub-Region Population by Sub-Region Source: Census Bureau 15% 12% 61% Source: Connect SI Economic Scenario Model Greater Egypt's economic progress should be linked to the other sub-regions Achieving a sustainable and growing SI economy, requires that all sub-region assets should be integrated and leveraged It takes critical mass to be globally competitive Collaboration is how SI gets there!

14 Population and Wages: SI versus Illinois & U.S.
6.02 Economic Picture Across SI Cumulative Population Trend (1980 – 2005) 30.5% 11.6% (-3.0%) Population in Southern Illinois has seen a decline in the past 25 years — a dramatic difference vs. Illinois and U.S. trends Total wage growth in SI has been slow, far outpaced by that of both U.S. and Illinois Growth in Wages Over 25 Years (1980 – 2005) 73% Higher Than SI 63% Higher Than SI Source: Bureau of Economic Analysis

15 6.02 Economic Picture Across SI
Average Wages Lagging 6.02 Economic Picture Across SI 2005 Average Wage by Sub-Region versus IL SI region average wages are almost 30% lower than the state average While IL wages are above the U.S. on average, SI wages remain below Lower wages mean lower consumer spending power with additional impacts on healthcare, education and social services Greater Egypt’s economy is four times the size of the other sub-regions, has the largest base of innovation assets, and two of its counties are rated as Creative-Class Counties, yet its wages are no higher than rest of SI Source: BEA, Regional Economic Accounts 15

16 SI Per-Capita Wages are Low and Per-Capita Transfer Receipts are High
6.02 Economic Picture Across SI Southern Illinois SI currently underperforms Illinois — Connect SI’s initiative would push transfer receipts down and push per capita wages up Source: Bureau of Economic Analysis Regional Bare Facts ; 2006

17 Where SI Personal Income Comes From
6.02 Economic Picture Across SI GW GE SE S5 SI Illinois U.S. Total Personal Income (% of personal income composition) 100.0% Earnings by Workplace 57.0% 69.0% 54.5% 52.0% 63.5% 79.5% 78.0% Wage and Salary Disbursements 35.4% 48.8% 36.5% 35.1% 43.7% 57.3% 55.5% Supplements to Wages and Salaries 10.7% 13.2% 9.4% 9.6% 11.9% 13.5% 13.3% Proprietors' Income (Business Owners) 10.9% 7.1% 8.6% 7.3% 7.8% 8.7% 9.2% Adjustment for Residence -0.3% 7.0% 10.6% 3.2% 0.0% Dividends, Interest, and Rent 18.5% 16.6% 15.9% 14.4% 16.5% 15.8% Personal Current Transfer Receipts 21.4% 21.7% 28.2% 23.3% 12.8% 14.7% Less: Contributions for Government Social Insurance 5.7% 5.2% 6.5% 8.4% 8.5% SI earnings by workplace are 25% lower than Illinois, 23% lower than US SI needs to grow the job base by at least 20% = 40,000+ new jobs Source: Bureau of Economic Analysis Regional Bare Facts 2006; Connect SI Economic Model

18 6.02 Economic Picture Across SI
SI Dependency on Government Transfer Payments Exceeds State & National Benchmarks 6.02 Economic Picture Across SI 2006 Government Transfer Payments as % of Total Earnings SI IL U.S. SI region’s income is comprised of 23.1% government transfer payments, compared with just 12.6% for IL and 14.2% for U.S. Highest dependency on government transfer payments in Southern Five and Southeastern — percent of income through such payments exceeds 25% Dependence on government payments restrains regional economic development and hinders entrepreneurial spirit Transfer payments: income payments to persons for which no current services are performed — payments by government and business to individuals and nonprofit institutions serving individuals Source: Bureau of Economic Analysis Regional Bare Facts 2006

19 Only 46% of SI Personal Income is Generated by Private Sector Employment
6.02 Economic Picture Across SI 54% 33% 36% 46% 67% 64% Private Sector Payroll & Benefits by Sub-Region GW - 48% GE - 53% SE - 42% S5 - 38% Increasing private sector percentage of personal income generation is crucial to building a climate of innovation Source: BEA & ViTAL Economy Analysis

20 Income Sources: Impact on the Region
6.02 Economic Picture Across SI SI needs a 30% increase in private vs. public sector earnings to equal the U.S. ratio between public and private earnings Majority of income received from the public sector reduces the climate of entrepreneurship in the region and creates a risk-averse environment Smaller amount of per-capital income generated through productive purposes versus a much larger amount received from public sources and other transfer payments results in a weak view of business and economic opportunity Income disparity creates negative opportunity image for youth in the region for productive work Income disparity fuels the youth brain drain in the region by suppressing any youthful sense of hope and opportunity With only 46% of income received from private sector earnings, SI’s ability to afford the community and economy it wants is greatly limited

21 SI Land Utilization is Less Than 3% Urban & Built
6.02 Economic Picture Across SI Sq. Mi. 5,229 1,581 239 671 216 369 8,306 Sq. Mi. Land Mass Utilization SI developed land mass is only 57% the size of Shawnee National Forest Shawnee National Forest is 5% of SI land base S5 SE GE GW SI Agriculture 47% 59% 65% 80% 63% Forests 21% 28% 16% 13% 19% Urban & Built 2% 3% 4% Wetland 8% 10% Surface Water 1% Barren & Exposed Land 20% 0% Source: Illinois State Dept of Natural Resources

22 The Value of SI Land is Shifting
6.02 Economic Picture Across SI 1997 2002* % Change Land in Farms (Acres) 1,185,000 1,192,000 1% Market Value of Production ($) $184,331,000 $151,092,500 -18% Government Payments ($) $12,919,000 $16,235,000 26% *2007 Agriculture statistics will reflect higher market value per acre due to increased commodity prices, especially for hybrid ethanol corn Since 2000: Number of farms and acres being farmed has stayed relatively stable Value of farmland and buildings has increased by 27% Cropland rent per acre has increased by 20% Up to 60% lower yield in crop value per acre compared to Central Illinois or Northern Illinois Soil and moisture characteristics account for much of the lower yield Source: NASS 2002 Census of Agriculture

23 6.02 Economic Picture Across SI
SI KBE: Professional, Scientific, Technical and Information (PST&I) Work Force Gap 6.02 Economic Picture Across SI PST workers include those in establishments specializing in professional, scientific and technical activities — engineering, computers, architecture, law, and accounting Information industry “I” workers work with telecom and information networks KBE success largely related to PST sector of the economy (90% of new jobs) PST workers as percent of economy indicates ability to benefit from this growth area SI has 50% fewer PST&I workers than IL and U.S. at a time when they are the fastest growing job sectors of the U.S. economy 7.7% 8.5% 4.3% Region KBE Workers % of SI KBE Greater Egypt 6,227 69% Greater Wabash 907 10% Southeastern 1,070 12% Southern Five 808 9% SI Total KBE 9,012 4.3% Sources: BLS, IDES, BEA

24 6.02 Economic Picture Across SI
Current State: Southern Illinois 6.02 Economic Picture Across SI Traditional Business Strengths Agriculture: corn and soybeans Energy: coal and oil Southern illinois university Manufacturing Marine transportation and logistics Rising Business Stars Transportation and logistics Tourism, including ecotourism and vineyards Clean coal technologies Health services Advanced manufacturing Arts and artisans Young entrepreneurs People, Land & Jobs % of IL Land Mass = 15.0% % of IL Population = 3.3% % of IL Employment = 2.8% Dependencies Public sector employment Transfer payments Social security Pensions Farm subsidies Notable Home to 2nd largest university in Illinois Shawnee National Forest Mississippi, Ohio, and Wabash Rivers Interstate highway system and CN Rail SICCM (Southern Illinois Collegiate Common Market) Mid-America geographic location Rich historical area and assets Proximity to five major metro areas 24

25 6.02 Economic Picture Across SI
Opportunities & Challenges: Southern Illinois 6.02 Economic Picture Across SI Opportunities Natural resources Transportation & logistics Homeland security Recreational tourism Geography, climate & location Quality of life Proximity to markets Senior living KBE and innovation Challenges Broadband coverage Geographic isolation Political climate Business attractiveness Curb appeal Regional identity Workforce availability Focus on sunset industries Self image and respect Limit climate of collaboration Key Trends Youth population decline Hwy 13 I-57 corridor growth SIU declining enrollment Medical professional recruitment difficulties Coal economy rebirth Upscale tourism unaddressed Expanded internet infrastructure One Region – One Vision Aging population Growth Enablers Emerging KBE businesses Business incubation structures Business startup capital, angel investor networks Regional branding Value-added manufacturing strategies Connectivity & collaboration Entrepreneur networks Business and industry clustering Technology transfer e-Commerce development 25

26 Chapter 6: Regional Perspective
Southern Illinois — "Garden of the Gods" This Section provides economic factors that were identified by each of the four geographic COIs, plus notable trends, and 2012 goals. Chapter 6: Regional Perspective 6.03 Economic Picture by Sub-Region (COI)

27 The 20 Southern Counties of Illinois bounded by the Mississippi, Ohio and Wabash Rivers
6.02 Economic Picture by Region Connect-SI Region 130 Miles East-West Connect SI includes 4 sub-regions: Southern Five Union, Johnson, Alexander, Pulaski, Massac Southeastern Pope, Hardin, Saline, Hamilton, Gallatin Greater Wabash White, Wayne, Edwards, Wabash Greater Egypt Randolph, Perry, Jackson, Jefferson, Franklin, Williamson GW GE 100 Miles North to South SE S5 Population = 423, Workforce = 207,297 Source: U.S. Census Bureau 2006; VE Economic Scenario Model 27

28 Economic Profile: Southern Five COI
6.03 Economic Picture by Sub-Region SI Number of Jobs by Region Employment by Sector Number % Average Wage Government 4,076 17% $51,139 Wholesale & Retail 3,027 12% $31,953 Natural Resources 2,932 $22,236 Health 2,541 10% $29,363 Tourism 2,444 $16,329 Manufacturing 1,568 6% $54,310 F.I.R.E. 1,359 $59,035 Education 1,228 5% $28,285 Construction 1,145 $48,246 Transport & Utilities 963 4% $55,430 KBEs 809 3% $57,478 Other 2,225 9% $29,549 Total 24,317 100% $37,641 Overview: Labor Participation Rate – 62.8% GDP: $2.1 billion Top three GDP generators Government – 26% F.I.R.E. – 17% Natural Resources – 12% Source: BEA Data and RIMS II multipliers 28

29 6.03 Economic Picture by Sub-Region
Southern Five Population Trends Prison Population Removed (None in S5 Open in 1980) S5 6.03 Economic Picture by Sub-Region 1980 2004 est. Change 2004 est. No Prison No Prison Alexander 12,280 9,228 (-24.9%) 8,774 (-28.6%) Johnson 9,691 13,029 34.4% 9,431 2.7% Massac 15,036 15,294 1.7% Pulaski 8,847 6,950 (-21.4%) Union 17,857 18,195 1.9% Southern Five Region 63,711 62,696 (-1.6%) 58,644 (-8.0)% Comparison during same period: USA +13.1%: Illinois +11.2%; Illinois (without Prison Population) +10.9% Alexander County has experienced the greatest population decline of any SI county, over 25% since 1980 Source: COI Milestone and U.S. Census Data

30 Region Losing Best Resource: Young Adults (No Prison Population included)
6.03 Economic Picture by Sub-Region IL S5 Fewer Children More Retirees Aging Population (2004) Young Adults as % of Population (2004) Source: U.S. Census, Prison Population Removed

31 Intermodal Transportation Opportunity
6.03 Economic Picture by Sub-Region Strategic Position of Cairo, Alexander County: Junction of the Mississippi and Ohio Rivers Interstate 57 Proximity to Interstate 55 and 24 Major rail carriers Trends: Large part of U.S. trade deficit is comprised as empty containers returning to Asia Development of CN Rail traffic in the Midwest Increasing container-on-barge traffic on the Mississippi Production of export products in or in proximity to SI including cotton, soy, corn, pulp, silica Active regional transportation providers engaged in river and barge traffic and trucking Opportunity: connect regional products with export markets via transportation infrastructure and services Projected annual economic impact of this Intermodal opportunity is estimated at ~$100 million in GDP (est. 1,182 direct, indirect & induced jobs) Source: ViTAL Economy Economic Scenario Model & Inter VISTAS Intermodal Study for City of Cairo, SIDEZ & USDA

32 6.03 Economic Picture by Sub-Region
Economic Profile: Southern Five COI S5 6.03 Economic Picture by Sub-Region S5 Traditional Business Strengths Government Mississippi barges Forestry Transportation Recreation and tourism S5 People, Land & Jobs % of IL Land Mass = 3.3% % of IL Population = 0.50% % of IL Employment = 0.33% S5 Dependencies Government employment Transfer payments Government dependence on casino revenues S5 Rising Business Stars Transportation and logistics Tourism, including ecotourism and vineyards Energy, including ethanol, bio-diesel Advanced manufacturing Artisans and arts Proposed coal gasification plant Harrah’s Casino — Metropolis Wineries Golf course & residential development Mermet Springs Diving Center LaFarge Concrete Plant S5 Notable Mississippi and Ohio Rivers CN Rail North-South line Interstate 55 Tourism, heritage sites & events, e.g.: Ft. Massac Civil War Encampment Superman Festival Indian settlements Unique climate & long growing season Shawnee College Mermet Springs Wine, golf, B&B trails Extensive social service expertise 32

33 Southern Five COI: Goals
6.03 Economic Picture by Sub-Region Southern Five Region (23 Feb 2007) Baseline 2012 Same  Trend 2012 Goal Change vs. Baseline Change vs Same Population (2004) 58,644 53,971 63,000 +7.4% +16.7% Employable Population (16-64) (2000) 35,887 33,014 40,950 +14.1% +24.0% Labor Participation (16-64) (2000) 62.8% 71.0% +13.1% Employed 2004 All Ages 24,317 25,550 26,856 +10.4% +5.1% Average Wage 2004 $27,959 $35,980 $37,591 +$9,632 +$1,611 Total Region Wages 2004 $679.9m $919.3m $1,010m +$329.7m +$90.3m Determination of specific measurable, wage & employment goals from change in regional wages vs trend NEW JOBS: WAGE: $43, $34.1m NEW JOBS AT AVERAGE WAGE: WAGE: $36,517 $19.6m IMPROVEMENT OF EXISTING JOBS: 4, WAGE: $5,000 $24.3m CLIMATE OF ECONOMIC OPPORTUNITY: $12.2m 33

34 Southern Five COI: Opportunities
6.03 Economic Picture by Sub-Region KBE Process materials and piping, CO2 in process piping Mental health expertise, exportable mental health product Wetland recovery, flood plains Music production, college instruction and local artists Local history experts Artisans and products Goal: Start 35 businesses with 10 employees each by 2012 Logistics/Transportation Identify best practices and trends in trucking and transportation Identify additional training funds for programs Closure of Cairo Airport, best practices of airports in rural areas, location, operations, security issues, trends in air transport Energy Learn from other communities that have gone through a large project development process Improve communication between communities within 20 county area Research switch grass cellulose potential Nuclear power Tourism B&B’s golf and wineries; build off of successful activities Dining and restaurant needs in support of tourism Aggregate demand with wineries and B&B’s Define the specific regional tourism goals, quantifiable and measurable Linking the different trails together

35 6.03 Economic Picture by Sub-Region
Southern Five: Highlights S5 6.03 Economic Picture by Sub-Region S5 Opportunities Geography location; transportation & logistics 50% of U.S. market within 10 hours of S5 Community College System and SIU Increase healthcare availability Tourism, bed & breakfast, wineries Shawnee National Forest and state parks Agribusiness opportunities (e.g. ethanol and bio-diesel) Unique natural locations Significant historic site Senior services S5 Key Trends Strong core of community leadership Growth of bed and breakfast facilities Expansion and growth of lodging facilities in Metropolis Investment in residential developments Region is receiving major investments attention Most high level executives do not live in the area Limited availability of workforce S5 Challenges Lack of skilled workforce for current and future jobs Lack of cooperation, collaboration, and regionalism S5 lacks the assets to grow and retain tech-based jobs No sense of urgency K-12 system needs support Limited healthcare availability to Alexander, Johnson and Pulaski Counties Electrical rates “There are so many problems, where do you start” S5 Climate for Growth Travel and tourism; history, experience Outdoor recreation activities and events Mississippi and Ohio river transportation Golf and wine trails Transportation and logistics Alternative energy Source: Connect SI COI, RA Interviews and VE

36 Economic Profile: Southeastern COI
SE 6.03 Economic Picture by Sub-Region Employment by Sector SE Number of Jobs by Region Number % Average Wage Natural Resources 3,706 17% $36,730 Wholesale & Retail 2,919 13% $32,522 Government 2,763 $51,139 Health 2,264 10% $29,363 Tourism 1,590 7% $16,329 F.I.R.E. 1,336 6% $60,261 Transport & Utilities 1,109 5% $51,629 Construction 1,100 $48,246 Education 1,021 $28,285 Manufacturing 823 4% $54,310 KBEs 1069 $58,134 Other 2,203 $29,352 Total 21,903 100% $39,458 Overview: Labor Participation Rate – 69% GDP: $2.0 billion Top three GDP generators Natural Resources – 22% Government – 18% F.I.R.E. – 17% Source: BEA Data and RIMS II Multipliers 36

37 Southeastern: Population Trends
SE 6.03 Economic Picture by Sub-Region 1980 2005 est. Change Gallatin 7,590 6,152 (-18.9%) Hamilton 9,172 8,301 (-9.4%) Hardin 5,383 4,718 (-12.3%) Pope 4,404 4,211 (-4.3%) Saline 28,448 26,072 (-8.3%) SE Region 54,997 49,454 (-10.0%) Comparison during same period: USA +13.1%, Illinois +11.2%; (without Prison population 10.7%) In the past 25 years, all five SE counties have lost significant population Source: COI Milestone

38 Shawnee National Forest Visit Profile and Projections Room for Increased Daily Spend Rates
6.03 Economic Picture by Sub-Region Current Impacts: Shawnee National Forest Annual Visitation 500,000 Characteristic Local Day Trips Non-local Day Trip Motel Camp TOTAL Current Visitors 46% 12% 27% 9% Visitor Segment 230,000 60,000 135,000 45,000 500,000 Shawnee Spend $27 /day $118 /day Est. $113 /day $64 /day Estimated Expenditures $6.2 m $1.6 m $15.9 m $5.1 m $30.2 m National Spend $33 /day $ 52 /day $181 /day Est. $143 /day $105 /day Potential Expenditures $7.6 m $3.1 m $24.4 m $6.4 m $41.6 m Potential Revenue Gain $1.3 m $1.5 m $8.5 m $1.4 m $12.7 m Source: NPS Spending and Payroll Impacts, 2005, Spending Profiles for National Forest Visitors, May 2005 Note: Total potential spend for Shawnee is based on totaling national spend category columns, not total visitors x average national spend

39 Shawnee National Forest: Opportunity
SE 6.03 Economic Picture by Sub-Region Increased spending leads to tourism jobs Achieving national averages of daily spend rate estimated to create 235 new jobs in Southern Illinois This is based on forest-related spending alone Increased non-forest spending would create more jobs Infrastructure and camp improvements are needed to achieve this result 25 New Jobs 30 New Jobs 160 New Jobs Non-local Day Trips Camp Motel Local Day Trips TOTALS Note: Analysis based on BEA RIMs II model analysis Increased Spend Rates to National Averages Would Create 235 Jobs

40 6.03 Economic Picture by Sub-Region
Economic Profile: Southeastern COI SE 6.03 Economic Picture by Sub-Region SE Traditional Business Strengths Coal mining Agriculture Hunting Aggregate rock Historical sites and museums Barge and river industry SE People, Land & Jobs % of IL Land Mass = 3.07% % of IL Population = 0.40% % of IL Employment = 0.30% SE Dependencies Government jobs Transfer payments SE Rising Business Stars Tourism, including ecotourism Recreational manufacturing Mining-related spin-offs Guiding and Outfitting Disaster recovery knowledge SE Notable Ohio Scenic Byway Coal reserves Shawnee National Forest, Garden of the Gods Southeastern Illinois College Tourism & heritage sites & events, eg: Slave House, Trail of Tears, Milestone Bluffs Festivals: Fresh Water Shrimp Festival, etc. Undeveloped tourism sites Dixon Springs Ag Center Unique climate & long growing season 40

41 Southeastern COI: Goals
SE 6.03 Economic Picture by Sub-Region Southeastern Region (23 Feb 2007) Baseline 2012 Same Trend 2012 Goal Change vs. Baseline Change vs Same Population (2004) 49,465 47,833 56,000 +13.2% +17.1% Employable Population (16-64) (2000) 31,115 30,373 36,400 +17.0% +19.8% Labor Participation (16-64) (2000) 63.4% 70.0% +10.4% Employed 2004 All Ages 21,903 19,256 25,500 +16.4% +32.4% Average Wage 2004 $27,494 $35,604 $40,206 +$12,782 +$4,672 Total Region Wages 2004 $602.2m $685.6m $1,027m +$424.8m +$341.4m Determination of specific measurable, wage & employment goals from change in regional wages vs trend NEW JOBS: 3, WAGE: $43, $163.0m NEW JOBS AT AVERAGE WAGE: 2, WAGE: $40,276 $100.6m IMPROVEMENT OF EXISTING JOBS: 4, WAGE: $5,000 $21.9m CLIMATE OF ECONOMIC OPPORTUNITY: $56.0m 41

42 Southeastern COI: Opportunities (1 of 2)
SE 6.03 Economic Picture by Sub-Region Opportunity What is the market opportunity? What unique assets are being leveraged? Lodging capabilities Expanded tourism stays, $175-$200/day Locating the facilities near unique areas Training facilities By linking resources and upgrading skills it will increase the visitor expenditures per day in the region The Outfitter experience, Ohio Scenic Byway, Festivals Teaching mine training A clear growing need to support the expanded employment need and also the near future retirement of miners SIC (potential link to Rend Lake) — abandoned mines in the area to create a real life training center Correctional Officer Training Center Train our own CO, Police, etc. rather than 12 weeks of time and funds spent in Springfield Existing knowledge base of correction and law enforcement in SI and facilities Increase marketing access Bringing Producer closer to Consumer for SI products Shrimp, PM building materials, wines Drug Rehab Center NO existing program of its kind in SI; Termination of price per day or course needs to be researched. Connect to Tourism (trails) as part of rehab; knowledge base; lodging Shawnee National Forest Service participation Shawnee National Forest as one of the most unique locations on North America Source: COI Milestone

43 Southeastern COI: Opportunities (2 of 2)
SE 6.03 Economic Picture by Sub-Region Opportunity What is the market opportunity? What unique assets are being leveraged? Lodging, Condos, Cabins Hundreds of visitors experiencing a variety of activities including hiking, biking, hunting, etc. Shawnee National Forest and Glen O. Jones Lake Food & Dining Improvement of the overall tourism and visitor experience and product in the region Existing facilities and programs that can be leveraged without large upfront costs Game Cuisine Unique culinary experience. Preparation of hunters game during their stay in the area. Deer-related products Large variety of game available in the region Market regional festivals together Master calendar and extended stays at $175-$200/day Leveraging visitors to meet local products bringing Producer closer to Consumer Team With Rend Lake Culinary Arts School Existing facilities and programs that can be leveraged without large upfront costs, Job Corps, RLC, SIC Garden of the Gods Expanded tourism stays, $175-$200/day One of a kind natural resource Source: COI Milestone

44 Southeastern Tourism Goals
SE Southeastern Tourism Goals 6.03 Economic Picture by Sub-Region Recognizing the extensive indigenous resources in Southeastern and under-tapped tourism industry potential, the COI set several goals: Increase expenditures by $10m/yr Increase lodging taxes by $85k/yr Increase daily spending by 19% ($60 to $76) Increase occupied room-nights in the region by 8,000 per year Focus on three areas (take 19 areas through the filter): Fee-hunting Historical tours Eco-tourism Source: Southeastern COI

45 6.03 Economic Picture by Sub-Region
Southeastern Highlights SE 6.03 Economic Picture by Sub-Region SE Opportunities Bring resources to SE through relationships and alliances Natural and small town environments are positive places to live, work and play Leverage the Dixon Springs Center, unique climate Grow reputation for entrepreneurship Grow tourism industry by leveraging unique location, heritage sites and natural features Unique small river towns Leverage coal mining knowledge base in new ways; disaster recovery, safety systems, training SE Key Trends Growth and prominence of Southeastern College Rebirth of coal industry Transportation of coal from Shawneetown terminal Regional recognition including videos highlighting the unique natural features Growth of the Ohio Scenic Byway Weak workforce availability SE Challenges Overall limited resources in the area Declining tax revenue base Change age demographic Limited broadband penetration Lack of lodging facilities (187 rooms) Limited affordable housing Industrial water availability in Hamilton County for mine expansion Entrepreneurship support structures Quality housing stock SE Climate for Growth Agriculture research and development Comfortable mild Midwest climate: senior living Tourism; unique natural environment & locations Vast amount of coal resources Variety of coal industry knowledge Processing of coal closer to raw material Mine to mouth energy production Growing need for coal workers & disaster training Entrepreneurship and innovations KBE workers in unique small towns Source: Connect SI COI, RA Interviews and VE

46 Economic Profile: Greater Wabash COI
GW 6.03 Economic Picture by Sub-Region Employment by Sector Overview: Labor Participation Rate – 71% GDP: $2.5 billion Top three GDP generators Natural Resources – 25% F.I.R.E. – 19% Government – 13% Lowest % in SI region GW Number of Jobs by Region Number % Average Wage Natural Resources 4,974 19% $41,213 Wholesale & Retail 3,789 14% $31,223 Manufacturing 2,702 10% $54,310 Government 2,452 9% $51,139 Health 2,377 $29,363 F.I.R.E. 1,949 7% $61,000 Tourism 1,334 5% $16,345 Construction 1,283 $48,246 Education 1,045 4% $28,285 Transport & Utilities 940 $54,220 KBEs 906 3% $57,349 Other 2,641 $28,484 Total 26,392 100% $41,009 Source: BEA Data and RIMS II multipliers — 46 — 46

47 Greater Wabash: Population Trends
GW 6.03 Economic Picture by Sub-Region 1980 2004 est. Change Edwards 7,993 6,785 (-15.1%) Wabash 13,776 12,601 (-8.5%) Wayne 18,157 16,814 (-7.4%) White 17,964 15,221 (-15.3%) Greater Wabash Region 57,890 51,421 (-11.2%) Comparison during same period: USA +31.1%, Illinois +11.2% GW has the greatest population loss in SI from 1980 to 2004 — more recent estimates show trend continuing Source: Bureau of Economic Analysis and Census Bureau

48 6.03 Economic Picture by Sub-Region Age Distribution Comparison
Older Age Distribution Puts SI at Economic Disadvantage versus Illinois GW 6.03 Economic Picture by Sub-Region Age Distribution Comparison Dramatic loss of yr olds in GW region GW has a greater percent of people over 55 than the rest of Illinois Median age higher in GW (40) than Illinois (34.7) To grow economically, the region needs to retain younger workers and grow job opportunities Source: U.S. Census Bureau – Table QT-P1: Age Groups and Sex: 2000

49 Out-Migration is Eroding GW’s Future
6.03 Economic Picture by Sub-Region Out-migration of Healthcare Revenues * $32.9m of $55.5m Out-of-Region Jobs & Disposable Income Spending * $14.7m-$23.6m per year * Worth Jobs Youth Brain Drain (Future Workforce) * 16.3% drop in 10 years * $19.1m in lost wages Economic Value Lost to GW: $56.7m-$75.6m EVERY YEAR! — 49 —

50 6.03 Economic Picture by Sub-Region
Economic Profile: Greater Wabash COI GW 6.03 Economic Picture by Sub-Region GW Traditional Business Strengths Agriculture Mining Manufacturing, eg: Airtex, Champion Labs Oil extraction Education system GW People, Land & Jobs % of IL Land Mass = 3.0% % of IL Population = 0.41% % of IL Employment = 0.35% GW Dependencies Transfer payments High coal industry retirees Pension income Manufacturing employment GW Rising Business Stars Tourism, especially hunting Energy Oil industry supplies and equipment Outfitting/Hunting, eg: Campbell’s Outfitters Entrepreneur businesses: Elastec, Dinger Bats GW Notable Wabash River Business connections with Indiana Interstate (I-64); proximity to Evansville, IN Nearby Toyota plant (Princeton IN) Postcard small towns College System: Illinois Eastern Community Colleges, Frontier, Wabash Valley Oil reserves Online education initiatives Major regional business owners live in the area Major source of water in the area Lower unemployment rate then the rest of SI Source: Connect SI COI, RA Interviews and VE — 50 — 50

51 Greater Wabash COI: Goals
GW 6.03 Economic Picture by Sub-Region Greater Wabash Region (23 Feb 2007) Baseline 2012 Same  Trend 2012 Goal Change vs. Baseline Change vs Same Population (2004) 51,421 49,561 53,000 +3.1% +6.9% Employable Population (16-64) (2000) 31,980 30,777 32,913 +2.9% Labor Participation (16-64) (2000) 71.1% 72.5% +1.97% Employed 2004 All Ages 26,400 25,445 27,746 +5.1% +9.0% Average Wage 2004 $26,311 $33,671 $36,517 +$10,206 +$2,846 Total Region Wages 2004 $694.6m $856.8m $1,013m +$318.9m +$156.4m Determination of specific measurable, wage & employment goals from change in regional wages vs trend NEW JOBS: 1, WAGE: $43, $60.1m NEW JOBS AT AVERAGE WAGE: WAGE: $36,517 $33.6m IMPROVEMENT OF EXISTING JOBS: 5, WAGE: $5,000 $26.4m CLIMATE OF ECONOMIC OPPORTUNITY: $36.4m 51

52 Greater Wabash COI: Opportunities
GW 6.03 Economic Picture by Sub-Region Energy Become an Alternative Energy Capital of the World Methane Gas, ethanol and bio-diesel, geo-thermal technologies, green coal concept KBE Recertification programs Connect with tourism to improve quality of the industry Continuing education; lawyers, accountants, realtors, etc. Local PC support group Tourism Four wheeler activities, racetracks, competitions, training track Hunting facilities and guide services, turkey and deer Lone Ranger Festival, Mt. Carmel Beall Woods, trails, improvement of facilities Underground coal mine park view the fault Underground four wheel tours and adventures Develop a spillway for the Wabash River; 4 ft.

53 6.03 Economic Picture by Sub-Region
Greater Wabash: Highlights GW 6.03 Economic Picture by Sub-Region GW Opportunities Leverage the community college system for high demand online areas such as nursing Attractive climate and environment for KBE workers Utilize the college system to attract young adults to slow the youth brain drain Unique small town atmosphere near Evansville Entrepreneurship and business incubation KBE opportunities from energy knowledge base Utilization and leveraging of the expanded broadband infrastructure; education, services, connections with external resources and customers GW Key Trends Significant youth brain drain Out migration of healthcare services to Indiana Employment opportunities in Indiana Substantial consumer spending in Indiana Expanded economic dependence on Champion Labs and Airtex Strong base of annual community events Large farmers purchasing additional land Limited availability of workforce Growth and improvements in Fairfield East of I-57 & South of Hwy 50 negative growth GW Challenges Youth brain drain Uncomfortable attitude towards change Bedroom community (for out-of-state employment) and spending) Consumer spending trend in Indiana Residential curb appeal – risk of lowering value Lack of a clear regional differentiation in SI GW Climate for Growth Unique small town atmosphere; bedroom community Low cost property values Export of educational programs Oil, gas and coal extraction knowledge Entrepreneurship strategy – business incubation linked with expertise and existing loan funds; GWRPC, SDC, City of Carmi, Wayne City, City of Fairfield KBE businesses and employment Source: Connect SI COI, RA Interviews and VE

54 Economic Profile: Greater Egypt COI
GE 6.03 Economic Picture by Sub-Region SI Number of Jobs by Region Employment by Sector Jobs % Average Wage Wholesale & Retail 19,176 14% $28,070 Government 17,306 13% $51,139 Health 15,028 11% $29,363 Manufacturing 12,916 10% $54,310 Education 11,690 9% $28,285 Tourism 11,493 $16,332 Natural Resources 8,635 6% $35,241 F.I.R.E. 7,881 $59,430 Transport & Utilities 5,615 4% $51,749 Construction 5,468 $48,426 KBEs 6,227 5% $57,658 Other 13,250 $29,947 Total 134,685 100% $38,703 Overview: Labor Participation Rate – 66% GDP: $11.1 billion Top three GDP generators Government – 20% F.I.R.E. – 18% Manufacturing – 11% Highest in SI region Source: BEA Data and RIMS II multipliers — 54 — 54

55 Greater Egypt: Population Trends Prison Population Adjusted
GE 6.03 Economic Picture by Sub-Region 1980 2004 est. Change 2004 est. Adjusted Change Adjusted Franklin 43,393 39,498 (-9.0%) Jackson (P) 61,846 58,186 (-5.9%) 56,031 (-9.4%) Jefferson (P) 36,837 40,323 9.5% 38,463 4.4% Perry 21,794 22,691 4.1% Randolph 35,686 33,242 (-6.8%) Williamson 56,846 63,124 11.0% GE Region 256,402 257,064 0.2% 253,049 (-1.3%) Comparison during same period: USA %, Illinois +11.2% Lowest % population loss in SI region from 1980 to 2004 Largest prison population in SI approx. 4,000 Population figures included SIU students = 21,000+ per year

56 Comparisons with IL Industry Mix: Higher than State Average in Services, Gov’t Jobs
6.03 Economic Picture by Sub-Region Greater Egypt employs more workers than Illinois average in retail trade, lodging accommodation, food services and government jobs GE is below average for KBE related jobs** such as finance, professional and technical even with a major University Percentage of Non-Farm Jobs by Sector IL (%) GE (%) Difference Wholesale Trade 5.1 1.6 -3.5 Retail Trade 12.0 16.6 4.6 Finance and Insurance** 7.0 4.9 -2.1 Professional and Technical** 7.8 2.5 -5.3 Administrative 7.6 -2.7 Accommodation & food services 7.2 9.8 2.7 Government (includes SIU staff) 14.1 27.5 13.3 % Non-farm employment 60.8 67.8 Combined = 1/2 of State average Source: Bureau of Economic Analysis

57 SIUC: an Economic Engine in SI
GE 6.03 Economic Picture by Sub-Region 21,598 enrolled in 2006 $13,520/yr per student spent locally Every 100 students generate 18 local jobs Direct economic impact = $284 million R&D Research Spending $150 million R&D parks in the SI region $70 million impact on local economy SIUC is one of the largest employers in Greater Egypt with 5,042 FTE jobs Total Economic Impact ≈ $653 million 5.8% of Greater Egypt’s GDP Source: SIUC Provost & web site

58 6.03 Economic Picture by Sub-Region
Economic Profile: Greater Egypt COI GE 6.03 Economic Picture by Sub-Region GE Traditional Business Strengths Wholesale & retail Healthcare Manufacturing Education Tourism Coal mining GE People, Land & Jobs % of IL Land Mass = 5.6% % of IL Population = 2.0% % of IL Employment = 1.9% GE Dependencies Public sector employment Transfer payments SIUC Large manufacturing companies and employment GE Rising Business Stars Tourism, including ecotourism and vineyards Minor league baseball; Southern Illinois Miners Alternative energy, including ethanol Health services Advanced manufacturing Artisans and arts Warehousing & distribution Marion Regional Airport Wineries Continental Tire Aisin Manufacturing Crownline Boats GE Notable Southern Illinois University Carbondale R&D knowledge base at SIU John A. Logan College Rend Lake College St. Louis residential impact on Randolph Co. Highway 13 – I-57 growth corridor World Shooting Complex Unique natural features; Lake of Egypt, Crab Orchard Lake, Rend Lake Winery growth Energy knowledge base Pockets of extreme poverty Source: Connect SI COI, RA Interviews and VE — 58 — 58

59 6.03 Economic Picture by Sub-Region
Greater Egypt: Goals GE 6.03 Economic Picture by Sub-Region Greater Egypt Region (23 Feb 2007) Baseline 2012 Same Trend 2012 Goal Change vs. Baseline Change vs Same Population (2004) 253,049 258,869 274,432 +8.45% +6.0% Employable Population (16-64) (2000) 164,134 167,909 179,238 +9.2% +6.8% Labor Participation (16-64) (2000) 66.0% 71.0% +7.6% Employed 2004 All Ages 134,685 140,340 157,787 +17.2% +12.4% Average Wage 2004 $27,830 $35,765 $40,765 +$12,935 +$5,000 Total Region Wages 2004 $3,748m $5,019m $6,432m +$2,684m +$1,413m Determination of specific measurable, wage & employment goals from change in regional wages vs trend NEW JOBS:* 10, WAGE: $43, $455.4m NEW JOBS AT AVERAGE WAGE:* 6, WAGE: $40,765 $284.5m IMPROVEMENT OF EXISTING JOBS:* 26, WAGE: $5,000 $134.7m CLIMATE OF ECONOMIC OPPORTUNITY: $538.4m * Jobs are the result of action plans related to industry cluster and workforce development strategies.

60 Greater Egypt COI: Opportunities
GE 6.03 Economic Picture by Sub-Region Opportunity Global/National Trend Indigenous Resource Leveraged Securing Foreign Trade Zone for the region Relationship of the Americas to the rest of the world Location – interstate highway system, rivers Gain more inter-modal facilities and ports Short sea shipping & river Barge Mississippi and Ohio Rivers Letting Central and Northern IL know that you can ship to many cities to the south from here. Traditional ports (east & west) are too busy Our location Expanding logistics, transportation & storage in the Region Increased emphasis on inland intermodal logistics Mid-America location IL 24, 57 & 64 Increasing Freight and Passenger Air Service New transportation systems Our area airports Diversifying the face of the region Diversity SIU international student body, Tech Center, Community Colleges Health Care being tasked with caring for Spanish speaking Increased influx of Hispanics Bilingual individuals Net Energy Exporter High petroleum prices Biomass Crops, Coal, Steam, Research Centers Source: COI Milestone

61 Greater Egypt COI: Opportunities
GE 6.03 Economic Picture by Sub-Region Opportunity Global/National Trend Indigenous Resource Leveraged Become a National Leader in Water Recycling Possible water shortages Water Maximize our ability to offer affordable fuel Upward trend of transportation fuel Biomass hydrogen Ethanol-Bio-diesel Need for energy Corn-soybeans-coal water availability? Rend Lake - Tourism Opportunities: Randolph County, Crab Orchard, Linking State Parks (Bike Trails/Repair shops), Road Maintenance, Google: SI Tourism One stop shopping at a central website/the opportunity to find prospects and pay at one site Tourism opportunities: natural resource, regional package,Little Hot Spots/World Shooting Complex/Pyramid State Park (needs promotion) Call Centers Those jobs going overseas People & products competitive wages Tourism Support Booking an entire trip online Extensive tourism destination assets Mentorship: Business owners teaching our young people how to start a successful business Aging of the population Experienced successful retirees Commercialization of Regional Private Research/KBEs Growth of business innovation SIU Incubation (Needs to Cross COI boundaries) Network Action Team that works independently Growth of global incubation seeking access Existing incubators & research parks Source: COI Milestone

62 6.03 Economic Picture by Sub-Region
Greater Egypt: Highlights GE 6.03 Economic Picture by Sub-Region GE Opportunities Highly educated population Technology transfer from SIUC and SIUE Quality of place and proximity to St. Louis Energy sector: coal, alternative fuels, etc. Foreign student population at SIUC Workforce development resources - Man-Tra-Con SIU & community colleges Price of residential and commercial real estate Transportation Education Center at SIUC 1,000’s of skilled dislocated manufacturing workers Young entrepreneurs and companies/creative class GE Key Trends Hwy 13 & I-57 corridor growth SIU Declining Enrollment Medical professional recruitment difficulties Growing population of young professionals Growth and investment in Randolph County Growth of Cedarhurst Center for the Arts in Mt. Vernon Growth of wine industry and winery destinations Turnaround of Continental Tire Growing artisan community including Southern Five Local leadership conducting Energy Symposiums Leadership understanding that GE can benefit from a regional SI economic initiative GE Challenges Culture of Poverty Comfort with being the dominate economy in SI Population decline even with a major University 2,000 recent dislocated workers Lack of quantity and commitment of leadership Weak region wide communication Limited access to public and private capital Cost of transportation for goods Anti-business climate Litigious environment Bureaucratic mind-set GE Climate for Growth Rebirth of coal industry Movement of high net-worth individuals from St. Louis to Randolph County SIU research and development departments Knowledge Based Enterprises working closely with SIU research departments Outdoor recreation activities Arts and culture linked with wineries Transportation and logistics hub; air, rail, interstate Senior living Source: Connect SI COI, RA Interviews and VE

63 Regional Economic Summary
6.03 Economic Picture by Sub-Region Greater Egypt (64% GDP and 61% of SI population) dominates the SI region — bodes well for GE, but weak neighbors impact the entire neighborhood SI possesses the economic critical mass ($17.6B GDP) and the population (419,992) to compete with many metro areas and especially globally SIU has a significant direct economic impact on the region ($284 million), but could have a much broader benefit The region has numerous major private sector employers that need to be engaged in Connect SI to support competitiveness; Continental Tire is a example The predominance and burden of government on the regions GDP (20%) needs to be reduced immediately to allow growth to occur including restructuring of tax base SI has a robust inventory of unique natural and knowledge assets that are not being leveraged The region possesses a vast variety of small town amenities and qualities that are in demand by KBE workers that can chose where to live 63

64 Chapter 6: Regional Perspective
Southern Illinois — "Garden of the Gods" This Section provides a condensed overview of the livable community assets, conditions and trends of each of the economic sub-regions of SI. Chapter 6: Regional Perspective 6.04 Livable Community: Assessment

65 Livable Community: Introduction
6.04 Livable Community: Assessment In a Knowledge Based Enterprise (KBE) economy livable community elements are valued equally with economic development Development of a Livable Community is the foundation from which successful and sustainable economic growth becomes possible Highly successful regional economies have realized the value of well planned livable community programs in attracting new businesses and workers Highly skilled, mobile and well compensated KBE professionals can chose where to live and work 65

66 Resources Required for a Livable Community (1 of 2)
6.04 Livable Community: Assessment Healthcare — Meet the health and social needs (including physical, mental, spiritual and emotional) of the community citizens Arts/Culture/Heritage — Support for enhanced arts, culture and heritage, assure they will stimulate and support the transition to sustainability in your community Recreation & Leisure Activities — Provide recreation and leisure activities for both residents and visitors. Deliver or exceed expectations while protecting the environment Economic Opportunities — Focus efforts on how your community will create a strong and sustainable local economy, innovative and resilient businesses supported by a strong skilled workforce Energy Resources — Access to low cost, reliable, sustainable energy while managing greenhouse gas emissions and air quality Water Resources — A dependable supply of high quality water in a way that maintains healthy aquatic environments and uses water efficiently Localized Food Systems — Ensure a healthy, nutritious and sustainable food supply that maximizes opportunities to build the social, ecological, cultural and economic capital of the community, “Grow and buy local” campaigns help any community Source: VE Alliance Research

67 6.04 Livable Community: Assessment
Resources Required for a Livable Community (2 of 2) 6.04 Livable Community: Assessment Natural Environment — Seek ecosystem integrity and biodiversity will be protected and where possible restored in your community/region Built Environment — Develop and renovate buildings, neighborhoods and facilities that will contribute to making your community unique, livable and sustainable Transportation — Move residents, employees, visitors, and materials to, from and within the community in a more effective & sustainable manner Life-Long Learning — Provide residents of all ages formal and informal lifelong learning opportunities both online and at physical locations Healthy Community — Community culture that places superior value in health and promotes activities that support healthy living Affordability & Housing — Make living and playing in your community affordable for residents, and also meets housing needs of diverse permanent residents Source: VE Alliance Research

68 Key Findings of 2004 Illinois Poverty Report
6.04 Livable Community: Assessment Poverty and its impacts are pervasive in Southern Illinois The rural disadvantaged are typically older, less healthy and less active in the work force Gaps in transportation, economic, health, housing infrastructure, and loss of population plague high poverty areas Lack of education attainment in rural areas impedes improvements Earnings of workers in rural areas substantially lag urban areas Source: Key findings of the 2004 Report on Illinois Poverty “An Analysis of Rural Poverty,” Heartland Alliance — 68 — 68

69 6.04 Livable Community: Assessment
Pervasive Poverty 6.04 Livable Community: Assessment U.S. Average 12.7% Illinois Average 10.7% Only one SI county (Randolph) has a lower % of poverty than Illinois Source: 2000 US Census

70 6.04 Livable Community: Assessment
Pervasive Poverty Impacts the Sense of a Bright Future for the Children in SI 6.04 Livable Community: Assessment Children U.S. Average 17% Adults 65+ U.S. Average 9.6% Children in poverty — twice the rate (22%) than that of Adults 65+ in SI (11%) Source: 2000 US Census

71 High Poverty Rates Impact Many Quality of Life Elements in SI
6.04 Livable Community: Assessment Highest % in rural region Highest poverty rate Highest unemployment rate since 09/03 Lowest % college graduates Highest % enrolled in Medicaid Highest % age 5+ with a disability #1 Highest % of population over age 65 Highest % age 65+ in poverty Highest % age 65+ with a disability Lowest % of population 0-10 Highest % age 0-17 in poverty Highest % households owner burdened #4 Highest % households lack complete plumbing Highest % households lacking complete kitchen Highest % commuting to work from other IL counties Lowest % population work and live in same county Highest % households rent burdened Highest % of Adults with no High School Diploma #3 Source: IL Poverty Summit, “2004 Report on Illinois Poverty,” Based on U.S Census or IL Dept of Employment Security data & Atlas of Illinois Poverty Spring 2003

72 6.04 Livable Community: Assessment
Low Educational Achievement Impacts Other Economic and Community Factors; Healthcare, Social Services, & Poverty 6.04 Livable Community: Assessment Illinois Average 11.1% Only two SI Counties (Jackson & Wabash) have a better than State of Illinois average of citizens without a high school diploma Source: 2000 US Census

73 Youth at Risk & Youth Perceptions
6.04 Livable Community: Assessment Southern Illinois has mixed youth risk factors: SI counties have higher child abuse/neglect rates and higher divorce rates than Illinois average Lower high school drop out rates and higher standard test scores than rest of Illinois Other risk factors are comparable to State averages Source: IL Criminal Justice Information Authority Local High School Students: “We want to stay in region, but see no good job opportunities” “Fear of being stuck here” — the female students defined: “getting stuck means getting pregnant” Source: RA and EF Hutton Interviews conducted by VE Team — 73 — 73

74 Youth: the Key to SI’s future
6.04 Livable Community: Assessment Young people are being told that working with your hands is a dead end — as a result there are very few skilled trades people available Schools are outdated in their physical infrastructure and curriculum The SI entrepreneur group recognized and agreed that a top priority in the region was to implement a youth entrepreneur program From SI’s youth themselves: Why should we kids care, when adults don’t enforce the rules to keep our community safe, attractive and vibrant Most of us are leaving — no apparent job or career opportunities — most needed to work while in school and coveted a job at McDonalds! We want to stay but can’t; this realization saddens us because the area is beautiful and would be a very nice area to live in This area is viewed as “dead!” Source: RA and EF Hutton Interviews conducted by VE Team

75 Affordable Housing With a Hidden Story
6.04 Livable Community: Assessment SI Advantages Home ownership in Southern Illinois is higher than in Illinois Overall, housing costs are low SI Challenges Much of housing stock is aging and small Financing can be difficult since cost of construction is higher than final appraised value Southern Illinois vs. Illinois: More people own homes, fewer rent Despite low housing costs, over 21% of households pay more than 30% of income for housing Source: HUD Comprehensive Housing Affordability Strategy (CHAS) Data 2000 — 75 — 75

76 Bankruptcy Rates Illinois Southern Illinois Low business bankruptcies
6.04 Livable Community: Assessment Illinois Low business bankruptcies High personal bankruptcies IL and the surrounding Midwest states among the worst in U.S. for personal bankruptcy Southern Illinois Lowest business bankruptcies in Illinois If the region was a state, it would rank # 2 in the U.S. Highest personal bankruptcies in the state If the region was a state, it would rank # 45 in the U.S. State Bankruptcy Rates, June Business Non-Business Per Business State Rank Per Person Sate Rank Illinois 0.29% 14 0.59% 36 Indiana 0.46% 35 0.95% 50 Kentucky 0.38% 23 0.71% 44 Missouri 0.25% 9 0.66% 42 Note: Rank of 1 is lowest rate, rank of 50 is highest rate IL Bankruptcies by District, June Business Non-Business Northern 0.29% 0.56% Central 0.34% 0.67% Southern 0.16% 0.73% Note: Southern District covers the 38 southernmost counties in IL Source: U.S. Bankruptcy Courts 76

77 6.04 Livable Community: Assessment
Lower Crime Rates 6.04 Livable Community: Assessment SI has 14% lower rate than Illinois for total crime index offenses 19% lower rate for general thefts – the most frequent Motor vehicle thefts, robberies, murders also lower in SI than Illinois SI has higher rate of burglaries and assaults, and sexual assaults 2005 Crime: Number of Offenses Per 100,000 Source: Illinois State Police Meth labs in Southern Illinois remain a crisis — labs operate across the region and users are more common in rural than urban areas Source: Shane Koch et al, “Southern Illinois Methamphetamine…,” 2007. 77

78 SI Environment Highlights
6.04 Livable Community: Assessment Southern Illinois maintains a generally healthy eco-environment Water quality and quantity is high (state management is higher than neighboring states) Open pit mine areas need remediation Numerous vacant abandoned industrial & manufacturing sites now are brownfields requiring clean-up Mild climate year round Long growing season Useable waterways and many spring fed lakes Natural forests aplenty Ancient history untapped archeology throughout SI Source: EPA; VE Research & Analysis 78

79 SI’s Rich Cultural Assets: Just a Short List
6.04 Livable Community: Assessment A Range of Museums Offerings Cobden Museum (Cobden) Custom House Museum (Cairo) Elijah P. Curtis Home/ Museum (Metropolis) General John A. Logan Museum (Murphysboro) Edwards County Historical Society Museum (Albion) L. Haas Store Museum,  Matsel Cabin Museum, Sen. Robinson Stewart House (Carmi) Ratcliff Inn Museum (Carmi) Superman Museum (Metropolis) Flourspar Museum Johnson County Courthouse Jefferson County Historical Village (Mt. Vernon) An Astounding Variety of Annual Festivals & Events Big Muddy Film Festival Shrimp Festival Superman Festival The Archery Shooters Association Pro-Am Little Wabash River Festival Corn Days in Carmi Wabash Ribberfest BBQ Fort Massac Encampment River to River Relay Southernmost Illinois Birding Fest Multiple wine and food festivals Unique Art Galleries Around the Region Cedarhurst Center for the Arts (Mt. Vernon) Southern Illinois Art & Artisans Center (Whittington) Southern Illinois Art Gallery Associated Artists’ Gallery (Carbondale) Renaissance House: A Working Art Gallery (Eldorado) Shawnee Hill Barn Antiques Fox’s Flea Market Antiques Entertainment Abounds! Harrah’s Casino (Metropolis) SIU Salukis college sports teams (Carbondale) Sesser Historic Opera House (Sesser) Marion Cultural & Civic Center Southern Illinois Symphony Orchestra (SIU) World Shooting and Recreational Complex (Sparta) Kornbread Junction Southern Illinois Miners Winery Entertainment The Art Trail of Southern Illinois 20 Distinctively Unique Galleries within a 70 mile radius 79

80 A Community Development Resource SI can be Proud of
6.04 Livable Community: Assessment Led by Man-Tra-Con, Corporation, Access SI is an online community resource directory designed to support the SI region plus ten additional Southern Illinois counties with a community resource directory Community citizens have online access to a variety of resources including health, social services, education, governmental, cultural, recreation, civic, and workforce employment training and transition Unique Features: Over 80 service categories are available and searchable on the Internet site Semi-wiki format: The site allows or individual and organizational updates with content filtering by Man-Tra-Con Allows for volunteers to contact agencies and organizations for support Qualities to emulate: Open access wiki-format that creates efficiency and constant quality improvement Achieves the one-spot access for individuals from anywhere in SI Creates a collaboration of related services that brings benefit to the citizens of the SI region

81 6.04 Livable Community: Assessment
Livable Community Assessment: (1 of 2) 6.04 Livable Community: Assessment Criteria Rating Assessment Rationale Healthcare and Social Services SI has a solid healthcare infrastructure and services in the GE area, but have limited extension into the rest of the region Arts, Culture and Heritage The region has a robust heritage and history that has not been leveraged. The arts are not well recognized currently, but growing in Recreation & Leisure activities SI has a strong variety of outdoor recreation venues; indoor leisure activity improvements needed to attract KBE workers Economic Opportunities SI has limited economic opportunities, but with a commitment to the Connect SI framework a transformation could occur Energy Resources Access to energy is good with localized electrical generation; cost of electricity has a negative impact on industrial business competitiveness Water Resources Quantity and quality of water is good for commercial and residential users. Multiple lakes is a recreational asset = Weak to None = Improving = Average = Good = Strong

82 6.04 Livable Community: Assessment
Livable Community: Assessment (2 of 2) 6.04 Livable Community: Assessment Criteria Rating Assessment Rationale Natural Environment The SI regional environment is unique and varied with natural amenities in close proximity to cities and towns Governance SI governmental structures are in a complicated situation; there is a much larger than average number of entities, most with limited resources and expertise — dramatic restructuring will be difficult to accomplish Transportation The region has complete package of above average transportation access and infrastructure, including interstate highways, railways, airports and waterways; however, outside of the GE area, public transportation is limited Education and Learning SI has a strong collection of educational assets that can be utilized to transform the regions workforce to meet global needs Housing The housing stock overall is aged; current economic climate hinders the development of new housing stock due to cost of construction versus market value; and lack of building standards results in reduced predictability Localized Food Systems The region has tremendous potential to build local food systems with vast agriculture knowledge, research facilities, optimum climate — strategies need to be employed to expand farmers markets and farm to table initiatives 82

83 Livable Community: Summary
6.04 Livable Community: Assessment SI sits in one of the most desirable and livable natural environments in the mid-west, though lags in meeting 21st Century livable community amenities, infrastructure and expectations Most communities do not have building or zoning standards Many communities do not have 911 emergency communications systems and in have recently voted them down Access to basic healthcare services in many cities and towns outside of the GE region are limited SI has a low curb appeal that hinders its ability to attract KBE businesses and workers SI has developed a vast amount of community and social service agency knowledge base that can be leveraged for greater benefit for the region

84 Chapter 6: Regional Perspective
Southern Illinois — "Garden of the Gods" Infrastructure is a key element of community development, which includes both above and below ground components. Infrastructure assets support safe and livable communities. Chapter 6: Regional Perspective 6.05 Infrastructure: Assessment

85 U.S. Infrastructure Is Failing
6.05 Infrastructure: Assessment 2005 Report Card for America’s Infrastructure Aviation D+ Bridges C Drinking Water D- Energy D Navigable Waterways Public Parks & Recreation C- Roads Solid Waste C+ Transit Wastewater American Society of Civil Engineers (ASCE) created an Infrastructure Report Card U.S. infrastructure is failing The ASCE gives a “D-” grade to America’s infrastructure Total U.S. infrastructure needs $1.6 trillion over 5 years Source: Report Card For America’s Infrastructure 2005, American Society of Civil Engineers and Infrastructure 2007: A Global Perspective, Ernst & Young

86 Illinois ASCE Report Card
6.05 Infrastructure: Assessment 39% of major roads are in poor or mediocre condition Motorists spend $2.2 billion a year in extra vehicle repairs; roughly $271 per motorist 17% of bridges are structurally deficient or functionally obsolete 31 state-determined deficient dams 176 high-hazard dams Dam rehab costs estimated at $171.3 million Drinking water infrastructure needs $6.15 billion over next 20 years $11.89 billion in wastewater infrastructure needs Top three infrastructure concerns in Illinois: — roads, bridges, wastewater — Source: Report Card For America’s Infrastructure 2005, American Society of Civil Engineers and Infrastructure 2007: A Global Perspective, Ernst & Young 86

87 Applying the Report Card to SI
6.05 Infrastructure: Assessment If SI’s infrastructure is proportional to Illinois ASCE Report Card: Roads: Poor conditions cost $40.7 million per year in lost time, additional fuel consumption, and vehicle repairs Bridges: Approximately 20% of bridges are deficient Water Systems: SI drinking water infrastructure requires $130 million over five years Wastewater: $260 million repairs in wastewater infrastructure are needed Assumptions: 75% of area residents are motorists. Infrastructure requirements allocated as proportion of total population Given the relatively small population in SI and limited political clout historically in Springfield and Washington, SI’s infrastructure may be in greater disrepair Source: Report Card For America’s Infrastructure 2005, InterVISTAS Development Economics 2007

88 SI Infrastructure: Summary
6.05 Infrastructure: Assessment Nine primary water producing Water Districts serve SI SI water supply is in good shape with excess capacity in most systems Most sewer systems were built during the “coal age”; well built then, but many don’t meet current design criteria — 30-40 year old systems need repair USDA & IL-EPA have funded rebuilding a number of systems serving person communities Most systems can absorb additional population of 20-30% and small business growth of persons per location — out-migration left excess capacity Any major industrial expansion will require additional capacity and existing sewer system upgrades Road systems are maintained by either township road districts, county, state or federal governments — annual maintenance of township roads take a backseat to capital improvements USDA has invested heavily in repaving & upgrading road systems in SI — while many roads have been improved, a lot more needs to be done Energy supply is reliable with a choice of providers throughout SI Source: USDA Rural Development Regional Water Systems & Community and Business Program Analysis, GE, SE, S5 & GW CEDS

89 Chapter 6: Regional Perspective
Southern Illinois — "Garden of the Gods" Chapter 6.06 provides a review and assessment of the health of SI citizens, access and conditions within the healthcare industry, and the work of the Connect SI Healthcare COI. This Section recognizes the enormous amount of investment and effort already done by the healthcare industry in addressing major fundamental challenges. Chapter 6: Regional Perspective 6.06 Healthcare: Assessment — 89 —

90 Healthcare Assessment: Intro
Good physical and emotional health of the region’s workforce is required to build and sustain a vibrant economy Healthcare is often viewed as a social service, however, it is an important industry that often supports the economic well being of a region through high paying, high skill level jobs Access to high quality healthcare services is a predominate decision factor for KBE companies and also for workers when deciding were to live. Healthcare will continue to be a growth industry as the healthcare needs of 77 million aging boomers increases Many rural regions are challenged more than urban centers with rising age of residents, diminished resources for care, and declining infrastructure. Rural regions with high levels of poverty result in elevated demand for mental health providers and services The CSI Healthcare COI has focused on five measurable improvement targets; Improved health outcomes Provider profitability Regional skills shortage Connectivity

91 SI Healthcare is Big Business
6.06 Healthcare: Assessment Healthcare Jobs % of Healthcare Jobs of Sub-regional Economy Total Wages % of Healthcare Wages of Sub-regional Economy % of Total SI Healthcare Economy GDP Southern Illinois 22,210 11% $652M 8% 100% GE 15,028 $441M 67.6% SE 2,264 10% $66.4M 10.2% S5 2,541 $74.6M 11.4% GW 2,377 9% $69.0M 6% 10.7% National employment in healthcare and social services averages 10.9% In SI, $93,000 of healthcare spending creates one local healthcare job Healthcare industry is the third highest employer in the SI region SI Healthcare has a 1.5 economic multiplier on wages 49% of healthcare employment is Registered Nurses, Licensed Practical Nurses and Nursing Aides and Attendants Over 50% of these jobs have a higher wage than the SI average wage Source: Connect SI Health Scenario

92 6.06 Healthcare: Assessment
Healthcare Is Very Complex: SI Is Missing Many Industry Components 6.06 Healthcare: Assessment Payers Fiscal Intermediaries Providers (SI Focus) Purchasers Producers Government Employers Individuals Employer Coalitions Public Health Districts Insurers HMOs Pharmacy Benefit Managers Medicaid Medicare NGOs Hospitals Physicians Pharmacies IDNs** Alternate Site Facilities Community Health Sites Wholesalers Mail Order Distributors Group Purchasing Organizations Drug Mfrs Device Mfrs Medical Surgical Manufacturers Health Information System Firms In order for SI to achieve the goals set by the Healthcare COI, many more organizations along the Healthcare Value Chain need to be brought to the table Source: Wharton School Study of Healthcare Value Chain - Commissioned by The Center for Healthcare Management Research * IDN= Integrated Delivery Networks

93 6.06 Healthcare: Assessment
Out-migration of Healthcare Services Are an Economic Opportunity for SI 6.06 Healthcare: Assessment SI Regional Healthcare Services Leakage Regional Hospitals Admissions Patient Days Charges GE 16.5% 23.2% 26.2% SE 23.3% 31.9% 42.8% S5 49.0% 58.9% 62.7% GW 45.2% 50.8% 62.1% Total SI Leakage 25.5% 33.1% 37.2% Causes of Out-Migration Misconceptions re type and quality of healthcare services offered in SI Lack of certain healthcare specialists in SE, S5 and GW. Population chooses Indiana over GE healthcare facilities Follow-ups are also done outside SI — a “ripple effect” A perception that bigger hospital provides better service Referrals by SI physicians to hospitals outside the area to protect their business clientele Successful marketing strategies by hospitals outside SI The total value of healthcare charges being paid outside of SI region =$1.06 billion Missouri Hospitals – 19.8% Indiana Hospitals – 8.1% Kentucky Hospitals – 7.4% St. Johns Hospitals – 1.4% Memorial Springfield - .6% Source: Connect SI Health Scenario, CSI Healthcare COI

94 SI Has Higher Incidents of Serious Illness Than Illinois
6.06 Healthcare: Assessment Increased Deaths per 100,000 Population in SI vs. State of Illinois Incidence of many serious illnesses resulting in death are much higher in Southern Illinois than in Illinois Lifestyle & preventative improvements are required to address public health SI IL Higher Rate of Deaths Coronary Heart Disease 215 161 +34% Cerebrovascular Disease (Cancer) 66 51 +29% Lung Cancer 84 53 +58% Colorectal Cancer 29 20 +45% Source: IPLAN Local Hospital Executives: “We have people with worse health and less access to care” Source: RA and EF Hutton Interviews conducted by VE Team — 94 — — 94 — 94

95 6.06 Healthcare: Assessment
Heart Disease in SI 6.06 Healthcare: Assessment Primary Cause of Death — 15 of 20 SI Counties Above State Average Greater Wabash Southern Five Southeastern Greater Egypt Source: IPLAN

96 Coronary Heart Disease in SI
6.06 Healthcare: Assessment Primary Cause of Death — 9 of 20 SI Counties Above State Average Greater Wabash Southern Five Southeastern Greater Egypt Source: IPLAN

97 Malignant Neoplasms in SI
6.06 Healthcare: Assessment Primary Cause of Death — 5 of 20 SI Counties Above State Average Greater Wabash Southern Five Southeastern Greater Egypt Source: IPLAN

98 Cerebrovascular Disease in SI
6.06 Healthcare: Assessment Primary Cause of Death — 9 of 12* SI Counties Above State Average Greater Wabash Southern Five Southeastern Greater Egypt Source: IPLAN; *Note: 8 counties showed “not reported”

99 6.06 Healthcare: Assessment
Lung Cancer in SI 6.06 Healthcare: Assessment Primary Cause of Death — 7 of 16* SI Counties Above State Average Greater Wabash Southern Five Southeastern Greater Egypt Source: IPLAN; *Note: 4 counties showed “not reported”

100 Poverty Places Pressure on the Healthcare System
6.06 Healthcare: Assessment “People in poverty are less able to access preventative care, have limited opportunity to engage in health promotion activities, and are less likely to be offered health insurance through their jobs. These issues, compounded by rising healthcare costs, leave low-income SI residents struggling to meet their health needs.” ** Individuals Below Poverty Percentage # in SI Southern Illinois 16.4% 71,584 Greater Egypt 15.2% 45,117 Southeastern 16.9% 7,938 Southern Five 18.4% 10,838 Greater Wabash 16.2% 7,691 United States (overall) 12.7% Illinois 10.7% Implication: High poverty = High Medicaid Services **Source: “2004 Report on Illinois Poverty,” IL Dept of Employment Security data & Atlas of Illinois Poverty Spring 2003

101 SI Has a Higher Amount of Medicare and Medicaid Payments for DRG’s
6.06 Healthcare: Assessment Payor Breakdown Percent Connect SI Hospitals Missouri Hospitals Indiana Hospitals Kentucky Hospitals St. Johns Hospital Memorial Springfield THIRD PARTY PAYOR 17.2% 2.7% 28.1% 14.9% 10.1% 18.2% MEDICAID 13.7% 11.4% 7.2% 4.1% 9.5% 19.6% MEDICARE 60.2% 44.6% 56.9% 50.3% 62.6% 34.1% OTHER 6.1% 38.3% 2.8% 27.6% 16.5% 13.8% SELF PAY 2.9% 3.0% 5.0% 3.1% 1.2% 14.3% TOTAL 100.0% Connect SI hospitals have a 23% higher rate of Medicare and Medicaid patients than neighboring hospitals Average Per Day Charges Connect SI Hospitals Missouri Hospitals Indiana Hospitals Kentucky Hospitals St. Johns Hospital Memorial Springfield THIRD PARTY PAYOR $4,514 $8,937 $4,507 $4,761 $6,973 $5,628 MEDICAID $3,122 $2,424 $2,741 $2,940 $4,903 $2,863 MEDICARE $3,454 $4,326 $4,328 $4,275 $7,864 $6,561 OTHER $3,721 $4,566 $2,257 $5,233 $7,366 $6,794 SELF PAY $3,458 $4,801 $5,723 $3,179 $4,922 $5,805 TOTAL $3,562 $4,112 $4,143 $4,436 $7,222 $5,059 Medicare and Medicaid payments in SI are 25% less than commercial private payor Medicare and Medicaid payments in SI are 25% less than neighboring hospitals Connect SI hospitals only receive 71% reimbursement levels of what other neighboring hospitals receive for medical services Note: slide data has been averaged and may not be precisely accurate; DRG – Diagnosis Related Group Source: Connect SI Healthcare COI

102 Changing the Private Insurance Proportion in Payer Mix
6.06 Healthcare: Assessment 2004 HOSPITAL VISITS % of VISITS GOAL Third Party Payer 10,674 16.2% + 5% to 21.2% Medicaid 11,856 18.0% - 5% to 13.0% Medicare 32,639 49.6% Other 8,232 12.5% Self Pay 2,409 3.7% TOTALS 65,810 100.0% Proposed 5% Swap: Increase commercial clients +5%, Reduce Medicaid clients -5%, 72% of SI healthcare payments are Medicare and Medicaid in SI Medicare and Medicaid reimburse medical providers 7% less than third party payers Co-pay insurance has increased 11-to-14% in the last five years in Illinois Nationally, 24.4% of medical services are not paid for by the patient Achievement of CSI economic growth goals will expand 3rd party revenues, increase access to healthcare, and reduce the n umber of patients/families using Medicare, and dramatically reduce the percent of uncompensated & under-compensated medical services Source: CompData, Connect SI Healthcare COI, Illinois Medical Insurance Underwriters, 2005

103 6.06 Healthcare: Assessment
Mental Health Issues and Challenges Are Greater in a Region With High Poverty 6.06 Healthcare: Assessment Child & adolescent psychiatric services are generally limited in SI Lack of transportation has been determined as the #1 issue facing patient access, resulting in missed appointments Services for the underserved and low income are lacking and typically individuals are placed on waiting lists — while waiting many decided not to engage services SI has a strong perceived stigma of seeking mental health services that creates a barrier to entry ‘Depth-of-enterprise’ limits the ability for patients continued counseling in SI “Getting children out of poverty can improve their mental health, but does not fix everything — improvements were seen in behavioral problems, but depression and anxiety remained largely unchanged” - Journal of the American Medical Association; Duke University 7-yr Study Rural North Carolina, 2006 Source: RA Interviews, Rural Health Association, Illinois Delta Network Summary

104 6.06 Healthcare: Assessment
Complications Within the Healthcare Industry Impact Cost, Profitability and Quality of Care 6.06 Healthcare: Assessment Bad debt and uninsured patients – bills for service that cannot be collected High level of publicly insured patients: Medicare and Medicaid Level of publicly-insured patients likely to rise due to ‘Illinois Covered’ Rising costs from the delayed and declining reimbursements Limited physician control and professional assessments when referring Account receivables over 90 days are approximately 25% of billings causing excessive burden on operational cash flows Abuse and fraud within the entire system for Medicaid and Medicare Diminishing physician access for Medicaid patients is compounded by limited transportation to other counties or states Lack of skilled workforce especially in nurses with college degrees Source: Blue Cross-Blue Shield of Illinois 2004 Study

105 Projected Health Skills Shortages Will Challenge Connect SI Goals
6.06 Healthcare: Assessment The U.S. is facing a health skills shortage and so is SI The Connect SI Healthcare Community of Interest (COI) identified projected needs in many job types The table below reflects projected job needs in the region – a 47% increase in key health personnel Potential opportunity Potential Opportunity Projected Health Skills Needs of Select Occupations for SI Areas of Critical Skill Shortages 2004 Employee Levels 8-Year Change Based on COI 2012 Goal % Change Registered Nurses 3,249 1,776 5,025 55% Nursing Aides, Orderlies … 2,210 672 2,882 30% Licensed Practical Nurses 794 272 1,066 34% Medical Assistants 336 240 576 71% Pharmacists 274 192 466 70% Total Jobs 9,976 4,676 14,676 47% — 105 — — 105 — 105

106 Potential Critical Skills Goal Impact: New Health Positions
6.06 Healthcare: Assessment Total Potential Impact of Critical Skills Goals Jobs Earnings GDP Output Direct SI impacts 4,676 $214,688,000 $260,284,000 $469,836,000 Indirect and induced 2,408 $75,371,000 $156,289,700 $253,371,000 TOTAL 7,084 $282,265,000 $424,506,000 $688,194,000 Indirect Employment: Employment in down-stream industries that result from the presence of a particular business, activity or industry. Indirect employment is generally generated in industries that supply or provide services the direct business, activity or industry. Induced Employment: Employment generated because of expenditures made by individuals employed directly or indirectly by the particular business, activity or industry. SI Healthcare industry has the potential to supply 30% of the Connect SI job goals, but will require tapping existing under-employed and leveraging the regions vast workforce training and education resources Source: Calculated using BEA RIMS II multipliers

107 Local Physicians’ Priorities
6.06 Healthcare: Assessment Expand broadband connectivity for providers & health facilities Connections needed in short-term between hospitals, outpatient surgical centers, ambulatory care centers and clinics Connections needed for practitioners at home and at office in near-term Route 13 physician practices meet with NP COI to advance connectivity across all health centers Network Provider meetings in COI regions need to include healthcare providers who can identify connectivity gaps & solutions linked to COI broadband rollout Implement regional secure exchange of healthcare information Critical and urgent care sites, radiology groups, FQHC’s, labs, hospitals, nursing homes, pharmacies, rehab centers, health departments, free clinics, physicians in the office, at home and on the go throughout SI Critical need to simplify and improve healthcare system inter-operability for physicians whose patients are served by multiple independent healthcare sites Improve patient outcomes, safety and convenience, reduce liability and malpractice premiums, increase reimbursement, help physicians be more efficient Source: RA interviews and Healthcare COI

108 Healthcare Practitioners’ Suggestions for Change
6.06 Healthcare: Assessment Get doctors to think as a group & establish an identity — we are Southern Illinois, not a suburb of any other region Share our expertise within the region Market within our region and to each other (cross referrals), changing referral patterns Make paperwork easier, more common sense & logical — create a solution that is beyond “individual hospital” mentality Change competition perception to collaboration model. Receiving hospital compliments the referring physician. This relationship builds confidence in patient opinion and within the healthcare system. Compliment rather than tear down Ensure immediate and accurate access to health information Enable new physicians in setting up their practices — e.g., a business incubator or “welcome wagon”. An outside entity is necessary to work within the Stark laws Source: RA interviews and Healthcare COI

109 Impact of Addressing Physician Priorities
6.06 Healthcare: Assessment Improving access to medical records Spending more time with the patient by reducing paperwork Providing real-time, continuous loop of patient health information Integrating best practice for the patient, including preventative health for the general population Helping practitioner to do his/her job by providing them information about the cases so better care decisions can be made Reducing medical errors Reducing missed preventative opportunities Reducing unnecessary costs, thereby expediting diagnosis and treatment Working within pay-for-performance initiative Source: Healthcare COI

110 Healthcare COI Believes Connectivity Enables Reaching Goals
6.06 Healthcare: Assessment 50 individuals representing 30 different healthcare organizations within the Connect SI region reviewed 14 different connectivity applications Five priority eHealth applications were identified: Electronic master patient index Linking hospitals and physicians with electronic health records Mental health primary consulting Workforce education and training Tracking system for drug seekers Connectivity positively impacts health outcomes and industry profitability

111 Healthy Living Strategies: the Key Goal
6.06 Healthcare: Assessment A shift in thinking is required because medical services alone cannot make people healthy Healthy living behaviors are the key to healthy lives, and a healthy economy Healthy People 2010 has identified two key goals Increase the quality and years of healthy life Eliminate health discrepancies Healthier U.S. identified four pillars Be physically active Eat a nutritious diet Get preventive screenings Make healthy choices Medical services alone do not create a healthy community — SI citizens have the personal responsibility for healthy living habits and, therefore, improved health outcomes Source: Health People 2010

112 6.06 Healthcare: Assessment
VE Assessment: Healthcare 6.06 Healthcare: Assessment Criteria Rating Assessment Rationale Retention of medical service revenues SI has a very high out migration of services to neighboring states, over $1 billion, 37.2% — focus of the Healthcare COI Profitability Healthcare service provider profitability is under extreme pressure with 72% of patients covered by Medicare and Medicaid Skilled Workforce Availability The SI healthcare industry is currently challenged with workforce availability and it will become greater in the future Specialist Availability SI has limited specialty healthcare services outside of the GE region which drives out-migration Access to Patient History Physicians and medical service providers cannot access patient records easily Mental Health Services SI has a shortage of mental health services and professionals Healthcare Education & Training SI has an immediate need for increased healthcare training Cost of healthcare services The cost-to-value ratio must be competitive with neighbors Improved health incentives Providers, insurers, employers and regulators need to collaborate to expand preventive programs 112

113 Healthcare COI Outcomes: 2012 Goals
6.06 Healthcare: Assessment The Healthcare Outcomes group identified one key, overarching measure to identify better outcomes through healthy living: Reduce cardiovascular disease mortality from 215 to 166 deaths per 100,000 population by 2012, a 23% reduction — based on the Healthy People 2010 goal — The group identified four strategies to reach this goal and increase healthier living in Southern Illinois; these are: Increase physical activity levels (exercise) Improve eating habits Decrease tobacco use Increase diabetes management Source: Connect SI Healthcare COI

114 6.06 Healthcare: Assessment
Potential Impacts of Connect SI Job Goals: Improved Healthcare Revenue Mix 6.06 Healthcare: Assessment Current State 2004 >$2 Billion New Annual Wages 41,461 Existing Jobs >$5,000/Yr 27,298 New Hi-Wage Jobs $642 Million New KBE Activity 1,600+ Firms +4500 Families with Healthcare Coverage Lift 10,000 Citizens Out Of Poverty $200 Million Information Technology Investment Desired Future State 2012 Insured population 10% Medicaid % Medicare % Uninsured % Insured Medicaid Medicare Uninsured A Far Better Payor-Mix than Today Note: 60% of the US population had employment-based insurance in 2004 Source: Estimates based on IPLAN, and Census Bureau data

115 6.06 Healthcare: Assessment
Healthcare Summary 6.06 Healthcare: Assessment The SI healthcare industry is big business with even bigger opportunities 11% of SI jobs are in healthcare with an average wage of $36,617 Over 37% of each healthcare expenditure is spent outside the 20 county SI region (over $1 billion) 74% of patient services inside-SI are only being reimbursed at 71% of the outside patient services rates Opportunities: 5% shift in Medicaid to Third Party Payer insurance means +$4.5 million in increased reimbursements, adding 50 healthcare jobs $21.9 million in healthcare services recapture, adding 239 healthcare jobs The overall SI citizens health is lower than Illinois with higher levels of chronic disease Opportunity: Education and healthy living strategies are a key component of a robust economic development strategy

116 Chapter 6: Regional Perspective
Southern Illinois — "Garden of the Gods" Chapter 6: Regional Perspective 6.07 Implications & Recommendations

117 Regional Perspective: Implications
6.06 Implications & Recommendations SI is below the Illinois average in key community sustaining areas; educational attainment, population health, poverty, and income The below average elements are balanced by: Many positive natural resources of the area Strong education facilities Geographic location Economic size Skilled workforce that have great untapped potential Continued predominance of public sector income dependency stifles entrepreneurship and lowers the chances for growth and economic improvement to occur Unless private sector business development and incomes increase, the tax base to fund infrastructure improvements is hampered If the age group continues not to see future opportunity in SI and decide to stay, then economic stagnation will very likely continue Without improved curb appeal, quality housing and sound community infrastructure, attraction and retention of skilled workers is challenged Continued loss of healthcare revenues to surrounding providers, when equal services are available locally, severely limits healthcare expansion Limited entrepreneurial structure and incubation facilities restrains SI’s adaptability to global market opportunities — 117 — 117

118 Regional Perspective: Recommendations
6.06 Implications & Recommendations Use Connect SI as the vehicle to bring the 20-county region together under a common strategy with critical mass equal to a major metro area Expand healthy living initiatives and preventative programs — Healthy People = Healthy Economy Implement a more robust communication strategy designed to recognize the uniqueness and many positive aspects of SI, share short-term wins — helps reorient thinking & build momentum Focus on private sector business development and income supported by linking entrepreneurship, incubation and finance resources — strengthens the tax base Implement a Youth Engagement Strategy designed to train and retain this key population sector Implement a region-wide Crossing Boundaries Institute to bring together individuals from across the region to focus on a common vision for SI — collaboration needs to be a guiding principle for all aspects of SI life! Develop and form a Livable Community Forum to address key challenges of curb appeal and address other elements contained in the livability index Develop new and innovative financing mechanisms to deal with aging infrastructure Refocus education and training to ensure alignment with new KBE and healthcare workforce demands as well as address skilled labor shortages Expand and continue the great work of the Network Providers and Healthcare COI’s to collectively achieve the goals that will enable overall economic improvement — 118 — 118

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