A Review of the Utilization of the Mississippi Development Authority’s Business Development Loan Funds
Executive Summary
Introduction
In general, the purpose of the Mississippi Development Authority’s business development loans is to help to stimulate Mississippi’s economy by fostering the growth of businesses and jobs. These incentive programs are typically offered to the private sector to assist in obtaining the necessary capital to create or expand operations. In some cases, the programs are geared toward providing assistance to governmental entities in order to stimulate economic development in their respective areas.
Conclusions
PEER reviewed seven business development loan programs of the Mississippi Development Authority (MDA). Of the loan programs PEER reviewed, four had annual utilization rates of approximately 28% or less between FY 2006 and FY 2010, with some years of no utilization reported. As of June 30, 2010, those four business development loan programs carried a total loan fund balance of approximately $47.7 million.
For those underutilized programs in which state general obligation debt remains outstanding, the debt used to create these programs has become a financial burden to the state without the intended benefits. In programs for which no further debt exists and the state’s obligation to the bond holder has expired, the Legislature could utilize unspent proceeds for whatever purposes it deems prudent.
Recommendations