The Mississippi Small Business and Grocer Investment Act

Transcription

1 January 2015 The Mississippi Small Business and Grocer Investment Act A Closer Look at the Policies and Issues associated with Making Investments in Underserved Communities in the State of Mississippi An Overview for Decision-Makers Mississippi State Research Team Judith Phillips, M.B.A., ABD, Research Analyst Kayla Lee-Hopkins, M.P.P.A. John Harper, M.P.P.A. Dallas Breen, Ph.D., Assistant Director Philip (Eddie) French, Ph.D., Director

2 Mississippi State University Graduate Students Supported by Funding from The Partnership for a Healthy Mississippi The Partnership for a Healthy Mississippi provided funding to the Stennis Institute of Government and Community Development at Mississippi State University to complete the scope of work presented in this study; this funding is used by the Stennis Institute to provide graduate students with tuition and graduate student stipends, thereby enabling them to pursue graduate level course work at Mississippi State University. These students make a significant and important contribution to all research conducted by the Stennis Institute. John Harper is from Braxton, Mississippi and graduated from Mendenhall High School in He earned an associate s degree in Business Administration from Copiah Lincoln Community College before transferring to Mississippi State University where he received a bachelor s degree in Political Science. He completed his master s degree in Public Policy and Administration program in John is currently pursuing a doctorate degree in Higher Education Leadership to prepare for a career in administration at a college or university. Kayla Lee Hopkins is originally from Brandon, MS and graduated from Northwest Rankin High school in She completed a bachelor s degree in Political Science from Mississippi State University and graduated summa cum laude. Kayla completed her master s degree in Public Policy and Administration in She currently works as a Graduate Research Assistant for the Stennis Institute of Government. Previously, she was a student intern for the Department of Veterans Affairs in Jackson, MS. Kayla is currently working on completing a doctoral degree at Mississippi State University and hopes to continue conducting research related to community and economic development at the state and local level in the future. Jacorius Liner is from Rosedale, MS. He graduated from West Bolivar High School in 2009 and attended Mississippi University for Women (MUW) where he earned a bachelor s degree in Political Science with a minor in Legal Studies. While at MUW, Jacorius was on the President s List and the Dean s List. Jacorius completed his M.P.P.A. in 2014 and is currently pursuing a doctoral degree at Mississippi State University. Adriene Davis is originally from Fort Knox, Kentucky. He graduated from Avon High School in Avon, IN and then received his bachelor s degree in Sociology at Indiana University. Adriene received his master s degree from the University of Memphis. While attending the University of Memphis, he was inducted into Alpha Kappa Delta, the sociology honors society. Adriene began his work as a graduate student assistant at the Stennis Institute in the fall of Adriene is currently a sociology doctoral student at Mississippi State University and intends to pursue a career as a university professor upon completion of his PhD.

3 The Mississippi Small Business and Grocer Investment Act (H.B. 1328) Executive Summary In 2014, the Mississippi Legislature passed, and Governor Phil Bryant signed, House Bill 1328; this bill is entitled the Small Business and Grocer Investment Act. In recognition of the need to increase access to healthy and nutritious food, the purpose of the Mississippi Small Business and Grocer Investment Act is to provide grants, loans, and other incentives to promote access to healthy foods in Mississippi s underserved communities. Investments made to increase access to healthy and affordable food options such as meat and poultry, fresh fruits and vegetables, and milk and dairy products in underserved communities have the potential to improve community health, reduce the risk of obesity, diabetes, and heart disease, promote community revitalization, and create new jobs. At the request of the Partnership for a Healthy Mississippi, a research team at the Stennis Institute of Government at Mississippi State University examined the issues associated with the lack of access to healthy food, the policy initiatives that have been implemented in other states to incentivize investments in underserved communities, and the potential economic and fiscal impact of investments in Mississippi s underserved communities that might be associated with a state healthy food financing initiative; the findings of this analysis are presented in this study. Driven by the obesity epidemic in the United States, policies that reduce obesity, improve health outcomes, and contain the cost of obesity related healthcare have received increasing attention. A large body of scientific and public policy research has found that lack of access to healthy food may be a contributing factor to the high prevalence of obesity, diabetes, and related health problems that are found in the disadvantaged populations that live in underserved communities. In 2010, the federal government introduced the Healthy Food Financing Initiative to provide funding for programs designed to increase the supply of healthy foods in underserved communities. The Healthy Food Financing Initiative is a multi year, interagency collaboration that provides funding and incentives from the U.S. Department of Health and Human Services, the U.S. Department of Agriculture, and the U.S. Department of the Treasury to support investments and programs in eligible census tracts throughout the United States. This study assumes that a Mississippi healthy food financing initiative will provide state funding using taxpayer dollars to incentivize investment in underserved communities in the state of Mississippi; these investments are assumed to use a mix of public and private funding to offset the barriers to entry for food outlets in communities where financing needs cannot be met by conventional financial institutions. Although there are numerous underserved communities throughout the state of Mississippi, census tracts that are eligible for federal grants, loans, and incentives under the federal Healthy Food Financing Initiative will enable the state of Mississippi to significantly leverage and minimize the share of state funding that may be associated with the Mississippi Small Business and Grocer Investment Act; for this reason, HFFI A Closer Look at Underserved Communities in Mississippi

4 The Mississippi Small Business and Grocer Investment Act (H.B. 1328) eligible census tracts are specifically delineated in this study. The development of a Mississippi healthy food financing initiative will require programs that are designed to be flexible to assure that the food retailing format is appropriate to the specific needs of the market within each underserved community. The most common business retail formats used to increase access to healthy food within underserved communities are investments in supermarkets, grocery stores, farmers markets, food cooperatives, or food hubs. The economic, market, and consumer profiles that exist within each underserved community will require appropriately designed retail formats and each retail format will have unique capital requirements, different sources of capital investment, and may use different investment structures; although policies may be adopted to enable making these investments in any geographic location in the state of Mississippi, strategically prioritizing investments in federal HFFI qualifying census tracts will enable multiple sources of funding to be leveraged to capitalize investments in Mississippi s underserved communities. These issues are further discussed in the Policies and Intervention Strategies in Underserved Communities section of this report (beginning on page 58). A comprehensive analysis of the 659 census tracts in 72 counties within the state of Mississippi that are designated as federal HFFI qualifying census tracts to receive funding from the federal Healthy Food Financing Initiative was beyond the scope of this study. The Stennis Research Team selected four counties for inclusion in this study: Lowndes County, Pearl River County, Sunflower County, and Washington County. A socioeconomic profile for all census tracts within each of these four counties is included in this study; importantly, all HFFI qualifying census tracts examined in this study are also eligible to receive federal New Market Tax Credits, as well as other federal funding, to leverage investments made in Mississippi s underserved communities. The total population of these four counties was 194,453. The study found that within these four counties, there were a total of 102,089 people living in HFFI qualifying census tracts this represented 52.5 percent of the total population of the four counties. There were a total of 49,472 children 17 years or younger living in the four counties; 27,160 of these children (54.9 percent) lived in HFFI qualifying census tracts. Of the 25,626 people age 65 and older living in the four counties, 12,200 (47.6 percent) lived in HFFI qualifying census tracts. The total female population of the four counties that were examined in this study was 100,236, representing 51.5 percent of the total population across the four counties; of the total female population in the four counties, 53.7 percent lived in HFFI qualifying census tracts. Female households with children under 18 with no husband present were also found to be disproportionately represented in HFFI qualifying census tracts; across the four counties, there were a total of 8,192 female households with children under 18 with no husband present; 70.6 percent of these households were located in HFFI qualifying census tracts. Although the magnitude of this problem exhibited variation within each county, this research found that HFFI qualifying census tracts generally exhibit a higher percentage of female households with children under 18 with no husband present as compared to other census tracts within each A Closer Look at Underserved Communities in Mississippi

5 The Mississippi Small Business and Grocer Investment Act (H.B. 1328) county. Of particular concern is the extraordinarily high poverty level for female households with children and no husband present; at the county level, poverty rates for these households ranged from a low of 56.6 percent to a high of 66.7 percent. The poverty level for female households with children and no husband present was found to be higher within the majority of the HFFI qualifying census tracts as compared to the county average poverty rate for these households; in many HFFI qualifying census tracts that were examined during this study, the poverty rate for female households with children and no husband present was found to exceed 80 percent. Another indicator of poverty is a household income of less than $15,000. In the state of Mississippi, 19.5 percent of households have incomes of less than $15,000. There were 16,763 households with a household income of less than $15,000 in the four counties that were included in this study, representing 23.9 percent of all households in the four counties; 66.9 percent of all households (11,221 households) with incomes of less than $15,000 were found to live in HFFI qualifying census tracts. This pattern was found to be generally consistent for each county that was included in this study. When compared to other census tracts within each of the four counties examined, HFFI qualifying census tracts were found to be characterized as exhibiting relatively lower educational attainment levels, higher unemployment rates, lower income, and higher poverty. For those who were employed, median income from employment tended to be lower in HFFI qualifying census tracts; for those who were retired, retirement income tended to be lower in HFFI qualifying census tracts; for those who were receiving income from Social Security, Social Security income tended to be lower in HFFI qualifying census tracts. These findings reinforce the delineation of federal HFFI qualifying census tracts as a metric to identify underserved communities in the state of Mississippi. Low educational attainment, unemployment, low income, and poverty walk hand in hand with food insecurity, poor nutrition, obesity, and obesity related healthcare costs. Scientific research has demonstrated the relationship between socioeconomic status and obesity; the prevalence of obesity is disproportionately higher among people with limited resources. Common morbidities associated with obesity include diabetes, coronary heart disease, hypertension, and stroke; the cost of obesity and the treatment of obesity related illnesses has grown exponentially. The economic cost of obesity includes direct medical costs which include diagnosis, treatment, and drug therapies; the indirect cost of obesity includes the value of lost work, decreased productivity at work, and absenteeism. From a public policy perspective, understanding the societal cost and economic burden of obesity related healthcare costs can be valuable in the decision making process when evaluating the cost and benefit of obesityrelated cost containment policies. With an adult obesity rate of 35.1 percent in 2013, Mississippi and West Virginia have the highest obesity rates in the United States. Although there is no reliable data for the obesity rate at the census tract level, the socioeconomic profile of HFFI qualifying census tracts in Mississippi is indicative of obesity rates that are even higher A Closer Look at Underserved Communities in Mississippi

6 The Mississippi Small Business and Grocer Investment Act (H.B. 1328) than 35.1 percent; for example, the obesity rate for females in Mississippi is 36.1 percent, the obesity rate for those with less than a high school diploma is 38.7 percent in Mississippi, and among those with a household income of less than $15,000, the obesity rate in Mississippi is 41.2 percent. The relatively high proportion of females, individuals with low educational attainment levels, and households with incomes of less than $15,000 that were found in HFFI qualifying census tracts reinforces the assumption that obesity rates and obesity related healthcare costs tend to be higher in HFFI qualifying census tracts. The most recently available statistics from the Office of the Actuary at the Centers for Medicare and Medicaid indicate that the average annual growth rate in the cost of healthcare in the state of Mississippi is outpacing the average annual growth rate of the cost of healthcare in the United States; in Mississippi, the per capita healthcare spending for those with publically funded healthcare is more than twice that of those with private healthcare insurance. Within the context of the anticipated growth in the cost of healthcare, population growth, a shift from private insurance to public insurance, and related enrollment increases in public health insurance programs, the burden of these increasing costs and the obesity related cost of healthcare on the state of Mississippi is unsustainable. In the state of Mississippi, approximately 35.7 percent of the civilian non institutionalized population relies upon publically funded health care insurance and approximately 17.5 percent of the population has no healthcare insurance. Within the HFFI census tracts in the four counties that were the focus of this study, 44.1 percent of the population relied upon public health insurance and 22.8 percent of the population had no health care insurance; within these HFFI census tracts, an estimated 42,737 people relied upon public health insurance coverage and 22,100 people had no health insurance coverage. To provide guidelines for decisionmakers to evaluate public investment in underserved communities, the Stennis Research Team developed two relatively conservative estimates of the obesity related healthcare cost associated with each HFFI census tract; these more detailed findings are contained in the body of this study. Across all HFFI census tracts that were examined in this study, the annual obesityrelated healthcare cost associated with those who had public insurance coverage was estimated to range between $10,310,712 and $32,761,240. In addition to the potential obesity related healthcare cost reduction that may be realized by increasing access to healthy foods, investments in underserved communities will create economic and fiscal benefits. The Stennis Research Team used econometric input output modeling to estimate the economic and fiscal impact of investments in the construction or renovation of supermarkets, grocery stores, and the purchase of equipment or fixtures by existing stores to increase the supply of healthy foods in Mississippi s underserved communities. The actual economic and fiscal impact of investments made in Mississippi s underserved communities will be determined by multiple factors that include, but are not limited to: the site selected (which will determine the size of the market served), the amount A Closer Look at Underserved Communities in Mississippi

7 The Mississippi Small Business and Grocer Investment Act (H.B. 1328) and type of construction or renovation investment, the sales associated with the ongoing operations of the business, management, and other micro and macro economic factors that were unknown at the time of this study. To address this information gap, the Stennis Research Team used secondary data derived from the Bureau of Labor Statistics Consumer Expenditure Survey and the Environmental Systems Research Institute to develop estimates of consumer spending on food at home and the food retail sales gap for each HFFI census tract in the four counties examined in this study. Alternative scenarios of investments were then modeled for each of the four counties using econometric input output analysis; the findings of this research are presented in the narrative for each county. Within the context of each investment being unique, the Stennis Research Team modeled three alternative investment scenarios at the state level to provide decision makers with a generalized estimate of the economic and fiscal impact that may be associated with potential investments in Mississippi s underserved communities. Although job creation in the state of Mississippi is an important potential benefit that may be associated with investments made in Mississippi s underserved communities, an important consideration for decision makers is the potential offsetting tax revenue that may be recaptured as a result of the investment of public funds; specifically, potential revenue to state government in the form of sales tax, individual income tax, and corporate income tax. The econometric input output models indicate that an investment of $6,570,000 in a 45,000 square foot supermarket with anticipated annual sales of $5,401,464 would have the economic impact of creating 92.5 full time equivalent jobs during the construction phase of the project and would support approximately 35.1 full time equivalent jobs during the ongoing operations of business activities. The fiscal impact of this investment would be to generate approximately $219,181 in combined sales tax, personal income tax, and corporate income tax during the construction phase of project, and an additional $162,140 annually of combined sales tax, personal income tax, and corporate income tax revenue would be associated with the ongoing operations of the business, upon completion of construction activities. Over a 10 year period, the gross fiscal impact of this investment would be approximately $1,840,581 in tax revenues accruing to the benefit of the state of Mississippi, assuming no sales tax diversions to a municipality, no labor displacement, or substitution effects are associated with the investment. A change in the dollar amount of the initial investment in construction or renovation or a change in the projected sales associated with the ongoing operations of the business will also change the economic and fiscal impact of any state healthy food financing initiative investment made in an underserved community in the state of Mississippi. For example, an initial construction investment of $2,920,000 in a 20,000 square foot grocery store with projected annual sales of $2,000,000 modeled at the state level would have a projected fiscal impact of $97,414 in combined sales tax, personal income tax, and corporate income tax during the construction phase of the project, and an annual fiscal impact of $60,025 in combined sales tax, personal income tax, and corporate income tax during the ongoing operations of the business. Over a 10 year period, the gross A Closer Look at Underserved Communities in Mississippi

8 The Mississippi Small Business and Grocer Investment Act (H.B. 1328) fiscal impact of this investment would be approximately $697,250 in tax revenues accruing to the benefit of the state of Mississippi, assuming no sales tax diversions to a municipality, no labor displacement, or substitution effects are associated with the investment. This smaller investment could be anticipated to create approximately 41.1 full time equivalent jobs during the construction phase of the project, and an additional 13 full time equivalent jobs would be associated with ongoing business operations. The permanent job creation that is associated with the ongoing business operations that result from investments made in Mississippi s underserved communities represents a significant employment and job training opportunity in census tracts characterized by high unemployment and low educational attainment; most supermarket and grocery store jobs are entry level positions and workers are frequently trained on the job; therefore these types of employment opportunities are well matched with the educational and job skills profile that was found to exist within the HFFI census tracts that were examined in this study. Many supermarkets and independent grocers provide employee benefits that include healthcare insurance, retirement programs, and retirement savings plans that would improve the negative income conditions that were found to exist within the majority of the HFFI qualifying census tracts and would further reduce the public burden of obesity related healthcare costs. Investments in Mississippi s underserved communities also represent an opportunity for economic revitalization in these communities by creating an anchor that has the potential to increase retail traffic and attract other services and retail stores into the area. State healthy food financing initiatives are designed to provide initial seed money or tax incentives to support public private programs that aggregate capital from multiple sources to include banks, philanthropic organizations, and other investors to create loan pools that may be further leveraged by equity investment through the use of federal New Market Tax Credits and other sources of federal funding available through the Healthy Food Financing Initiative. For example, healthy food financing models may use a combination of grant funding, debt capital, loan guarantees, tax exempt bond financing, and New Market Tax Credits to fund investments in HFFI qualifying census tracts. A healthy food retail strategy may also focus on farmers markets; this strategy might include supporting the creation of new farmers markets in underserved communities, increasing the capacity of existing farmers markets by providing refrigeration equipment that would expand the types of products available (i.e. eggs, poultry, pork, beef, or lamb), providing more permanent structures to enable the farmers market to increase either the scope of product offerings or its frequency of services, or assuring that all farmers markets are able to accept SNAP payments each strategy would require different levels of investment, and in the case of farmers markets or food hubs, multiple additional sources of capital may be available from grants or low interest loans from the U.S. Department of Agriculture. As a result, the state portion of funding for a healthy food financing initiative to attract investment into underserved communities is anticipated to be significantly leveraged by A Closer Look at Underserved Communities in Mississippi

9 The Mississippi Small Business and Grocer Investment Act (H.B. 1328) private capital. Using the Pennsylvania Fresh Food Financing Initiative as a model, the Stennis Research Team assumed that the state share of a $6,570,000 investment in a 45,000 square foot supermarket would be approximately $1,194,545; the fiscal impact of this investment would be anticipated to yield sufficient sales tax, personal income tax, and corporate income tax revenues to provide a pay back of this investment within approximately six years. This investment recapture period assumes that the state share of the investment is able to be leveraged with additional sources of capital and does not include potential savings associated with any reduction in obesity related healthcare costs that may result from increased access to affordable, healthy foods in Mississippi s underserved communities. To further explore the potential economic and fiscal impacts that may be associated with the Mississippi Small Business and Grocer Investment Act, this study prioritized the analysis of making investments in supermarkets and grocery stores in census tracts in Mississippi that qualify for additional funding under the federal Healthy Food Financing Initiative (HFFI qualifying census tracts). Although not fully explored in this study, the Stennis Research Team found that investment in value added agricultural policies represent a significant economic development opportunity for the state of Mississippi. Mississippians spend an estimated $821,950,189 on fruits and vegetables; in fiscal year 2013, Supplemental Nutrition Assistance Program (SNAP) benefits in the state of Mississippi were $993,077,956; and in 2013, National School Lunch Program payments were $197,659,575 in Mississippi. Direct to consumer agricultural programs that enable agricultural producers in the state to capture a greater share of the farm to retail spread should be considered an important component of a Mississippi healthy food financing initiative. This study focused on the potential economic and fiscal impact of investments directly related to Mississippi s Small Business and Grocer Investment Act; fund management, the ability to leverage equity and debt investment, prevailing interest rates, debt service, store management, site selection, and multiple micro and macro economic factors that impact the business climate and the success of any business operation will also determine the magnitude of the economic and fiscal impact that the program will have in the state of Mississippi. Food retail investments in underserved communities should not be stand alone strategies, they must be integrated with comprehensive community based obesity prevention initiatives and education programs as a major focus of healthcare cost containment policies. To ensure success, a wide range of partners, including health and social service providers, schools, businesses, economic and community developers, and community based organizations must be integrated with Mississippi healthy food financing policy initiatives. As a component of a comprehensive community based obesity prevention initiative, investments made in Mississippi s underserved communities to increase access to affordable, healthy foods present a significant opportunity to create jobs for local residents, increase economic activity, offset the economic cost of obesity, and create healthier communities in the state of Mississippi. A Closer Look at Underserved Communities in Mississippi

10 The Mississippi Small Business and Grocer Investment Act (H.B. 1328) Studies conducted by the Stennis Institute of Government and Community Development at Mississippi State University are intended to inform the public policy decision making process; the Stennis Institute does not advocate for specific public policies and this study is not intended to represent a policy recommendation. A Closer Look at Underserved Communities in Mississippi

11 Table of Contents Introduction General and Limiting Conditions About the Economic Impact Methodology used in this Study Access to Healthy Food in Underserved Communities Underserved Communities and Health The Health Effects of Obesity Obesity among Children Childhood Obesity and Academic Outcomes The Economic Cost of Obesity The Economic Cost of Childhood Obesity Food Insecurity Food Insecurity and Health Policies and Intervention Strategies in Underserved Communities Value Added Agriculture The Local Food Movement Value Added Food Centers (Agribusiness Incubators) Community Supported Agriculture Farmers Markets Farm to Table Centers and Food Hubs Farm to School Programs Scaling Up Local Food Direct to Consumer Sales in the United States Direct to Consumer Sales in Mississippi The Supermarket and Grocery Store Industry Underserved Census Tracts in Four Mississippi Counties Lowndes County, Mississippi Eligible Healthy Food Financing Initiative Census Tracts in Lowndes County Overview of Lowndes County, Mississippi i

12 Lowndes County Income by Source Food Insecurity in Lowndes County The Lowndes County Workforce Health Care Insurance in Lowndes County The Economic Impact of Investments in Lowndes County The Economic Impact of a Supermarket Investment in Lowndes County The Economic Impact of a Grocery Store Investment in Lowndes County Pearl River County, Mississippi Eligible Healthy Food Financing Initiative Census Tracts in Pearl River County Overview of Pearl River County Food Insecurity in Pearl River County Pearl River County Income by Source The Pearl River County Workforce Health Care Insurance in Pearl River County The Economic Impact of Investments in Pearl River County The Economic Impact of a Supermarket Investment in Pearl River County The Economic Impact of a Grocery Store Investment in Pearl River County Investments in Store Renovations, Expansion, and Equipment Purchases in Pearl River County Sunflower County, Mississippi Eligible Healthy Food Financing Initiative Census Tracts in Sunflower County Overview of Sunflower County Food Insecurity in Sunflower County Sunflower County Income by Source The Sunflower County Workforce Health Care Insurance in Sunflower County The Economic Impact of Investments in Sunflower County The Economic Impact of a Supermarket Investment in a Sunflower County The Economic Impact of a Grocery Store Investment in Sunflower County Washington County, Mississippi ii

13 Eligible Healthy Food Financing Initiative Census Tracts in Washington County Overview of Washington County, Mississippi Food Insecurity in Washington County Washington County Income by Source The Washington County Workforce Health Care Insurance in Washington County The Economic Impact of Investments in Washington County The Economic Impact of a Supermarket Investment in Washington County The Economic Impact of a Grocery Store Investment in Washington County Investments in Store Renovations, Expansion, and Equipment Purchases in Washington County Standardizing the Economic Effects of Investments in Underserved Communities in the State of Mississippi The Economic Impact of a Supermarket Investment in Mississippi The Economic Impact of a Grocery Store Investment in Mississippi The Economic Impact of Small Loans of $500,000 for Store Remodels and New Refrigeration Equipment The Cost Benefit of Investments in Mississippi s Underserved Communities Review of the Findings Appendices Appendix A: U.S. Treasury HHFI FA Funding to Community Development Financial Institutions 2011 through CCLXI Appendix B: Limited Supermarket Access Rankings by Area Size... CCLXVII Index of Figures Figure 1: Obesity and Overweight High School Students Figure 2: Obesity and Overweight by Gender Figure 3: Per Capita Additional Cost of Obesity Related Health Care Cost Figure 4: Distribution of Total National Health Care Expenditures by Source of Payment, 2009 Actual and 2020 Projected (in Billions of Dollars) Figure 5: U.S. Per Capita Spending on Health Care 2007 through Figure 6: Total National Health Expenditures Funded from Public Sources, Actual through 2012 and Projected through 2023 (in billions of dollars) iii

14 Figure 7: State of Mississippi Enrollment in Medicaid and State Children's Health Insurance Programs 2003 through Figure 8: Comparative Physician Visits Figure 9: Comparative Hospitalization Rates Figure 10: Comparative Medical and Drug Expenditures Figure 11: Dietary Consumption Patterns of High School Students Figure 12: Number of U.S. Supermarkets and Grocery Stores Figure 13: Supermarkets and Grocery Stores in Mississippi Figure 14: Supermarket Sales by Department as a Percentage of Total Supermarket Sales Figure 15: Comparison of U.S. and Mississippi Distribution of Supermarkets and Grocery Store Establishments by Number of Employees Figure 16: Lowndes County Population Estimates 2010 through Figure 17: Pearl River County Population 2000 through Figure 18: Sunflower County Population 2000 through Figure 19: Washington County Population 2000 through Index of Tables Table 1: Healthy Food Financing Initiative Financial Assistance Awards 2011 through Table 2: New Market Tax Credit Allocatees Domiciled in Mississippi 2002 through Table 3: Comparative Disease Mortality Rates for the United States and Mississippi Table 4: Comparative Prevalence of Health Risk Behaviors and Chronic Conditions in the United States and Mississippi Table 5: Comparative Overweight and Obesity Prevalence by Population Classification Groups Table 6: Personal Health Care Spending by Payer Group for Mississippi and the United States, Comparison of 2004 and Table 7: The Uninsured Adult Population of Mississippi and Obesity Table 8: Population Obesity Estimates for the State of Mississippi Table 9: Obesity Related Health Costs in Mississippi using the Cawley and Meyerhoefer Model Table 10: Direct to Consumer Sales in the U.S. and Mississippi 2007 and Table 11: Direct to Consumer Farm Sales by State 2007 and Table 12: Limited Supermarket Access Rankings by State Table 13: LSA Areas and Rankings by Population for Selected Areas Table 14: U.S. Supermarket and Grocery Store Industry Metrics Table 15: Distribution of Employment and Occupational Wages in the Mississippi Supermarket and Grocery Store Industry Table 16: The U.S. Supermarket and Grocery Store Industry (NAICS 44511) Establishments and Sales Table 17: Distribution of Employment, Stores, and Sales in the U.S. and Mississippi Supermarket and Grocery Store Industry Table 18: Lowndes County Population by Census Tract Table 19: Lowndes County Racial Distribution by Census Tract Table 20: Lowndes County Selected Gender, Age, and Family Population Data by Census Tract iv

15 Table 21: Lowndes County Households and Families by Type Table 22: Poverty Rates for Families and Individuals in Lowndes County Table 23: Lowndes County Educational Attainment for the Population Age 25 and Older Table 24: Lowndes County Comparative Employment and Income Table 25: Lowndes County Comparative Earnings and Income by Source Table 26: Lowndes County Employment by Industry Table 27: Median Earnings for Lowndes County Workers Table 28: Health Insurance Coverage for the Civilian Non Institutionalized Population in Lowndes County Table 29: Lowndes County Estimated Spending on Food Table 30: Lowndes County Household Spending on Food at Home and the Retail Spending Gap Table 31: The Economic Impact of a $6,570,000 Construction Investment in Lowndes County Table 32: The Fiscal Impact of a $6,570,000 Construction Investment in Lowndes County Table 33: The Fiscal Impact of the Ongoing Operations of a Supermarket with Annual Sales of $8,352, Table 34: The Economic Impact of the Ongoing Operations of a Supermarket with Annual Sales of $8,352, Table 35: The Economic Impact of a $2,920,000 Construction Investment in Lowndes County Table 36: The Fiscal Impact of a $2,920,000 Construction Investment in Lowndes County Table 37: The Economic Impact of the Ongoing Operations of a Grocery Store with Annual Sales of $2,037, Table 38: The Fiscal Impact of the Ongoing Operations of a Grocery Store with Annual Sales of $2,307, Table 39: Pearl River County Population by Census Tract Table 40: Pearl River Racial Distribution by Census Tract Table 41: Pearl River County Selected Gender, Age, and Family Population Data by Census Tract Table 42: Pearl River County Households and Families by Type Table 43: Poverty Rates for Families and Individuals in Pearl River County Table 44: Pearl River County Educational Attainment for the Population Age 25 and Over Table 45: Pearl River County Comparative Employment and Income Table 46: Pearl River County Comparative Earnings and Income by Source Table 47: Pearl River County Employment by Industry Table 48: Pearl River County Median Earnings for Workers Table 49: Health Insurance Coverage for the Civilian Non Institutionalized Population in Pearl River County Table 50: Pearl River County Estimated Spending on Food Table 51: Pearl River County Household Spending on Food at Home and the Retail Spending Gap Table 52: The Economic Impact of a $6,570,000 Construction Investment in Pearl River County Table 53: The Fiscal Impact of a $6,570,000 Construction Investment in Pearl River County Table 54: The Economic Impact of the Ongoing Operations of a Supermarket with Annual Sales of $8,446, Table 55: The Fiscal Impact of the Ongoing Operations of a Supermarket with Annual Sales of $8,446, v

16 Table 56: The Economic Impact of a $2,920,000 Construction Investment in Pearl River County Table 57: The Fiscal Impact of a $2,920,000 Construction Investment in Pearl River County Table 58: The Economic Impact of the Ongoing Operations of a Grocery Store with Annual Sales of $2,000, Table 59: The Fiscal Impact of the Ongoing Operations of a Grocery Store with Annual Sales of $2,000, Table 60: The Economic Impact of a $500,000 Renovation, Expansion, and Equipment Purchase Table 61: The Fiscal Impact of a $500,000 Renovation, Expansion, and Equipment Purchase Table 62: The Economic Impact of the Ongoing Operations of a Small Store with Annual Sales of $500, Table 63: The Fiscal Impact of the Ongoing Operations of a Small Store with Annual Sales of $500, Table 64: Sunflower County Population by Census Tract Table 65: Sunflower County Racial Distribution by Census Tract Table 66: Sunflower County Selected Gender, Age, and Family Population Data by Census Tract Table 67: Percentage of Families and Individuals in Poverty in Sunflower County Table 68: Sunflower County Households and Families by Type Table 69: Sunflower County Educational Attainment for the Population 25 and Older Table 70: Sunflower County Comparative Employment and Income Table 71: Sunflower County Comparative Earnings and Income by Source Table 72: Sunflower County Employment by Industry Table 73: Median Earnings for Workers in Sunflower County Table 74: Health Insurance Coverage for the Civilian Non Institutionalized Population in Sunflower County Table 75: Sunflower County Estimated Household Spending on Food Table 76: Sunflower County Household Spending on Food at Home and the Food Retail Spending Gap Table 77: The Economic Impact of a $6,570,000 Construction Investment in Sunflower County Table 78: The Fiscal Impact of a $6,570,000 Construction Investment in Sunflower County Table 79: The Economic Impact of the Ongoing Operations of a Supermarket with Annual Sales of $4,951, Table 80: The Fiscal Impact of the Ongoing Operations of a Supermarket with Annual Sales of $4,951, Table 81: The Economic Impact of a $2,920,000 Construction Investment in Sunflower County Table 82: The Fiscal Impact of a $2,920,000 Construction Investment in Sunflower County Table 83: The Economic Impact of the Ongoing Operations of a Grocery Store with Annual Sales of $2,131, Table 84: The Fiscal Impact of the Ongoing Operations of a Grocery Store with Annual Sales of $2,131, Table 85: Washington County Population by Census Tract Table 86: Washington County Racial Distribution by Census Tract Table 87: Washington County Selected Gender, Age, and Family Population Data by Census Tract Table 88: Washington County Households by Type vi

17 Table 89: Washington County Poverty Rates for Families and Individuals Table 90: Washington County Educational Attainment for the Population 25 Years and Older Table 91: Washington County Comparative Employment and Income Table 92: Washington County Comparative Earnings and Income by Source Table 93: Washington County Employment by Industry Sector Table 94: Washington County Median Earnings for Workers Table 95: Health Insurance Coverage for the Civilian Non Institutionalized Population in Washington County Table 96: Washington County Household Spending on Food Table 97: Washington County Household Spending on Food at Home and the Retail Spending Gap for Food at Home Table 98: The Economic Impact of a $6,570,000 Construction Investment in Washington County Table 99: The Fiscal Impact of a $6,570,000 Construction Investment in Washington County Table 100: The Economic Impact of the Ongoing Operations of a Supermarket with Annual Sales of $5,116, Table 101: The Fiscal Impact of the Ongoing Operations of a Supermarket with Annual Sales of $5,116, Table 102: The Economic Impact of a $2,920,000 Construction Investment in Washington County Table 103: The Fiscal Impact of a $2,920,000 Construction Investment in Washington County Table 104: The Economic Impact of the Ongoing Operations of a Grocery Store with Annual Sales of $3,851, Table 105: The Fiscal Impact of the Ongoing Operations of a Grocery Store with Annual Sales of $3,851, Table 106: The Economic Impact of a $500,000 Construction or Renovation Investment Table 107: The Fiscal Impact of a $500,000 Construction or Renovation Investment Table 108: The Economic Impact of the Ongoing Operations of a Store with $500,000 in Grocery Sales in Washington County Table 109: The Fiscal Impact of the Ongoing Operations of a Store with $500,000 in Grocery Sales in Washington County Table 110: The Economic Impact of a $6,570,000 Construction Investment in a 45,000 Square Foot Supermarket Table 111: The Fiscal Impact of a $6,570,000 Construction Investment in a 45,000 Square Foot Supermarket Table 112: The Economic Impact of the Ongoing Operations of a Supermarket with Annual Sales of $5,402, Table 113: The Fiscal Impact of the Ongoing Operations of a Supermarket with Annual Sales of $5,402, Table 114: The Economic Impact of a $2,920,000 Construction Investment in a Grocery Store in Mississippi Table 115: The Fiscal Impact of a $2,920,000 Construction Investment in a Grocery Store in Mississippi Table 116: The Economic Impact of the Ongoing Operations of a Grocery Store with Annual Sales of $2,000,000 in Mississippi vii

18 Table 117: The Fiscal Impact of the Ongoing Operations of a Grocery Store with Annual Sales of $2,000,000 in Mississippi Table 118: The Economic Impact of a $500,000 Investment in a Store Renovation in Mississippi Table 119: The Fiscal Impact of a $500,000 Investment in a Store Renovation in Mississippi Table 120: The Economic Impact of the Ongoing Operations of a Store with Annual Sales of $500, Table 121: The Fiscal Impact of the Ongoing Operations of a Store with Annual Sales of $500, Table 122: Lowndes County Obesity related Healthcare Cost Estimates Table 123: Pearl River County Obesity related Healthcare Cost Estimates Table 124: Sunflower County Obesity related Health Care Cost Estimates Table 125: Comparison of Adult Obesity Rate by County Table 126: Washington County Obesity related Healthcare Cost Estimates Table 127: Estimated Obesity related Healthcare Cost Savings Associated with a One Percent Reduction in the Obesity Rate in Lowndes County Table 128: Estimated Obesity related Healthcare Cost Savings Associated with a One Percent Reduction in the Obesity Rate in Pearl River County Table 129: Estimated Obesity related Healthcare Cost Savings Associated with a One Percent Reduction in the Obesity Rate in Sunflower County Table 130: Estimated Obesity related Healthcare Cost Savings Associated with a One Percent Reduction in the Obesity Rate in Washington County Table 131: Projections of the Economic and Fiscal Impact of a Mississippi Healthy Food Financing Initiative Pilot Project Table 132: The Economic Impact of a $2,000,000 Increase in the Direct to Consumer Agricultural Sales of Fruits and Vegetables Table 133: The Fiscal Impact of a $2,000,000 Increase in Direct to Consumer Agricultural Sales of Fruits and Vegetables Table 134: Overview of County Socio demographic Characteristics of the Population Table 137: Recipients of HFFI FA Funding 2011 through CCLXIII Table 138: U.S. Treasury, CDFI NMTC Data for Washington, Pearl River, Lowndes, and Sunflower Counties... CCLXV Table 139: LSA Rankings for Major Metro Areas with Population Greater than 1,000, CCLXIX Table 140: LSA Rankings for Metro Areas with Population between 500,000 and 1,000, CCLXX Table 141: LSA Rankings for Metro Areas with Population between 250,000 to 500, CCLXXI Table 142: LSA Rankings for Metro Areas with Populations less than 250, CCLXXIII Table 143: LSA Rankings for Micropolitan Areas... CCLXXVI Index of Maps Map 1: Farmers' Markets in Mississippi Map 2: Direct to Consumer Sales Map 3: Direct to Consumer Sales per Farm in Map 4: Direct to Consumer Farm Sales in Mississippi Map 5: Lowndes County HFFI Qualifying Census Tracts Map 6: Lowndes County Reference Map viii

19 Map 7: Pearl River County HFFI Qualifying Census Tracts Map 8: Pearl River County Reference Map Map 9: Sunflower County HFFI Qualifying Census Tracts Map 10: Sunflower County Reference Map Map 11: Washington County HFFI Qualifying Census Tracts Map 12: Washington County Reference Map ix

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21 Introduction In recognition of the need to increase access to healthy and nutritious food, the Mississippi State Legislature passed, and Governor Phil Bryant signed, House Bill 1328 during the 2014 Regular Session; the legislation is entitled as the Small Business and Grocer Investment Act. This legislation is designed to provide grants and loans to promote access to healthy foods in Mississippi s underserved communities. This study provides a background of the issues associated with the lack of access to healthy food and the policy initiatives that have been implemented in other states to provide incentives to expand access to healthy foods. A primary focus of this study is to examine the potential economic benefits that may be associated with investments made in Mississippi s underserved communities. To increase access to healthy foods in Mississippi s underserved communities, incentives provided with taxpayer funding from the state of Mississippi may be leveraged with additional federal funds that are available through the federal Healthy Food Financing Initiative. Investments in underserved communities in Mississippi may take multiple forms; these investments may include new construction or the renovation of existing food retail stores, or they may comprise support for Food Hubs or other Community Supported Agriculture (CSAs) programs. To be eligible for federal funds, investments made in Mississippi s underserved communities must be in qualifying HFFI qualifying census tracts. To develop a multifaceted perspective of the socioeconomic profile of Mississippi s underserved communities, four Mississippi counties were selected for inclusion in this study: Lowndes County, Pearl River County, Sunflower County, and Washington County; each county is examined at the census tract level. A team of researchers at the Stennis Institute of Government and Community Development at Mississippi State University profiled census tracts, developed initial estimates of spending for food at home within each census tract in the four counties included in this study, and then modeled potential demand using econometric input output analysis to project the potential economic impact of investments in these underserved census tracts. The public incentives that may be provided under the Small Business and Grocer Investment Act to expand access to healthy food in Mississippi s underserved communities are anticipated to be predominantly market driven investments made by the private sector; each investment will have unique characteristics that were undetermined at the time of this study. The size of each investment, combined with economic and market conditions, consumer purchasing decisions, and the management of each business will ultimately determine the future magnitude of the economic effects of investments in underserved communities. Within this context, the economic impact models provided in this study are designed to provide decision makers with an initial framework to evaluate the potential cost benefit of making public investments in Mississippi s underserved communities. 11