Photo: Bobby Rolfe addresses the crowd at a town hall meeting in Kingsport March 15. Photo by Scott Robertson
By Scott Robertson
Economic development in Tennessee is on a roll, and the new man heading up the state’s efforts in that regard says he’s not about to do anything to slow that trend. Former investment banker Bob Rolfe (he introduces himself as Bobby) told a crowd of economic developers, elected officials and reporters in Kingsport last month he plans to continue the aggressive approach that has worked so well over the last few years under preceding Commissioners of Economic and Community Development Bill Haggerty and Randy Boyd.
“Bill’s focus was large projects with high-paying jobs and a whole lot of capital investment,” Rolfe said, “and then Commissioner Boyd for the last two years did a fantastic job of taking what Commissioner Haggerty built and expanding it to include his own initiatives. My job is to take the balance of the two and keep us moving forward. We’re not going to go left and we’re not going to go right. We’re going to keep the ship in the middle of the harbor.”
That having been said, Rolfe added, keeping it in the middle of the harbor doesn’t mean he won’t accelerate when opportunities arise. “We’re going to play offense,” Rolfe said, “and we’re going to be successful. Our job as the chief recruiting officers for our state is to create jobs – to create good, high-paying jobs – both from our companies that are already here, and by recruiting companies from outside the state. That is top of mind every day.”
Rolfe credited the rank-and-file staffers at the economic and community development department for creating the successes he hopes to build upon. “This department had great success before I got here, and they will have great success long after I depart,” Rolfe said. “Our goal has been to be No.1 in the Southeast, and that has not changed.”
The department could take at least some credit for the creation of more than 21,000 jobs in Tennessee last year, including 7,000 in Northeast Tennessee alone, Rolfe said. More than 55 percent of those jobs provided wages higher than the median wage in the counties in which they came to be.
In addition, Rolfe said, Tennessee benefitted from $5.31 billion in capital investment last year through 159 economic development projects in which the department of Economic and Community Development played a role.
At a time when many other states are cutting back on their economic development expenditures, Rolfe said, Tennessee sees the value in continuing to grow the employment base. The state spent about $3,000 per job created last year, he said, saying it was a sound investment. Department of Economic and Community Development figures quote an annual rate of return on that $3,000 figure at 47.5 percent.
In addition to each job created, Rolfe said, “The multiplier of that when new industry expands is other satellite suppliers.” Business breeds business, Rolfe said, and business expansion breeds more expansion. “At the same time, if we didn’t invest in new companies, when they have expansion opportunities, our opportunities to benefit from that are between zero and zero percent.”
“We have a goal to have the lowest unemployment rate in the South by 2025,” Rolfe continued. “That speaks volumes about what we’re all about, which is job creation and job expansion.”
The marketplace of states angling to bring in new high-paying jobs is still quite competitive, despite some states’ decision to cut recruitment funding, Rolfe said. “We have observed trends in other states where the legislatures have said, ‘We’re not going to fund these incentives. Companies are saying, ‘That’s fine. We’ll just take your state off our list.’ So I just want you guys to know we have a host of economic incentives and our governor has made a conscious decision that we are going to be competitive. That means putting our best foot forward, and that means having all the tools in the toolbox. At the end of the day, that makes our job easier.”
One potential headwind for Rolfe’s metaphorical ship in the harbor is the Trump administration’s plan to cut funding to entities including the Appalachia Regional Commission. Of the Department of Economic and Community Development’s total budget last year, around $30 million came in the form of federal grants. “We were successful in deploying those dollars in creating successes across the state,” acknowledged Rolfe.
At this point, he admitted, the state’s strategy for dealing with the possibility of those cuts isn’t tremendously proactive. “I’ll share with you what the governor shared with me Monday night on a recruiting trip. That is the fact that those cuts, in his opinion, will not likely happen in Washington – at least not as we look forward through the next year. We know there is a whole lot of energy around not only slashing those budget dollars, but the whole other universe that’s attached to the president’s proposed budget. We can just simply say, ‘We don’t think it’s going to happen in the short term.’ What happens down the road we really don’t know. But sharing with you the intelligence the governor shared with us, we really don’t think those cuts will stick.”
In other words, the state’s plan is to hope the money is still there when the federal budget is approved.
“We are hopeful,” Rolfe said. “We understand that we’re in a very different environment, and that it’s not business as usual. I’m not sure what will happen the next couple of years in Washington, but we’re confident those funds will stay intact for the next year.”