New deal sets expensive precedent
It was heralded as “the single biggest day of economic development in the history of the state.”
Gov. Phil Bryant called it an “historic day for economic development.”
Mississippi lawmakers on Thursday approved hundreds of millions of dollars of state money and incentives for a tire plant in western Hinds County and a shipyard in Gulfport, the Associated Press reported.
German tire and auto-parts maker Continental AG will invest $1.45 billion in a plant that one lawmaker called the largest tire plant in North America. It will eventually hire up to 2,500 people, said Mississippi Development Authority Director Glenn McCullough, AP reported.
Louisiana-based Edison Chouest will invest $68 million to expand its presence in Gulfport at the Topship shipyard, hiring up to 1,000 workers, according to AP. The company makes oilfield service vessels.
If Bryant signs the deal into law, Mississippi will borrow $263 million to buy, clear and grade 900 acres of land for Continental, as well as contribute to building a 5 million square-foot plant. It would also build a new interchange off I-20. Hinds County would repay $20 million of those bonds, according to AP.
The state will also grant breaks on income and franchise tax, as well as return 3.5 percentage points of income tax collections from workers to the company over 25 years. The franchise tax cap and the income tax rebate could each be worth more than $75 million over that time. Hinds County and the Clinton school district would also waive two-thirds of property taxes for 10 years, AP reported.
All told, there are hundreds of millions being used to lure the companies, which are, let’s not forget, private industries seeking to make a profit. Is it the government’s role to boost the balance sheets of private companies?
“Is there any amount of money we will not pay someone to come and put something in Mississippi?” asked Sen. Hob Bryan, D-Amory. Bryan voted for the bill, as did our local representatives.
State lawmakers may be right on this one. It may go down in history as the biggest economic development achievement in state history. We certainly hope so.
But the Legislature has set an expensive precedent when it comes to handing over tax dollars to bring industry to our state. It’s hard to imagine the next big company seeking less than what Continental and Edison Chouest will receive.