State needs to consider risks before taking them
Mississippi has a mixed record when it comes to economic development projects. The failures that make headlines most often tend to be “green” industries — solar, renewable, bio, etc.
Just recently the state announced it may sue a solar panel maker that announced it would be closing. Stion, a San Jose, California company, notified the Mississippi Department of Employment Security last week that it plans to close its plant, laying off 137 employees.
A company spokesman said Stion owes the state $74.8 million. Though the company is trying to sell the factory, bankruptcy remains a possibility.
Stion originally promised 1,000 jobs but never got close to hiring that many.
Other green industries have struggled as well. KiOR, which planned to turn trees into fuel, closed its Columbus plant after failing to produce fuel at a commercial scale. The state lost $77 million when it shut the doors.
Another company, GreenTech, planned to build autos at a plant in Tunica. It had promised to hire 350 full-time workers but never did. The company received $4.9 million in state and local aid.
Another green industry company, Twin Creeks, cost the state $8 million when it failed.
State officials should consider those failures as it embarks on new projects. Just last week, a British company announced that it aims to build a refinery in Adams County that will turn wood into diesel or jet fuel.
Velocys plans 40 refinery jobs paying an average of $100,000 yearly, and could indirectly support another 100 forestry jobs paying $40,000 on average. The company says Adams County has offered it tax incentives worth $42 million, and says it could get $15 million in state tax breaks. The county has also offered $4 million in land and upgrades.
That’s an expensive gamble for sure. Economic development is often a game of “who can provide the most incentives” but those who win the game are sometimes left with nothing to show for it but an IOU. In the end it’s taxpayers who lose when these economic development gambles fail.
We encourage state, city and county officials to carefully consider taxpayers and the risk inherent with these types of incentives before risking more public money.