Mississippi taxpayers, both at the state and local levels, often provide rafts of incentives to lure new industry to a community and “create” jobs.
The Mississippi Development Authority has several infrastructure and job training grant programs and tax incentives that include rebates on income tax paid by employees. Counties can offer tax breaks on property taxes, which support local schools and other local government services.
Here are some of the more recent examples, with calculations on how much the incentives cost per job.
Krone
According to a story from Memphis TV station WREG, Mississippi taxpayers will be paying a heavy price in grants and tax incentives to get a German agricultural implement company to move its North American headquarters and 45 jobs across the state line from Memphis to Olive Branch.
Mississippi will provide a $7.3 million in property and inventory tax breaks, in addition to a $250,000 grant to relocate its equipment. Krone could also receive incentives that rebate some income taxes for its employees to the company, provided the workers are paid at least $37,521 annually.
That could add up to $675,000 annually over the next decade.
All of those incentives, if realized, could add up to $8,225,000 or about $182,777 per job.
Amazon
Amazon announced in December that it will be building a fulfillment center in Marshall County in north Mississippi. The 554,000-square-foot center will employ 850 with a $15 per hour minimum wage and these employees will pick, pack and ship household consumer goods to customers.
Mississippi taxpayers will provide a $2 million grant for construction assistance and a $4 million grant for road improvements, according to MDA spokeswoman Tammy Craft. Marshall County will provide about $6.3 million in assistance for road improvements and a property tax exemption.
All of those incentives, if realized, could add up to $12.3 million or about $14,470 per job.
Enviva
Enviva and Mississippi officials announced that the company — which makes wood pellets that fuel overseas power plants — will build a $140 million pellet mill and a $60 million loading terminal at the port in Pascagoula.
Enviva is expected to hire 90 employees in Lucedale, with 300 loggers and truckers possibly finding work supplying logs to the company.
Mississippi taxpayers will be providing $4 million in grant funds, with $1.4 million for a water well and a water tank, while the other $2.5 million is for other infrastructure needs and site working, according to Craft. George County will provide $13 million in property tax breaks over the next 10 years.
All of those incentives, if realized, could add up to $17 million or about $188,888 per job.
Counting the jobs of loggers and truckers not directly employed at the George County pellet mill, that figure shrinks to $43,589 per job.
Few items are more popular or numerous in the legislature than income or sales tax exemptions.
This year is no different. Numerous bills, introduced by both Democrats and Republicans, have been offered to exempt the sales tax on the retail sales of school supplies sometime between the last week of July and the first week of August. This will go along with the current sales tax holiday for clothing and footwear purchased in the last week of July.
There have been proposals for tax credits for child care expenses, for companies that hire ex-offenders, for grocers who purchase locally grown food or open supermarkets in “food deserts,” for certain hotel renovations, for businesses to open in certain corridors, for people who purchase certain homes in certain areas, for being a volunteer firefighter, for alternative fuel infrastructure, for being a “small town teacher,” for storm shelters, for ports and airport facilities, for locating a headquarters to this state, and the list goes on and on.
Notably, the House has already passed what is known as the “Mississippi Education Talent Recruitment Act,” the legislature’s response to “brain drain.” If enacted, recent graduates will be able to receive up to the full amount of their individual state income tax liability after they work in the state for five years.
At Mississippi Center for Public Policy, we want taxes to be as low as possible. But rather than limiting the Mississippi Education Talent Recruitment Act to someone who has graduated in the past two years, it should be available to everyone in the state and maybe we call it the “Mirror the Tennessee Income Tax Rate Act.”
Tennessee, of course, doesn’t charge an income tax. And they certainly don’t require you to own property, or complete additional hurdles, to receive a full credit as this proposal would. If you don’t own property, don’t own your own business, or you aren’t a teacher, you would only be eligible for a 50 percent rebate. Nor do you have to wait five years to receive the rebate in Tennessee. You just never pay income taxes.
It works well for the Volunteer State.
The intention of this tax exemption proposal is noble. The other examples range from good to silly, but the need for all these exemptions tells us one thing: Our current tax policies are not competitive. Therefore, we have to do something about it to attract (insert whatever you think the state should try to attract).
We have taken the approach that the only way to attract people is through individual incentives. Which, unfortunately, requires entrepreneurs to focus on favor-seeking in the legislature rather than on improving products and services and growing their business through market-based competition. Playing the game in such a manner gives the state more power and the ability to play favorites, essentially picking winners and losers, thus giving the consumers less power.
By following the lead of high-growth, low-tax states in the Southeast that have lower taxes, lighter licensure and regulatory burdens, and a smaller government, we will be able to offer opportunities for people regardless of their age or their industry.
The Huntington Ingalls shipyard in Pascagoula could be getting another handout from state taxpayers.
House Bill 983 would provide Huntington Ingalls Industries with $45 million from state bonds. The bill says the funds are for capital improvements, investments and upgrades for the shipyard.
The bill passed the full House and is now headed for the Senate.
This isn’t the first time legislators have borrowed money on the taxpayers’ credit card to fund improvements as the shipyard, as the state has borrowed $307 million for Ingalls improvements since 2004.
Last year, the legislature added $45 million to fund improvements at the shipyard to the “Christmas Tree” bond bill for various items.
Huntington Ingalls Industries received $45 million in 2017 from state taxpayers, $45 million in 2016, $20 million in 2015, $56 million in 2008, $56 million in 2005 and $40 million in 2004.
The company leases the land for its Pascagoula shipyard from the state and is exempt from property taxes. It is one of south Mississippi’s largest employers, with 11,000 workers.
Huntington Ingalls’ Pascagoula yard builds Arleigh Burke class destroyers, America class amphibious warfare ships, San Antonio class amphibious dock ships for the Navy and the Legend class national security cutter for the U.S. Coast Guard.
The yard is also competing to build the Navy’s next frigate and several new Coast Guard heavy icebreakers.
Ingalls also has a shipyard in Newport News, Virginia that builds Gerald Ford class aircraft carriers and Virginia class submarines. The company earned $8.2 billion in revenue in 2018 and was awarded $9.8 billion in new contracts in 2018, bringing the company’s total contract backlog to $23 billion.
Contract awards for Ingalls in the fourth quarter of 2018 included a $931 million contract for the construction of the 10th and 11th Legend class cutters and an $883 million contract for construction of an Arleigh Burke class destroyer. The yard also received a $1.4 billion contract for another San Antonio class ship.
Ingalls spent $202,400 on lobbying efforts at the Legislature in 2018. You can find the reports from the Secretary of State’s website here and here.
The Environmental Protection Agency isn’t just coming to your local power plant, they’re coming to you live on Mississippi Public Broadcasting.
Well, not exactly the EPA. Rural Voices Radio will be using a $25,954 grant given by the agency to the Mississippi Writing/Thinking Institute to produce programming related to the Gulf of Mexico.
What is Rural Voices Radio you ask?
A short format program undertaken by the Mississippi Writing/Thinking Institute at Mississippi State University, Rural Voices Radio works with both children and adults so that they can experience what it’s like to work in radio with participants generally sharing essays or poems about their life in Mississippi. In a statement the EPA said that the grant will provide “hands-on opportunities to help change behaviors of Gulf residents as ‘keepers of the Coast’ with vested interest in its protection.”
After the agency spent 12 years trying to understand what to do about the billions of gallons of raw sewage spilling into the Pearl River, the public need only to rejoice as taxpayer money is funding programs like Rural Voices Radio.
The grant serves as an excellent example of how the agency has conducted its business in recent years.
The pretext to the existence of the EPA has largely centered on the notion that the EPA serves as the sole defender of our nation’s environmental wellbeing. Therefore, all actions undertaken by the agency, regulatory or otherwise, serve to benefit the public good. While the agency may sometimes place restrictions on heavy polluters, the average American most likely won’t have much contact with the EPA, except when they’re drinking their clean water and breathing in high-quality air.
Repeated by both proponents of the agencies goals and bureaucrats inhabiting it, the “sole defender” notion has not proved itself indicative of reality. Companies of all sizes have demonstrated not only the ability to self-regulate but a desire to protect our environment. In short, market forces and the profit motive appear to be great motivators. Meanwhile, the EPA has deviated from its original mandate becoming increasingly fond of regulating the behavior of individuals rather than organizations. Simultaneously, the agency has demonstrated ineffectiveness when it is made to address a true crisis.
While the grant provided to the Mississippi Writing/Thinking Institute demonstrates wasteful spending by the government, it also represents an investment in which the only desired outcome is the alteration of individual behavior.
These actions, the earliest iterations of which are generally undertaken with noble intentions, seek to gratify the neo-puritanical desires of those who regulate, seeking to expand upon what they are permitted to regulate. Such activity creates a self-gratifying cycle, which further expands the scope of their bureaucracy.
It is fundamentally wrong to have taxpayer dollars be used to influence the content of any broadcast, let alone one which seeks to change the behavior of those who it is meant to reach. For too long the EPA has operated disconnected from the interests of those for which it was established to serve, wasting taxpayer money on projects unrelated to its mandate while failing to fulfill its most basic obligations.
It would be in the interest of all taxpayers to see grants such as the one provided to the Mississippi Writing/Thinking Institute end immediately and a system introduced in which the mandate of the EPA is transferred to state agencies to enforce and interpret as they see fit.
A bill that passed the Mississippi House could give a tax credit to recent college graduates who decide to work in the state for five years, but there are plenty of conditions.
House Bill 816— also known as the Mississippi Educational Talent Recruitment Act — would provide recent graduates (within two years) from a four-year university or a post-graduate program such as medical school who live and work in Mississippi a rebate equal to all or a portion of the amount of their state income tax liability.
It’s designed to combat the “brain drain” of young, college-age professionals from the state but the conditions to qualify for the credit are numerous.
Community college graduates aren’t covered by the rebate program. Also, someone wishing to participate would be required to apply for the credit with the Mississippi Department of Revenue, which would review the application and determine if the applicant is eligible.
Then they’d have to reside in the state for five years to receive a 50 percent rebate of their state income tax liability.
If they own property in the state (either residential or commercial), establish a business registered with the Secretary of State’s office or serve as a licensed teacher, they can receive a rebate equal to their full state income tax liability.
The bill is authored by state Rep. Trey Lamar (R-Senatobia) and passed the House on February 8 by a 111-2 margin.
According to data from the U.S. Census Bureau, the data is mixed. Estimates by the Census Bureau for 2017 indicate that the state has 389,103 adults between the ages of 25 to 34, with 88,496 possessing at least a four-year degree or better.
Among the ages 18 to 24 cohort, the bureau estimates the state has 303,818 residents in 2017, with 18,568 of them with at least a four-year degree.
In 2010, the state had 378,363 residents between the ages of 25 to 34, with 78,699 of them with at least a four-year degree. Among those ages 18 to 24, there were 307,897, with 15,394 with at least a bachelor’s degree.
The number of residents ages 18 to 24 decreased by 1.32 percent between 2010 and 2017, while those in the older range (ages 25 to 34) increased by 2.83 percent over the same time frame.
The state, as a whole, had its population decline by 3,000 residents between July 1, 2017 and June 30, 2018 and was the third time in four years the population has declined.
A similar bill, also authored by state Rep. Lamar, failed in the Senate last year.
Even in an election year, the Mississippi legislature is pondering tax increases.
There isn’t a gasoline tax increase bill that will survive the February 27 deadline for appropriation and revenue bills to be voted out of the originating chamber, but there are still other tax hikes on the table for cigarettes and hotel and restaurants.
Several cigarette tax hike bills are active in both chambers:
HB 1499 would increase the excise tax on non-cigarette tobacco products such as cigars and chewing tobacco from 15 percent to 22.5 percent, while HB 1500 would raise the per-pack cigarette tax rate from 68 cents to $1.18. Both are sponsored by state Rep. Bob Evans (D-Monticello).
Senate Bill 2665 would increase the per-pack tax to $2.18, which would be seven cents higher than the national average and much higher than surrounding states. It is sponsored by state Sen. Willie Simmons (D-Cleveland).
The cigarette tax hike bills most likely to pass are HB 1573, which is sponsored by state Rep. Jeff Smith (R-Columbus) and SB 2563, authored by state Sen. Brice Wiggins (R-Pascagoula). HB 1573 would increase the tax on a pack of cigarettes to $1.68, while SB 2563 would hike the per-pack levy to $2.18.
As for tourism taxes, there are several bills out there that would levy taxes on local hotels and restaurants to finance tourism-related projects.
In Mississippi, tourism taxes start as a local bill in the Legislature. These bills usually benefit a city or county in a legislator’s district and are one of the last chores the Legislature wraps up before leaving town at session’s end.
Once the local bill is passed, a referendum of local voters is required before the tax can go into effect. The tourism taxes usually have an expiration date of three years from passage. The money is collected by the business and sent to the Mississippi Department of Revenue, which then sends the proceeds back to the municipality or county that levied the tourism tax.
There are 90 of these taxes collected by the DOR on behalf of local governments in fiscal 2018, up from 59 in 2004. The DOR collected $98,275,512 from these levies in fiscal 2019.
One of the tourism tax bills, HB 653, is already sitting on the desk of Gov. Phil Bryant and it would resurrect a dead tourism tax for the city of Baldwyn, located between Tupelo and Booneville on U.S. 45.
The law would not only reauthorize the 2 percent tourism tax on restaurants and hotels for another three years, but also allow the city to retroactively collect the tax after it expired on July 1. A companion bill is SB 2277 and it was double-referred to the Senate Local and Private and Finance committees.
Despite notification from the state Department of Revenue, businesses in Baldwyn continued to collect the tax and have collected $13,765 from it so far this year. The city, which has a population of 3,304 according to the U.S. Census Bureau, will receive these proceeds despite the tax going off the books for a year.
HB 325 has already been signed into law by Gov. Bryant and is already in effect. The new law authorizes the city of Columbus and Lowndes County to levy a 2 percent tax on food and alcoholic beverages sold in restaurants with annual sales of $100,000 or more.
Of the proceeds, $400,000 will go to the city for parks and recreational activities, including maintenance and repair of facilities. Another $300,000 will go to the county for the same purpose and $250,000 will go to the Golden Triangle Development LINK, which will be used to fund promotion of community and economic development.
HB 1611 would reauthorize the city of Flowood’s 3 percent hotel tax and allow the fund to be used for construction of a conference center in the city. HB 1611 is in the hands of the House Local and Private Committee. SB 2988 is the companion bill in the Senate.
HB 1610 and HB 1602 would allow the city of Clarksdale to hit residents with a 14 mill property tax increase ($14 per every $1,000 of assessed value) to fund capital improvements in the city. The two bills are in the hands of the House Local and Private Committee.
HB 1601 would allow the city of Saltillo to levy a 2 percent tax on hotels and restaurants for tourism, economic development, infrastructure and parks and recreation. SB 2853 is the companion bill in the Senate. The city has a population of 4,987, according to the U.S. Census Bureau.
HB 1565 would give Starkville the authority to increase its existing hotel and restaurant tax by 1 percent to finance construction of a new sports complex and improve existing sports and recreation facilities.
HB 1423 would allow Lexington to impose a 2 percent tax on restaurants to fund recreation, tourism and parks. According to the Census Bureau, the city has a population of 1,523.
SB 2185 would authorize Carrollton to impose a 2 percent tax on restaurants to fund tourism and parks and recreation. Carrollton has an estimated population of 178, according to the Census Bureau.
SB 2896 would authorize North Carrollton to hit local restaurants with a 2 percent tax to fund improvements for tourism and parks and recreation. North Carrollton has an estimated population of 444, according to data from the Census Bureau.
SB 2854 would allow Charleston to levy a 2 percent tax on restaurants to fund tourism and parks and recreation projects. The city has an estimated population of 1,958.
For a third straight session, the Mississippi legislature won’t be addressing a technological gap in the privacy rights of its citizens.
The House Judiciary B Committee — chaired by state Rep. Angela Cockerham (D-Magnolia) — let a bill die on deadline on February 5 that would’ve required a warrant for cell site simulator devices that can represent an invasion of privacy by law enforcement.
House Bill 85 was authored by Rep. Steve Hopkins (R-Southaven) and would’ve provided an exception for the warrant requirement if it was necessary for law enforcement officials to use the cell site simulator device to prevent loss of life or injury.
These devices, also known as IMSI (international mobile subscriber identity) catchers, are used by law enforcement to spoof cell phone towers and trick any cell phone within range of connecting with them.
They were originally developed for use by the military and intelligence agencies such as the NSA, but have now migrated to federal law enforcement agencies such as the FBI and U.S. Department of Homeland Security and now to local law enforcement agencies.
“It goes against all the principles of a free society and the intent of the Founders when the Constitution was written,” Hopkins said. “We have a right to privacy and that’s why there should be laws protecting us from any warrantless wiretap.”
The way these devices work is simple.
Each cell phone has a 15-digit identifier known as an IMSI that they use to communicate with the cellular network. Phones are designed to connect to the strongest tower within range. The IMSI catcher, which is usually mounted in a surveillance vehicle, is designed to crowd out the other towers within range and force the mobile devices within its range (usually about a mile) to connect to it.
Law enforcement can sort through the troves of phones that connect to the cell site simulator and find a particular IMSI that they obtained from a service provider, either voluntarily or by a court order. When law enforcement finds the particular IMSI they are searching for, they can use the device to triangulate its location.
According to a report by the libertarian Cato Institute, these devices can detect where a live mobile phone is within six feet in some cases.
In addition to being able to locate and track the person in possession of a specific phone, these devices are also capable of obtaining their communications content including text messages and calls.
“It was brought to my attention by a resident and I had no idea that law enforcement had the ability to eavesdrop, more or less, without a warrant,” Hopkins said. “Human beings will give into temptation and who’s to say that someone has access to this that they’re not listening in to someone that they may have a vendetta against and use it incorrectly.”
Law enforcement isn’t the only user of the IMSI catchers, as the U.S. Department of Homeland Security admitted last April that it’s aware of unauthorized cell site simulators being used in various parts of Washington, D.C.
These are likely being used by foreign intelligence agencies to eavesdrop on government cellular traffic.
A similar bill last year also authored by Hopkins died in committee.
A widely-hailed economic development deal hatched in 2016 is no more.
A story by the Sun-Herald says that a $36 million deal to bring a shipyard and 1,000 jobs to Gulfport by Edison Chouest Offshore subsidiary TopShip has been dead since December.
The Mississippi Development Authority told the Sun-Herald that it failed to meet benchmarks for a $68 million investment and completed construction. TopShip proposed reducing its investment to $34 million and only 250 employees, but state officials refused to budge on the original requirements.
TopShip was supposed to receive $11 million in bond funds plus tax and other incentives that could’ve added up to $25 million to refurbish its facility on the Industrial Canal, which was formerly owned by Huntingdon Ingalls.
Chouest already had a shipyard right down the road from the new one.
According to the Sun-Herald story, Harrison County invested $12 million in Hurricane Katrina recovery funds to open the Gulf Ship yard in 2006. The week before the announcement in February 2016, Gulf Ship laid off workers and was down to only 110 employees, according to the Sun-Herald.
A statement from MDA said TopShip did not receive any state funds.
Analysis by the Institutes for Higher Education said that the project would generate a net positive annual return for Mississippi starting in 2017.
The Port of Gulfport received $567 million in Community Development Block Grant Disaster Recovery funds from the U.S. Department of Housing and Urban Development. This money for the “Port of the Future” was predicated on the port creating 1,300 jobs, with many of them supposed to go to low-income residents.
HUD allowed the port to consider 326 jobs at a casino hotel located on property owned by the port. According to the most recent status report issued by the port in 2017, the facility now has created 425 jobs verified by HUD.
Chouest did a similar shell game in Louisiana with incentives. In 2008, WVUE TV reported that Pelican State taxpayers invested $42 million for Chouest to build a shipyard in Houma and hire 1,000 employees.
The company closed a nearby shipyard that it also owned, the North American Fabricators Facility, and the state told WVUE TV that it simply transferred jobs from the old shipyard to the new one.
In August 2012, Louisiana officials amended the agreement to give Chouest more time to meet the job creation goals.
TopShip was known during the February 5, 2016 special session as “Project Crawfish” and was part of a $274 million incentive deal that also lured a Continental Tire plant to Hinds County.
The process to pass the bill in the special session only took five hours from bill drafting to Gov. Phil Bryant’s signature.
The state’s record on economic development incentives is filled with some successes, like Nissan, Toyota and Yokohama.
But for every success, there is the infamous beef plant in Yalobusha County, which cost the state more than $50 million in guaranteed loans, and biofuel producer KiOR, which owes the state more than $69 million on a no-interest loan.
Stion Solar owes the state $93 million after it shuttered its solar plant in Hattiesburg.
Many people are still wondering what the future holds in Oxford.
It’s been three months since Jeff Vitter announced he would leave his role as Chancellor of the University of Mississippi, leaving behind a legacy which could best be described as tattered.
A tenure marred by declining enrollment, the prohibition of the playing Dixie at football games, the removal of the state flag from university property, and NCAA sanctions could leave little to the imagination as to why people seemed to always be asking, “What’s going on at Ole Miss?”
In Vitter’s departure, both conservative and progressive students who were displeased with his leadership rejoiced in the notion that the university could restore its stature. Yet to date nothing has changed.
Larry Sparks, who took over as Chancellor following Vitter’s resignation, has indicated that the extent of his interest in the role extends only to keeping the seat warm for whomever the Institutions for Higher Learning selects. But it still remains unclear as to who that may be.
The question Ole Miss grapples in the selection of its leadership is one which has consistently been asked throughout all actions undertaken by the university: What exactly is Ole Miss and what does it want to become?
If you were to ask students and alumni, the vast majority would say they treasure Ole Miss as a bastion of southern heritage and tradition, seeking its preservation for future generations to enjoy. However, if you were to ask university faculty that sentiment would rarely be echoed, if at all. It is this disconnect which has led Ole Miss to where it finds itself today.
A faculty comprised of out-of-state academics which insist it undertake self-flagellation in repentance for existing in a place which high minded costal liberals deem reprehensible cannot coexist with the interests of those the university is meant to serve. It is with this knowledge that Vitter built the legacy which would eventually destroy him, acting to intentionally subvert democracy under the pretext that any change presented with indignation is inherently good.
The nature of all organizations is that those who are held responsible for its decisions are held responsible for its culture. When the organization is one which has a mission to serve, the culture should exist in service of the values and interests of its constituents.
For Ole Miss to find a chancellor who can properly serve the community is one who can understand a clear definition of Ole Miss and remain committed to its values. The next leader doesn’t necessarily have to be from Mississippi, but he or she definitely can’t be against Mississippi and expect to lead successfully.
Ole Miss finds itself at a moment of definition where it may move beyond its fatigue and capitalize on its potential as a university to attract and retain world class talent to Mississippi.
The last two Chancellors at Ole Miss have left much to be desired before an early departure from their roles. All eyes will be on the next leader, because a large contingent of the Ole Miss faithful know the school is on very thin ice today.