January 11, 2018 11:33:16 AM
Thursday, Toyota and Mazda announced it would build at new assembly plant in Huntsville, Alabama.
What Mississippians should find interesting about this deal, aside from the fact that it is not locating in Mississippi, are the terms of the agreement.
Under the plan, Toyota and Mazda will invest $1.6 billion in the new plant, which will produce 4,000 jobs with an average salary of $50,000 per year. The state of Alabama will provide $370 million in tax incentives to support the project.
Compare that to Mississippi's most recent "win" in economic development recruitment. Two years ago, Mississippi landed an agreement with German-based manufacturer Continental Tires to build a new production facility in Clinton.
During Tuesday's State of the State address, Gov. Phil Bryant touted the new plant as the crowning achievement of the state's economic development efforts.
Under the terms of the agreement with Continental, the state and local governments will provide $600 million in tax incentives for the $1.4 billion plant, which is expected to employ 2,500 workers at an average salary of $40,000 per year.
You don't have to be an economist to determine which state made the better deal for its residents.
Mississippi will pay $230 million more in tax incentives for a plant that will invest $200,000 less and produce 1,500 fewer jobs at $10,000 less in salary per year.
Either Alabama made a sweet deal or Mississippi got skinned alive.
Or, perhaps, luring companies to Mississippi, with its deteriorating infrastructure, woefully underfunded public schools, ridiculous anti-LGBT law and embarrassing state flag is a much more difficult job, and thus, comes at a higher price.
Two years ago, when the state passed the largest corporate tax break in state history -- $280 million -- the legislators who pushed the break -- primarily Lt. Gov. Tate Reeves -- said the tax cuts would pay for themselves in new business and industry.
Really? When will that be, exactly?
It certainly didn't sweep Toyota and Mazda off their feet, as we see.
As Thursday's news should indicate, when the only thing a state has to offer are big, fat tax incentives, there will be far more losses than wins and those few wins will cost us an arm and a leg.
It is time for our state to learn from this experience. Unless and until, our legislators make meaningful progress on infrastructure and education and rids the state of the embarrassing flag and the pointless anti-LGBT law, the state is going to continue to be on the outside looking in when it comes to real economic development.
The main take-away?
You can't bribe your way to prosperity.