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Implications

Local politicos unlikely to suffer from plant involvement

With an indictment in the beef plant fraud case putting that state-funded failure back in the limelight, observers may wonder about political fallout from officials who pushed the project. The project’s support by legislators and state agency heads has been fodder for newspaper cartoonists and radio personalities around the state.

But in the area of North Mississippi that was to benefit from the ill-fated economic development project, there may be more understanding afforded these elected officials, according to one veteran political observer.

“The political implications are probably not what people outside North Mississippi think they are,” said Dr. Marty Wiseman, director of the Stennis Institute of Government at Mississippi State University. “Their intent was to balance jobs and development with what was happening in other parts of the state.”

He feels that people who support North Mississippi legislators think the intentions were good and the project just didn’t work out. “I don’t think they’ll hold local politicians responsible,” he said. “The closer you get to the districts, people understand what they were trying to do.”

Still, Wiseman says “remember the beef plant” will be a rallying cry for more careful scrutiny of state-backed projects for a long time. “The state may save money in the long run because of the beef plant debacle,” he said. “I think we may see the industrial equivalent of earnest money from someone coming into the state with a project. We need to learn to be very careful how we spend the state’s money.”

Return of sectionalism?

Wiseman, who teaches political science and public administration, sees a return to sectionalism in the state.

“It was pushed under the surface but never went away,” he said. “We’re seeing a return of it now. As the state was increasingly getting involved with Howard Industries, Northrop Grumman and Nissan, the Delta and North Mississippi legislators wanted to turn the spotlight on their parts of the state with economic development.”

He feels it might be a healthy thing to create jobs and enhance the state’s image around the world with economic development. “Is it the role of government to make money on every occasion? Is that a good investment for government?” he ponders. “Some say Nissan wasn’t a good thing, but they fail to factor in the image thing as we position Mississippi as part of the automotive industry.”

Long term: trained workforce

However, there is a different viewpoint of Mississippi joining the automotive industry at this time. “Trying to get into automotives at this time is not good as automobile manufacturers cut back and the price of gasoline rises,” says Dr. William F. Shughart II, a professor of economics for 17 years at the University of Mississippi. “We should invest in training and education for the long term.”

Shughart says many of the state’s economic development efforts are ill-fated because they fail to recognize that industry is looking for a trained work force, rather than industrial parks and other incentives. “We’ve ignored that. It’s long term and not something we can do overnight. It may take a generation,” he said. “For any politician, that’s too long because they won’t be in office that long.”

He says years ago state leaders attempted to get the state off the bottom of the economic ladder by offering cheap labor to industry in the attempt to balance industry with agriculture. “We started this silly race to the bottom by offering cheap labor to get industry to come here,” he said. “It was cheap because the labor force didn’t have many skills. Now that is no longer viable and we can’t compete.”

What about Wellspring?

Nor is Shughart an advocate of industrial parks, such as the Wellspring project in Northeast Mississippi, or of tax breaks to attract industry.

There are 300 industrial parks in the state with 150 of those located within a 16-county area of Northeast Mississippi.

“Why do we need another one? A well-trained work force is the biggest draw for industry,” he says. “Companies looking to relocate want access to customers, access to suppliers and access to a trained work force. The only way industrial parks and tax breaks or credits makes a difference is if an industry has two equally desirable locations. Then it might make a difference.”

He’s critical of local entities with a “build it and they will come” attitude regarding industrial parks. “How does the Lee County Board of Supervisors know how an automobile plant wants their site configured? A plant doesn’t need the trees mowed down or a power line laid to locate in an area,” he says. “They opened Turner Industrial Park in 1980 and it’s been vacant. Now they’re committing to spend more money to give it a facelift and they have no tenants.”

Shughart says that sort of thing is a chronic problem as local bankers and developers have built industrial parks willy-nilly around the state. He adds that taxes are pretty much the same everywhere and won’t make or break a deal. “Tax breaks have not paid off and we haven’t learned anything,” he said. “We must do something about education and stop wasting money on economic developers chasing smoke stacks. In this age of technology, firms can locate anywhere and they have to have a good reason to come to Mississippi.”

Doing it right

Dr. Bill Gunther, an economics professor at the University of Southern Mississippi for 38 years, says economic incentives are deeply ingrained and not likely to vanish.

“Politics is very strong. Politicians control incentives and they don’t like to give up anything,” he said. “Very few states do this right, meaning they do not allocate incentives in such a way that maximize returns to the state.”

As an economist, he feels it’s not the role of the state to be involved in economic development because it’s rarely successful. Even if the beef plant had succeeded, he says it was a bad investment for the state.

“It was not good common sense. I don’t know who’s to blame but I just know it was a fiasco,” he said. “I don’t know what the process was, but if they say it was for economic benefits, they’re economical illiterates.”

Rep. Steve Holland and Rep. Tommy Reynolds, two proponents of the beef plant project, were contacted by the Mississippi Business Journal but did not return calls by press time.

Contact MBJ contributing Lynn Lofton at llofton656@aol.com.

About Lynn Lofton

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