Barbour: Pass Momentum Mississippi now
Published: June 27,2005
Jackson — On June 28, the Mississippi Legislature will once again convene for a special session called by Gov. Haley Barbour, this time to pass a bill for economic development incentives in his Momentum Mississippi plan.
The legislation failed during this year’s regular and first special sessions, but Barbour is adamant about signing a bill soon that would help Mississippi recruit and expand industry and jobs in the state.
Last week, the Mississippi Business Journal talked to the first-term Republican about why this legislation is so pressing.
Mississippi Business Journal: Refresh our readers about the connection between Blueprint Mississippi and Momentum Mississippi.
Haley Barbour: Blueprint Mississippi, which began before I was governor, was a project of our business community and our universities about how to improve the business climate in Mississippi, to maximize the chances of better and higher paying jobs for Mississippians. The first recommendation was to fully utilize the 1987 act, which I did within the week of Blueprint’s announcement, and we created the board that supervises our effort to use the 1987 act to improve the economic climate in our state, and that is the Momentum Mississippi board. Momentum Mississippi is actually the first piece of legislation put forward by the organization.
MBJ: Why is passage of the bill so critical right now?
HB: The first reason we need to pass Momentum Mississippi now, not in six or nine months, is because it realigns our economic incentives to make eligible the businesses that are creating most of the jobs in America, such as technology, research and development, distribution and financial services, many of which are not eligible for our incentives today. This results from the fact that most of these incentives were developed back when economic development meant manufacturing. Right now, because other states have already made realignments and adjustments, we often find ourselves competing with one hand tied behind our back because we have some outstanding businesses that are ineligible because the law has never been expanded and reconciled to the job makers of the new economy.
The second big reason Momentum Mississippi needs to be passed now is that our economic incentive funds are depleted. There are five categories of funds that the Mississippi Development Authority can consider using for job creation projects, and four of them have no money. Two of them have committed all the money they have, and two others are already out of money, so no new projects can be considered. One of these funds is called DIP for Developmental Infrastructure Project. The state has 84 projects that have been submitted for consideration for DIP funding and we have no money to fund any of them, so we’re just sitting on the sidelines.
History shows us this is a great program for bringing private investment to Mississippi and creating jobs for Mississippians. For example, in the last 10 years, Mississippi has invested $19 million of taxpayer money in DIP projects. That includes 134 projects in 57 of 82 counties. This money generated $336 million in private investment and created more than 11,400 jobs.
MBJ: We know about the state having promised financial incentives to Baxter Healthcare and Northrop Grumman. What are some other businesses that could benefit from Momentum Mississippi?
HB: Most are smaller projects, creating 50 to 200 jobs. Some people think Momentum Mississippi is about big mega-projects such as the SteelCorrs or Northrop Grummans. It’s not. We’ve had projects in 57 counties, but there’s never been one in Hinds County or Rankin County or Vicksburg, and only one in 10 years in Meridian. These are the monies we use to fund projects in mid- and smaller-size counties.
BearingPoint, which will employ 275 people averaging $42,000 a year in Hattiesburg, was funded from one of these funds. Most companies don’t get more than $150,000 to $200,000, but we put them together with other things.
MBJ: How does Momentum Mississippi address the sources for new jobs from various entities?
HB: Our programs over the years have been designed for attracting new businesses out of state or helping Mississippi get new business started here. Typically, existing business support has been harder to work through under our law. If it’s a big project, like Howard Industries, the Legislature passes that. That’s why one of the provisions of Momentum Mississippi is to create a new fund just for existing businesses, which will make us more able to help existing businesses, which is where most jobs come from.
MBJ: Some people argue that economic development incentives provided by the government may not be such a good deal for taxpayers. Why do you see Momentum Mississippi as the right approach for the state?
HB: I’m not going to critique what’s been done in the past. But I’ll talk about some of the things we’ve done lately. FedEx in Olive Branch is a $58-million project. The state’s putting up $2 million, the county’s putting up $1 million, FedEx is putting up $55 million, and the project will employ 600 people. Of SteelCorr’s direct investment, the state is putting in about 3%, or $25 million, of more than $700 million.
MBJ: In the last special session, House Speaker Billy McCoy defended adding more projects to Momentum Mississippi as a legitimate move by representatives to be involved in economic development projects in their districts. If necessary, are you willing to consider these projects as part of the Momentum Mississippi bill or do you still insist on considering them only after passage of the bill?
HB: The call will be to consider Momentum Mississippi, and then after it’s adopted, I favor, assuming the House and Senate want to do it, expanding the call to consider bond projects. We have a couple of projects, like Northrop Grumman and Baxter Healthcare, where the Legislature has already committed to do certain things. I think we have to honor our commitments.
The House and Senate have other bond projects that they want considered, and both have every right to be involved in economic development, but the constitution is very clear about special sessions. It says the governor alone may call a special session, and will set the matters to be considered. It goes on to say that the Legislature has no authority to expand that agenda. The writers of the constitution understood that the governor’s call should not be expanded on because they understood what would happen if you allowed that. Some legislators would recognize it as an opportunity to make it a Christmas tree.
However, I’m willing, once we adopt Momentum Mississippi, to expand the call. I made that plain the whole time. Now what I’m not willing to do is have the taxpayers of Mississippi see their money spent on projects that haven’t been thoroughly reviewed and are subject to appropriate due diligence.
The House, during the last special session, came forward with 35 proposals for bond authorization, many of which nobody had ever heard of. The Brookhaven newspaper noted that one of the projects was to build an amphitheater in Brookhaven. They asked the mayor and he said he’d never heard of it. It’d never been discussed in a city council meeting — ever. Nobody knows the costs or benefits. But one of the aldermen had mentioned it to a legislator.
When you look at these projects, a lot of them are not appropriate for bonding. I mean, to repair the sidewalks in Bogue Chitto with state taxpayer funded bonds? To teach financial literacy to high school students through Junior Achievement? $250,000 in bonds for beaver control? These are all literally in the House bill. Others look like worthwhile projects, and the federal government is willing to pay for several of them. Many are eligible for funding in other ways than issuing bonds that have to be paid off over 15, 20 or 30 years, with all the additional costs that entails.
I signed the bill to pay off the Mississippi Beef Processors, which was something that was never professionally reviewed. We can’t do that anymore.
MBJ: What’s the latest you’ve heard from Baxter Healthcare and Northrop Grumman if funding is not forthcoming?
HB: There was a quote in a local newspaper from Baxter saying their board would meet next month and had to approve the plans for the plant in Cleveland. This person expressed concern that if the bonds were not authorized by then, the project would fall through. I don’t know if that’s accurate or not.
Last year, Northrop’s board met late in the year to approve this year’s budget, and I assume that will be the case again.
Either way, last year the Legislature said it would issue other bonds for Northrop Grumman and Baxter Healthcare and we need to honor our commitments.
Contact MBJ contributing writer Lynne W. Jeter at email@example.com.
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