Momentum, at last

by

Published: July 11,2005

The thunderstorms that rumbled throughout Central Mississippi on the state’s last fiscal day of the year provided a fitting backdrop for the passage of Momentum Mississippi legislation.

After much pushing and prodding, Gov. Haley Barbour breathed a sigh of relief June 30 when House Speaker Billy McCoy (D-Rienzi) finally handed the Senate the House-passed legislation approving a $28-million plan in bonds for four Momentum Mississippi programs and a $12-million grant/loan program for at-risk industries.

“I am pleased that Momentum Mississippi, our essential economic development initiative, has been approved intact by the Legislature,” said Barbour. “I want to thank the House and Senate for their bipartisan support, and I also appreciate their focus on helping existing business by adding $12 million to Momentum’s proposals in that area.”

Mississippi Development Authority (MDA) deputy director and COO Gray Swoope said the MDA team “is already on the phone communicating with company representatives the advantages of our new incentives. Now that we have the tools in place, the future for economic development is very promising. We are hopeful to see results within weeks.”

After McCoy and other House members took heat for the failed Oakland beef processing plant dubbed “cattle-gate,” which Barbour called “a bad attempt at economic development” and cost the state $35 million to retire the debt, the House stipulated in the bill the creation of a legislative oversight committee to advise MDA and requires the state’s economic development arm to provide regular reports about project developments to the Mississippi Secretary of State.

“We are very pleased and grateful the Legislature has expressed their confidence in MDA and have given us the tools and resources that business, education and community leaders requested,” said Swoope. “We will continue to work hard to earn that trust and help improve Mississippians’ economic well-being.”

Anthony Topazi, chairman of the Mississippi Momentum group, said the Mississippi Legislature’s passage of the legislation “sends a positive signal that will be heard across the South — that Mississippi is open for business thanks to the hard work of the House, Senate and governor.”

Nuts and bolts

House Bill 3 provides $7 million each for the ACE Grant, Development Infrastructure, and R&D/High Technology Loan programs, and $6 million for the Existing Industry Loan Program.

“We participated in grass-roots meetings urging the state to prioritize programs for existing industries,” said Mark Jackson, plant manager of Baxter Healthcare in Cleveland. “For so long, the state has had programs focused on trying to recruit new industry, but we’ll always be able to drive more organic growth from existing businesses.”

Jim Flanagan, president of the Mississippi Economic Development Council, said a countless number of economic development professionals promoted the incentive package, which “will go a long way toward retaining and enhancing our existing companies.”

For the last several years, Baxter Healthcare has been developing a new product line that company executives were considering manufacturing at the Mississippi plant.

“We committed to retool current product lines in this facility with the state’s help rather than look at other locations,” he said. “With the state’s assistance, we were able to say, the best location to do this is obviously in Cleveland.”

Tortoise and hare

If state lawmakers had not passed Momentum Mississippi legislation, it would have been a strike against Barbour, who poured untold energy into its passage. The bill passed the Senate in less than two hours of the third special session, which began June 28. Two days later, strains of frustration were evident among business leaders when House members had still not been allowed to vote on a full bill.

“The Senate sent an early signal that set the tone for this session, that we must have a full and comprehensive Momentum Mississippi package if we are to give our local economic developers the tools to compete in attracting new industry and helping existing industry,” said Topazi. “The Senate’s early and overwhelming support sent a very strong signal that Momentum Mississippi was a critical issue for the future of this state.”

After the bill was approved 116-to-1 by the House, and accepted by the Senate, Barbour immediately expanded the special session agenda to include $72.4 million in bond projects, including $56 million for Northrop Grumman shipyards in Pascagoula.

“This action demonstrates the extraordinary commitment by Mississippi’s lawmakers and citizens to the importance of shipbuilding in our nation and Northrop Grumman’s significant contribution to the economy of Mississippi and its long-term industrial stability,” said Bill Glenn, a spokesman for Northrop Grumman Ships System. “This investment will support greater efficiencies in ship construction and ensure that the state’s largest employer, Northrop Grumman Ship Systems, maintains its competitive position in the industry. Their visionary planning will serve our employees — and the communities they call home — for decades to come.”

Rep. Bobby Moak (D-Bogue Chitto), added a provision prohibiting companies that hire illegal aliens from receiving benefits from the Mississippi Momentum plan. House Ways and Means Chairman Percy Watson (D-Hattiesburg) sought assurance that MDA would equally distribute economic development funds over the state’s four congressional districts.

“We are very pleased that the Momentum Mississippi legislation has passed the House and the Senate,” said John McCullouch, president of BellSouth-Mississippi and a Mississippi Momentum group leader. “This action sends a positive message about the improvement in Mississippi’s business climate and our desire to attract new, higher-paying jobs for all of our citizens. This legislation has the potential to help address the challenges and opportunities of every region in the state and to improve the quality of life for everyone. It should also give a boost to the image of Mississippi when compared with other southeastern states.”

Momentum Mississippi legislation had strong support from the business community, pointed out Mississippi Economic Council (MEC) president Blake Wilson, making it difficult for state representatives to ignore the governor’s plan.

“Literally thousands of MEC members participated in the Blueprint Mississippi process that created the foundational research for Momentum Mississippi,” he said. “Blueprint Mississippi could have been another study on the shelf, but Gov. Barbour’s adoption of Blueprint and incorporation of the recommendations as the foundation for the Momentum Mississippi initiative, provides a strategic long-term approach for assuring the economic success of our state. The hard work of the House, Senate and governor that culminated in the passage of the Momentum Mississippi package shows that government in our state cares about the future of business and the strength of our economy.”

Raising the stakes

“There’s a big national discussion, particularly at the economic development practitioner level, on the magnitude and importance of incentives,” said Pete Walley, director of long-range economic development and planning at the University Research Center, a division of the Institutions of Higher Learning. “I think that’s really going to intensify over the next few years because the stakes have gotten so high that it’s making ordinary citizens ask the question, ‘What’s going on here?’”

In the short run, passing additional incentives to lure new business and assist existing industry was necessary to remain competitive in the global economy, said Walley.

“We’re having to go out on these big incentives just to stay in the game,” he said. “For that reason, we need to keep doing it, but that doesn’t mean it has to be our only response to the global economy. We need to ask ourselves what else we are going to do to try to make our state more competitive. To me, that’s where we’re weak. We’re not thinking above and beyond, about what else we need to do to increase the capacity of our economy.”

Contact MBJ contributing writer Lynne W. Jeter at lwjeter@yahoo.com.

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