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Official: Automotive support manufacturers looking at Starkville

February 14th, 2012 No comments

Oktibbeha County Economic Development Authority President Jon Maynard said at a meeting of that organization Monday that two manufacturers with ties to the automotive industry have started kicking the tires on possible sites in the Starkville area.

According to a story on the Starkville Daily News‘ website, Maynard declined to name the companies, citing confidentiality agreements. Starkville is almost exactly halfway between Canton and Blue Springs, and would make a good geographical match for a company that wanted to do business with Nissan and Toyota. Four-lane highways connect the three cities, so this will certainly be something to keep an eye on.

Maynard also updated the progress on a few other projects that have been simmering for a while in Starkville, including the mixed-use CottonMill Marketplace. The SDN has it covered here.

Beer law reform picks up powerful GOP bill author

February 8th, 2012 No comments

In this week’s MBJ I had a story about the beer legislation that has tried and failed the past few legislative sessions. You can read all about it here  (subscriber link).

Bills that would raise the state’s alcohol-by-weight content from 5 percent (lowest in the U.S.) to 8 percent have died in committee at least the last two sessions, as have bills that would allow the state’s only brewery to offer samples of its product to those taking tours of its facility. Bills that would have legalized homebrewing and allowed a brewery to brew illegal beer as long as it’s shipped and sold out of state have also perished. (It’s worth noting that the fact homebrewing is illegal has done nothing to stunt its popularity here).

After my deadline last week, though, came a bill in the Senate authored by Senate President Pro-Tem Terry Brown, R-Columbus, that would legalize homebrewing. Like Rep. Jessica Upshaw, R-Diamondhead, who has introduced beer legislation in the House, Brown’s filing a similar bill is significant.

Because while the bills have enjoyed a modicum of bipartisan support in the past, I can’t remember the GOP jumping on the bill-filing train before now. They may have; I just haven’t confirmed as much. Democrats have traditionally filed and supported the bills the loudest. The committees the bills died in were split among which party controlled them. The GOP now controls the House committee (Ways and Means) and the Senate committee (Finance) in which these bills currently sit.

And that was the gist of this week’s story: Longtime supporters of the beer agenda are more optimistic the legislation’s chances of passage are greater this time, if only because it’s likely lawmakers won’t have to face re-election in November. They may have to if the redistricting process gets squirrely, but it’s unlikely. Election-year politics killed the bills before they were even filed last year.

While it would legalize homebrewing, Brown’s bill does have some limits on the amount one household can brew per year: If there’s only one person over the age of 21 years residing in a single household, that house can brew no more than 100 gallons of beer annually. If there are two or more folks over 21 in one house, that limit rises to 200 gallons per year. The bill would outlaw homebrew being sold, but it would allow it to be exhibited at competitions, tastings, county fairs, etc.

Behind Lt. Gov. Tate Reeves, Brown is the Senate’s second-most powerful member. So it’s not insignificant that he’s filed this legislation. Upshaw and other Republican supporters of the beer bills have made it into an economic issue by tying it to tourism. How beer legislation in both chambers is handled in committee will be interesting.

MSU: Consumer confidence jumps 10 percent in 4Q of 2011

February 7th, 2012 No comments

From the third quarter to the fourth quarter of 2011, Mississippians’ consumer confidence jumped 10 percent.

That’s what jumped out of the latest edition of “Economy Watch,” a survey published by Mississippi State’s College of Business. The college conducted, it says, more than 500 phone surveys to arrive at its conclusion.

The findings echo what state economist Dr. Darrin Webb told lawmakers recently: that the state’s economy improved the last quarter of 2011, but the overall pace of recovery would likely slow to a crawl this year. Getting back to pre-recession levels of employment is going to take another few years, Webb said.

The Mississippi Index of Consumer Sentiment, “Economy Watch” tell us, is made up of two factors: how folks feel about current economic conditions and how they think future conditions will go. The reading at the end of 2011, 89.2, is the highest since 2007. The college considers a MICS reading of 90 to be the benchmark of a healthy economy.

To see the entire survey results, click here.

Bradley Arant to host UT professor for entrepreneurial seminar

February 1st, 2012 1 comment

A faculty member of the University of Texas’ MBA program who has started or financed more than 40 companies will hold a two-day entrepreneur accelerator seminar next week at Jackson lawfirm Bradley Arant Boult Cummings.

Rob Adams, author of two books, will be in Jackson Feb. 9 and 10. Cost to attend the event is $195 for both days, and will only cover Adams’ fee, according to an email from David Pharr, a partner at BABC.  Adams will explore topics related to getting a venture-backed company off the ground — including unit economics, customer acquisition costs, developing a profitable product or service and the common failures of start-ups.

For questions or to RSVP, email rsvp@babc.com or call Wendy Mullins at 601-592-9937. Seats are limited. For complete details, click on the image.

Relocation tax credit among business law reform bills

January 29th, 2012 No comments

One piece of legislation Secretary of State has included in his business law reforms package aims to make Mississippi more competitive with its northerly neighbor in attracting corporate headquarters.

It had not been filed as of Wednesday of last week. What the bill would do is offer companies that move their headquarters to Mississippi a tax credit equal to 50 percent of the relocation costs.

Hosemann said in early January that Tennessee offers a similar tax credit, and it puts that state ahead of Mississippi in the race to attract new industry.

Recent hotbeds of economic development – Tupelo, North Mississippi near Memphis, Jackson and the Golden Triangle – fare well on other factors companies consider when searching for potential headquarters sites.

“We were ok on our cost of labor, access to affordable energy, water, transportation,” Hosemann said. “We fit very nicely. What we didn’t have was a relocation tax credit, something Tennessee does have.”

Based on the research of a committee Hosemann formed to study the issue, Hosemann said Tennessee has been able to attract between 20 and 30 corporate headquarters since the program was instituted. Tennessee’s law offers an expense credit ranging from $10,000 to $100,000 per job created by a corporate headquarters’ arrival. Mississippi’s law only allows for a five-year tax credit that maxes out at $2,000 per new position, provided the company creates a minimum of 35 new jobs within a year of its relocation. If amended, Mississippi’s law would become most similar to Indiana’s.

Several lawmakers contacted by the Mississippi Business Journal would not comment on the proposal since the bill had not yet been filed.

“In some instances, it cost as much as $100,000 for a headquarters to leave St. Louis, for example, and move their employees here,” Hosemann said.

The credit would only apply to companies that move their corporate headquarters here. Expanding an existing facility or building a new one would not trigger eligibility.

The credit would also apply to companies whose corporate headquarters are already in Mississippi, and that buy another company and move it headquarters here. Transactions of that nature have increased as the economy begins its snails-pace recovery from the recession; they have been especially prevalent within the banking industry.

“The best companies we can get are the ones we already have here,” Hosemann said.

Bill proposing incremental judicial pay raises will be filed next week

January 24th, 2012 No comments

Mississippi Supreme Court Chief Justice Bill Waller told a meeting of the Capital Area Bar Association Tuesday that legislation to implement pay raises for trial and appellate judges will be introduced this session, probably sometime next week.

It’s the second session in a row the legislation has arrived at the Capitol. It died last year. Judges haven’t received a raise since 2003.

The measure has already gained the endorsement of a handful of major business groups, including the Mississippi Economic Council and the Gulf Coast Business Council.

Its intent is to get Mississippi judges off the bottom of the pay scale. According to the National Center for State Courts, the southeastern average for trial judge pay is $138,901. In Mississippi, trial judges are paid $104,170. Mississippi Court of Appeals judges are paid $105,050 annually; state Supreme Court judges earn $112,530. Trial and appellate court judges in Alabama, Louisiana and Tennessee earn salaries that average about 30 percent more than that. Alabama tops that list, with its supreme court judges pulling in $180,839, and trial judges making $158,134.

Like it would have last year, the legislation will raise judicial salaries incrementally, starting Jan. 1, 2013, and ending on that same date in 2016. By then, associate justices on the Supreme Court would make $152,250 (up from $112,530 now). Circuit and chancery judges salaries would increase from $104,170 now, to $136,000. The bill would also require the State Personnel Board to review judicial salaries on Nov. 1, 2017, and every four years after that. The Legislature, starting in 2019, would set judicial salaries based on the recommendations of the State Personnel Board.

Increases in civil filing and appellate court docket fees would fund the raises. Civil filing fees in circuit court are currently $121. In chancery court, they’re $108. Each would increase $40. Docket fees for the Mississippi Supreme Court would double, from $100 to $200. Under that format, no money from the state’s general fund would be used.

Former ninth district circuit judge Frank Vollor joined Waller on the panel, and said he left the bench after 20 years strictly for economic reasons. He is now in private practice.

“We expect a lot out of our judges, and we need to pay them adequately,” he said.

Debate during the 2011 session included the concern some lawmakers had over the constitutionality of the bill. The state’s Constitution prohibits changes in pay for judges during their terms. Waller said that could be circumvented by giving judges additional duties. This legislation will do that, he said, by requiring members of the Supreme Court and chancery and circuit judges to promote judicial education in schools, drug courts, electronic filing and management systems developed by the Mississippi Administrative Office of Courts.

As chief justice, Waller’s pay is not tied to the section of the Constitution that prohibits changes in pay during judicial terms. The same goes for goes for members of the Court of Appeals.

“This is a small step toward capturing judicial independence,” Waller told the crowd at the Capital Club. “If we don’t capture (revenue generated by filing fees), somebody else will, and it probably won’t be the judiciary.”

Waller said in an interview after the presentation that he expects some opposition at the Capitol, but hopes the fact that user fees would fund the raises would be enough to get it to Gov. Phil Bryant’s desk.

House Judiciary A Chairman Rep. Mark Baker, R-Brandon, has already indicated he supports it. Baker’s counterpart in the Senate, Vicksburg Republican Briggs Hopson, has done the same.

“These are hard times, and I understand that,” Waller told reporters. “There’s a lot of needs. In recognition of that, we’ve chosen a funding model that won’t impact the general fund. We think that’s the fairest way to go about it.”

PID legislation seeks to curb defaults

January 22nd, 2012 No comments

The good and the bad of the public improvement district movement in Mississippi can be found in Madison County, right next to each other.

Ridgeland’s Colony Park PID has flourished, anchored by Renaissance at Colony Park and its retail and housing units that have turned the Highland Colony Park area into one of Metro Jackson’s most successful. It’s adding amenities. Officials broke ground last fall on bike trails and walking paths paid for by transportation enhancement funds from the Mississippi Department of Transportation.

Just to the north of Colony Park, winding from Madison to Gluckstadt, Parkway-East PID represents the inherent financial risk some PIDs carry. It is named after a 4-mile, four-lane boulevard that runs parallel to I-55 and connects Madison and Gluckstadt. Late last year, developers were unable to service the PID’s debt, and plans for a waterpark and an amphitheater stalled. Because Madison County guaranteed the bonds, taxpayers there had to shoulder the financial burden. In October, the county was officially on the hook for nearly $400,000.

The concept of a PID is simple: Property owners can gather and essentially tax themselves to build something or provide a service their city or county otherwise could not. Some PIDs have convinced counties or other local government entities to guarantee their debt.

For those who have, Secretary of State Delbert Hosemann is proposing instituting standards that would govern post-construction valuation practices. The proposal is one part of Hosemann’s bundle of business reform legislation he will submit this session.

“Unfortunately, because of the success of some of these PIDS, they went and replicated it, and some of them have failed,” Hosemann said. “We have quantified the method of valuation of property post-construction. Some of these have had some enthusiastic appraisals. They didn’t materialize, and the liens on the property were so high that they eventually forfeited to the state, which does no good for anybody.”

As of late Wednesday, the bill had not yet been introduced. The bill-filing pace at the Capitol started to quicken last week after an abnormally slow start due to the installation of new leadership in both chambers.

When it is filed, the legislation would require the appraisal of PID property post-construction to adhere to standards other commercial and residential property is already subject to. It would only apply to PIDs with government-backed loans. The way the law reads now, there are no standards governing post-construction valuation of PIDs.

“This would utilize standards that were proposed by real estate appraisers and tax assessors,” Hosemann said. The bill is the result of committees made up of business professionals and government officials Hosemann formed.

“Clearly, there were holes in the valuation process of some sort because we’ve had a giant default,” Hosemann said. “We want to make sure everybody has taken a real close look at all this and we have good appraisal methodology. We need confidence that the guaranty of the county is not going to be called upon.”

Derrick Surrette, executive director of the Mississippi Association of Supervisors, sat on the committee that formulated the PID legislation.

“Some of these PIDs just haven’t performed like they thought they would” and have created a financial burden for counties that have backed them, he said.

“It’s a tax. That’s the nuts and bolts of it. We have to make certain taxpayers are protected, and I think this has the potential to do that. Another thing I hope this bill will do is prevent counties from being stuck with property with a tax lien that’s worth more than the property itself. I hope it will allow these counties to sell these properties. PIDs can be a good thing. They’re not all bad. But when they do go bad, they’re a tax; in some cases, an expensive tax.”

Economist: With state’s economy vulnerable, expect slow growth

January 19th, 2012 No comments

Mississippi’s economy isn’t terrible.

It isn’t great, either, and it’s going to be a while before it totally rebounds from the last few years.

That was the gist of Thursday morning’s legislative economic briefing by state economist Dr. Darrin Webb and state Treasurer Lynn Fitch.

Webb said the fourth quarter of 2011 was strong, with state revenue up 3.8 percent at year end versus the same period last year. “But I do not expect to maintain that pace,” he told lawmakers.

Where the state is especially vulnerable is employment. Webb’s figures show that there are still fewer people in Mississippi employed now than there were in May 2000, when the state’s number of nonfarm employees peaked. Employment numbers have recovered somewhat from the depths of 2008 and 2009, but not across the board.

“There are still areas of the state that have not participated in the recovery,” Webb said, singling out rural areas of the state where unemployment rates are still closer to 20 percent than 10 percent. It will be at least 2016 before employment rates in the state return to pre-recession levels, Webb said.

More discouraging news can be found in the number of building permits issued. In the first seven months of 2005, right before Hurricane Katrina hit, 7,615 permits were issued. For the same period in 2011, that number dropped to 2,580, a decrease of 66 percent. Permits did trend upward in the second half of 2011, Webb said, but cannot be expected to return to pre-Katrina level for another few years.

The national economy will likely slow in the first half of 2012, Webb said. Fading inventory, a weak housing sector, high government and consumer debt and trouble in Europe will make sure of that.

“And these are issues that just are not going to disappear anytime soon,” Webb said.

National GDP has started the process of recovering from the recession, showing modest growth in 2011 (1.7 percent). That will slow in 2012, Webb said, to 0.2 percent; 0.5 percent in 2013; with the possibility of a jump in 2014 to 3.1 percent. Mississippi’s GDP will follow a similar track. The overall outlook for both, Webb said, is pessimistic “but that doesn’t mean worst case.” Webb estimated the chances of another recession at 30 percent.

“I cannot stress enough the slow pace of this recovery,” he said. “As a rule, slow growth is the new norm.”

Fitch said low interest rates and the availability of GO Zone bonds after Katrina were the primary culprits for the state’s bonded indebtedness increasing over $1 billion the past six years. At year end 2011, the state’s total amount of bond obligations was $4.1 billion, representing about 12 percent of the constitutional debt limit for FY 2012. All but $995,000 of that came from general obligation bonds. That $995,000 is a self-supporting bond, Fitch said, and is paying for the Deer Island restoration project. That will be paid off in November.

Tax credit ‘pass-through’ part of Hosemann’s business legislation proposals

January 17th, 2012 No comments

One piece of Secretary of State Delbert Hosemann’s legislative bundle seeks to wring more use out of a jobs tax credit the state makes available to business start-ups in Mississippi.

What the bill would do is allow for an employee “pass-through” of a jobs tax credit that currently benefits only business owners. 

“What it does is if you had an entity, a corporation or an entity that’s being taxed, and you’ve just started out, you probably didn’t make money the first year,” Hosemann said. “Most businesses don’t. So you have job credits and other things that accrue to the business that are not used.”

Although the state has obligated itself to awarding the credit, there is no taxable income to trigger it, so it lies dormant.

Employers who would otherwise be ineligible for the jobs tax credit could shift it to their employees in $250 increments, according to the legislation, which hasn’t officially been filed yet, but will be before the bill deadline next month, Hosemann said.

Hosemann said he and his staff consulted with the Mississippi Department of Revenue in arriving at the $250 increments, “so we don’t have a bunch of $8 credits or something like that” awarded.

“For example, if I had a $50,000 jobs tax credit and I had 200 employees, I could give each of them $250 worth of credit on their personal income taxes,” Hosemann said. “(Business owners) can give them to their lowest-paid employee or their highest-paid employee. We left them flexible, but it’s the same dollars that we obligated to give them as a credit for coming here anyway.”

A primary benefit of allowing an employer-only tax credit to pass through to employees, Hosemann said,  is it would make Mississippi more competitive with neighboring state Tennessee in attracting new industry. Tennessee has no personal income tax. Mississippi does, and Hosemann said that puts economic developers  — especially those close to the Tennessee border in North Mississippi – at a disadvantage.

“Of course, they’re taxed really at a higher level than we are, based on property taxes and a few others, but it sounds good to say that there’s no income tax. It’s a barrier to us attracting industry here. This makes me competitive with Tennessee, because now I don’t have any personal income tax, either.”

In 2010, Mississippi and Tennessee both offered what were termed by a company spokesperson “very generous” incentives for Pinnacle Airlines to expand its corporate headquarters and locate its 600 employees. At the time, Pinnacle’s total number of employees nationally had just grown to nearly 8,000 after it bought Mesaba Aviation from Delta Airlines. The move made Pinnacle’s corporate headquarters a trophy economic development project.

One of the sites Pinnacle considered was in DeSoto County. The company ultimately picked Memphis.

“Now we’re using it at the employee level, instead of it sitting there not being used, or in the case of Tennessee, being used against us,” Hosemann said.

MPA head: ‘Long list’ of Barbour pardons not advertised beforehand

January 12th, 2012 No comments

An email from Mississippi Press Association executive director Layne Bruce says that “a long list” of Gov. Haley Barbour’s last-minute pardons were not properly advertised in advance, as required by state law.

That’s the crux of the argument Attorney General Jim Hood made Wednesday before Hinds County Circuit Judge Tomie Green in his attempt to gain an injunction to stop the release of some of those pardoned who were still in prison.

In the email. sent Wednesday night, Bruce told members of a MPA listserv that a search by MPA staff members to determine if each of the pardons met the 30-day notice requirement before the pardons were issued “turned up quite a long list of those that didn’t. In more than one case, the public notice for someone requesting a pardon won’t even start publishing until tomorrow (Thursday), two days after the former governor signed the pardon order.”

Green apparently had similar doubts about some of the pardons meeting the advertising requirement, because at Hood’s request she signed an order Wednesday evening halting the release of the still-incarcerated pardons.

What this means in the long run, it’s hard to tell. That the MPA, whose member newspapers in a lot of cases would serve as the advertising medium, has already determined many of Barbour’s pardons were not properly noticed certainly does not bode well for the validity of what the former governor did.

Complicating things is Butler Snow’s announcement Wednesday afternoon that Barbour had joined the firm.

Why would that be troublesome? Butler Snow serves as MPA’s general counsel.