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Running numbers in, out of the GO Zone

While the Gulf Opportunity (GO) Zone Act has brought accelerated economic recovery to the geographic area most affected by Hurricane Katrina, and has produced many success stories, it is a different tale for those counties that border the GO Zone.

By lining up the counties at the northern end of the GO Zone and comparing some of their economic numbers with the counties that border them, but which are not in the GO Zone, we discover some rather striking dissimilarities. Let us examine some of the the January 2007 unemployment rates by county, as provided by the Mississippi Department of Employment Security.

Here is what such a list would look like:

GO Zone Northern Counties
GO Zone County Jobless Rate

Lowndes 7.1%

Oktibbeha 6.7%

Choctaw 8.7%

Attala 8.0%

Holmes 12.3%

Humphreys 13.1%

Yazoo 8.9%

Warren 6.5%

Average unemployment rate: 8.91%

GO Zone Northern Border Counties

Border County Jobless Rate

Monroe 8.8%

Clay 12.7%

Webster 9.3%

Montgomery 10.8%

Carroll 8.5%

Leflore 10.1%

Sunflower 12.7%

Sharkey 14.3%

Issaquena 12.7%

Average Unemployment Rate: 11.1%

One might say that the high unemployment counties in the Delta skew the numbers. A good initial reaction, to be sure. So let us remove the counties west of Interstate 55 from our analysis. The result is that the GO Zone counties (Lowndes, Oktibbeha, Choctaw, Attala) in Northeast Mississippi have a combined average unemployment rate of 7.63%, and that the non-GO Zone counties bordering them (Monroe, Clay, Webster) have an average unemployment rate of 10.3%. You can do your own analysis.

You can also go online to a couple of Web sites to get a better idea of the effect. Those sites are hosted by the Mississippi Department of Employment Security and the Mississippi Development Authority, respectively:

Forming a picture

One real estate axiom says that a property’s value is most affected by the property next door. If someone was considering building a new building or starting a new business in an area, and that person has a choice of two sites, one of which offered very substantial tax incentives that directly affected his or her bottom line or one that offered no such incentives, which would the person choose? The answer is obvious, of course.

It should also be pointed out that the GO Zone is not only bringing new businesses to its counties, it is making projects feasible that were not so in the past.

This writer was informed that it was the GO Zone legislation that pushed a major downtown Jackson project out of the not economically feasible category into the feasible box. Also, many businesses that were delaying expansion plans immediately decided to go ahead with their projects when they analyzed the economic benefits.

The result is that those counties that border the GO Zone, like the real estate owner next door, are being affected because the property across the county line is being chosen. This results in what might be perceived a negative situation.

Is it?

But not so fast. The GO Zone might be the best thing that could have happened to those non-GO Zone counties, as well, for there is another side to this coin.

If a county was having little or no development in the past, why complain that new development is coming to the next county because of incentives? It may very well be that new people in the area discover the non-GO Zone county.

Some of those non-GO Zone counties above are attractive residential areas for new workers in the neighboring GO Zone counties. There may also be new business opportunities for smaller companies that do not qualify for GO Zone benefits, but who can serve those that do.

Thus, what appears to be a negative for the counties that border the GO Zone might well turn out to be a positive.


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About Phil Hardwick

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