Gov. Haley Barbour’s State of the State address January 21 outlined his intent to install a tax cut before he leaves office and highlighted the record employment level the state has achieved.
And with new businesses like the Toyota Plant near Tupelo and SeverCorr’s steel plant in Columbus, there is reason for optimism.
But his message about economic development for the short-term wasn’t as positive. With the national economy’s weakening and fears of a recession gathering, states are finding that their budgets will have to be tightened, meaning programs and agencies will have to face the possibility of cuts.
Add to that the slump in the financial markets, and the outlook for new economic development in the state isn’t bright, at least in the short-term.
“Serious troubles in the financial markets have not only generated pessimism but also have caused a real credit crunch,” Barbour said. “Reduced availability of credit will make economic development harder.”
That is a hard reality for those who promote and recruit new business and industry to two struggling areas of Mississippi — the Delta and the Southwest region.
Auto manufacturers like Toyota and Nissan have jump-started local economies in North Mississippi and the Metro Jackson area. But the Delta counties and the area north and west of McComb haven’t had an economic jolt usually provided by a large corporation coming to town.
“We feel like we’ve been suffering a long time,” said Britt Herrin, executive director of the Pike County Chamber of Commerce. “We’ve got a different economy that what you see in the Metro Jackson area or in North Mississippi. We’ll just keep on doing what we’ve been doing. Every change offers a new opportunity. We’re doing all we can to help our businesses already here. “
Henry Cote, who worked at the Mississippi Development Authority before taking over the Yazoo County Economic Development Foundation last year, said his job description now includes securing lines of credit most businesses require before beginning operation.
“My strategy is to concentrate on the service and retail industry, and to search out credit. That’s something we don’t normally do but we’ll have to.”
Both Herrin and Cote are hoping the economic stimulus package being considered by Congress and President Bush will be the salve for a wounded market. Herrin said any kind of stimulus “would be helpful” in reversing the current negative trend of the national and state economy, which has experienced flagging revenue growth the first half of this fiscal year, a point Barbour noted.
“(Two weeks ago) our state economist said Mississippi sales tax receipts for July through December 2007 had increased only one-tenth of 1%.”
Cote said making a sales pitch to prospective businesses is more difficult in this type of slide.
“It makes recruiting harder,” he said. “There are some foreign automakers who are considering locating in the Southeast and those plans might have to be put on hold if we take a huge downturn. We’ve seen it before and we’ll get through it. We go through these cycles. You have these times and you deal with them.
“There are government programs that will get tapped more, but that’s good. Government lending rates are generally better. I’m cautiously optimistic.”
All you can do, Herrin said, is keep plugging.
“You have to look under rocks to find opportunities. We’ve been digging under rocks and we’re going to continue to do so. There’s too much at stake for us not to.”
Contact MBJ staff writer Clay Chandler at email@example.com .
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