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MDA puts ‘smokestack chasing’ in back seat

Glenn McCullough


Mississippi’s economic development agency is taking a more measured strategy for promoting industrial growth in the state.

“This year, more than 80 percent of state-assisted economic development announcements have been expansions of our existing corporate citizens,” Mississippi Development Authority Executive Director Glenn McCullough Jr, said in a news release last month.

McCullough declined to discuss the current trend, though he emailed a statement that said: “The percentage of businesses increasing their capacity in Mississippi is a strong indicator the economy continues to gain momentum, as demand for Mississippi-made products increases in numerous sectors.”

Still the caution exhibited by the MDA, which is answerable to Gov. Phil Bryant, reflects a sentiment that has established itself at least for now.

Then-Auditor Stacey Pickering said in a release in April that losses from 11 failed state-supported projects starting in 2010 stand to cost Mississippi taxpayers $186 million.

“Economic development projects have been good for Mississippi,” Pickering said in the news release. “Overall, we have all benefited from industry being recruited to our state by economic incentives. However, we must remain vigilant in ensuring public dollars are only spent on industry with a track record of success instead of risky startup technology.”

In other words, at least for the time being, “smokestack chasing” in Mississippi is taking a back seat.

A breakdown of fiscal 2018 figures are not yet available.

In fiscal 2017, corporations spent $197 million for expansion, accounting for 1,250 new jobs and 1,571 retained jobs, according to the MDA.

Meantime, 28 existing businesses received 62.2 percent of state grants, for a total of $17.4 million, compared with $224.7 million in private investment and accounting for 2,111 jobs created or retained.

Which is not to say that the state’s taxpayers are not ponying up serious money to recruit industry.

Grants in fiscal 2017 for startups totaled $6.9 million, or 37.8 percent of all grants, to complement $2.69 billion in corporate money, accounting for 3,681 new jobs in 17 projects.

Most of those positions, 2,500, were attributable to the Continental AG tire plant under construction in Hinds County with a $1.45 billion private investment.

“Smokestack chasing” is what historically has made headlines in Mississippi and across the United States.

That phrase simply means that a state is trying to land an industry through enticements.

Those headlines are usually big because taxpayer money is on the line.

Mississippi joined the hunt with the creation of the Balance Agriculture with Industry (BAWI) program promoted by Gov. Hugh White and enacted by the Legislature in 1936 as a variation on President Franklin D. Roosevelt’s New Deal, the program designed to pull the country out of the Great Depression.

BAWI was terminated four years later. Nevertheless under the program Ingalls Shipbuilding was founded and with 11,500 workers remains the largest private employer in the state.

There have been major successes in the past two decades. Automaking made its way with the arrival of Nissan at Canton in 2003.

Toyota followed in Blue Springs (Union County) in 2011.

Between them they have created more than 8,000 direct jobs at a taxpayer cost of $378 million for the Nissan plant and $324 million for the Toyota facility.

Perhaps those heady successes led to a bolder approach.

During the two four-year terms, from 2004 through 2012, of Gov. Haley Barbour, the state made a stake in some ambitious, but ultimately failed start-ups.

The Toyota plant was approved during the year before Barbour’s tenure.

The biggest losses were from Stion Corp. and KiOR.

KiOR received a $75 million loan from the Legislature in a 2010 special session called by Barbour to open a $500 million plant that was to employ 1,000 in Columbus to convert wood chips into biocrude.

The company went bankrupt and the issue of the lost state revenue – $76.3 million is tied up in litigation.

Stion received $74.8 million from MDA during the Barbour administration to invest $400 million and hire 1,000 at a solar panel plant in Hattiesburg. The company closed and the state is currently trying to recoup funds.

A “clean coal” project in Kemper County swelled to a cost of $7.5 billion from the initial estimate of $2.9 billion. Early in the case with its numerous hearings and 450,000 pages of testimony there had been some speculation was that the plant could lead to double-digit increases for ratepayers.



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About Jack Weatherly

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