Tuesday, July 8, 2014

Bryant Trots Out Crappy Incentives

It was reported today that a paper products company will move production to Hattiesburg and hire roughly 300 persons over the five years.

Let's add up what the state and local governments are giving this company to hire workers at a "projected" salary of $38,000 per year to make toilet paper.
  • $12 million in aid and tax incentives
  • Local officials leasing 40 acres to the company
  • $9.75 million in local property tax breaks
  • $629,000 to clear the land 
  • $879,000 in water upgrades
Now, let's divide the approximately $23 million in tax credits and other government handouts by the 300 employees they will potentially hire. That's about $77,500 per job - jobs they say will pay about $38,000 per year.

What about the workers? They will not get these lavish tax credits. Their take home pay will not match anywhere near the folks cutting these deals with the Bryant administration. Bear in mind that per capita income in Mississippi today is $9,000 less than it was in 2000. In sum, we are paying more for jobs that pay less.

This is another reason the state should commit itself to creating our own Earned Income Tax Credit (EITC). In a nutshell, the EITC is a subsidy for working families with low incomes. It has lifted millions of poor Americans and their families out of poverty. Right now, Mississippians can only quality for the federal EITC while 24 other states and the District of Columbia have an EITC of their own.

While the manufacturer gets handouts from the state, it is only fair that workers should get a credit for their hard work too.


Anonymous said...

Sorry to be unclear, but $12 million is the total, not $23 million.
_Jeff Amy

nocomega said...


What's your source that the average Mississippian makes $9,000 less than in 2000? I don't doubt purchasing power has gone down in the past few decades, but I can't confirm that amount, even adjusting for inflation.

Ryan Brown said...

Thanks for the clarification, Jeff. Still, we are giving away these handouts to business while the workers' income could be enhanced if we offered a state-based EITC.

Ryan Brown said...

Ken, here are some good resources for you: http://mepconline.org/taxes-and-income-inequality-50-years-after-the-march and http://s2.epi.org/files/2014/Income-Inequality-by-State-Final.pdf and http://www.rethinkms.org/2014/04/01/slicing-pie-mississippis-economy-works/