Mississippi, the birthplace of state-legislated job subsidies, pulls out all the stops to encourage foreign automakers to build and expand within the state. In 2000 the state put together what was then a staggeringly large deal (especially for a poor state) said to be worth more than $295 million for Nissan (it later turned out to be much more expensive). In 2007 the state offered a nearly equivalent deal to Toyota, which started and then mothballed an assembly plant because of the weak car market; it finally opened in late 2011 (for more on both deals, see below.) In recent years, the Mississippi has been shaken by few failed deals. In 2012, Twin Creeks, a solar panel start-up, went out of business after the state spent $27.7 million on the company’s facility. In 2014, KiOR defaulted on a $75 million loan from the state. In both instances, Mississippi had to sue companies to recoup the money but it is unclear if the state will be able to recover all of the subsidies.
State economic development subsidy programs employ bonds, tax credits, tax exemptions, and diversion of personal income tax withholding—they even allow companies to charge their employees “job development assessment fees” (wage reductions which workers can then claim as credits on their personal income tax returns). Historically, the largest subsidy program was the Jobs Tax Credit, a corporate income tax credit criticized for not disclosing the number or location of jobs created. It has been surpassed by the Advantage Jobs Incentive Program, which allows companies to receive benefits based upon the personal income tax payments of their employees.
In 2012, a community-based organization called the Bigger Pie Forum received via an open records request and posted online the 2012 Incentive Report, an internal document prepared by the Mississippi Development Authority. The document disclosed recipients of several subsidy programs, including Major Economic Impact Act and Advantage Jobs. Later, the MDA posted the report on its website, making the disclosure official. In 2014, the state passed a law that requires the University Research Center to study all tax subsidies at least once every four years.
- Show Us the Subsidized Jobs rank among the states: 34th
- Money for Something rank among the states: 17th
- Money-Back Guarantees rank among the states: 23rd
Big Giveaway Index
Other Resources
Watchdog Groups
Key Subsidy Programs
| Subsidy Program | Recent Annual Cost |
Online Recipient Disclosure |
Recipient Disclosure Score |
Job-Creation/ Job-Quality Score** |
Monitoring/ Enforcement Score*** |
|---|---|---|---|---|---|
|
$11 million (FY2013)
|
8/100
|
80/100
|
63/100
|
|
|
$2 million (FY2013)
|
0/100
|
35/100
|
40/100
|
|
|
$37.2 million (CY2012)
|
53/100
|
70/100
|
70/100
|
|
|
$2.7 million (FY2013)
|
0/100
|
10/100
|
30/100
|
|
|
$11 million (FY2013)
|
0/100
|
35/100
|
40/100
|
* The score is derived from the Good Jobs First report Show Us the Subsidized Jobs (January 2014).
** The score is derived from the Good Jobs First report Money for Something (December 2011).
*** The score is derived from the Good Jobs First report Money-Back Guarantees for Taxpayers (January 2012).
Major Subsidy Deals
Nissan auto assembly plant (2000)
In mid-2000 Nissan contacted officials in various states about its plans to build a U.S. assembly plant for minivans, SUVs and full-size trucks. Mississippi, eager to follow neighbors Tennessee and Alabama into the motor vehicle industry, jumped at the opportunity. After getting encouraging responses from the company to its initial overtures, the administration of Gov. Ronnie Musgrove put together a subsidy package worth more than $295 million. A hastily called special session of the state legislature quickly approved the plan, which required the state to borrow the $295 million to build roads at the site in Canton and pay for training more than 3,000 workers for the $930 million facility. No figure was put on the tax breaks the company would also receive over time.
After the initial euphoria over the deal died down, black landowners complained of racial discrimination in the way the state assembled (through eminent domain) the huge land parcel it provided to Nissan. In June 2002 the state legislative approved an additional $68 million in subsidies for a second phase of the plant. The first phase, whose total cost had risen to $1.4 billion, began operation in May 2003. The following year it reach its full staffing level of about 5,000, including about 1,500 contract workers. In 2005 the United Auto Workers open an office in Canton but did not launch a formal organizing drive. (Key sources)
Toyota auto assembly plant (2007)
Toyota chose the tiny northeastern Mississippi town of Blue Springs (located about ten miles from Tupelo) as the site for its eighth North American assembly plant. The Japanese automaker said it would invest about $1.3 billion on the facility, which was initially supposed to produce the company’s Highlander crossover SUV. Only a few days after the deal was announced, state legislators approved the $294 million subsidy package that Gov. Haley Barbour’s administration had negotiated with the company, plus an additional $30 million for Toyota’s major suppliers. Local governments were expected to kick in another $60 million.
In May 2008 Toyota pushed back the opening date for the plant because of slumping U.S. auto sales and soon thereafter announced that the plant would produce the company’s popular Prius hybrid rather than the Highlander. In June 2010 the company resumed construction and announced that, in addition to hybrids, Blue Springs would produce the Corollas that had previously been assembled at the company’s NUMMI plant in California, which Toyota decided to close after General Motors withdrew from the joint venture that ran the operation. The move was denounced by the United Auto Workers, which had represented the NUMMI workforce and had pressured Toyota to keep the California plant open. The Blue Springs plant began production in November 2011. (Key sources)
Walmart in Mississippi
- At least 13 Wal-Mart locations have received subsidies worth about $27.1 million in Mississippi.
- At least 1 Wal-Mart location in Mississippi has challenged its property tax assessment.
- Many Wal-Mart workers are ineligible for health coverage from their employer or choose not to purchase what is available, because it is too expensive or too limited in scope. These workers often turn to taxpayer-funded health programs such as Medicaid. Mississippi is among those states that have not disclosed data on the employers with the most workers or their dependents enrolled in such programs.
For more information, see the Mississippi page of Wal-Mart Subsidy Watch.