We commend the efforts of Mississippi Lieutenant Governor Delbert Hosemann to reform industrial recruiting incentives. Too much incentive money has been going to too few industries, which is not the best method of growing jobs.
In the past, megadeals that made little financial sense have been pushed by state officials. They make great headlines, but hurt the state more than they helped. States ended up in bidding wars to recruit these mega companies. The result is too much money chasing too few jobs.
A much better policy would be to make incentives available to all industries, big and small, that expand and create jobs. This would give our smaller, homegrown industries a chance to benefit from job creation economic incentives.
Studies have shown that the states which spent the most on huge incentive packages actually had lower growth than states that were more conservative.
Another aspect is transparency. Many of these huge deals were done secretly on the grounds that publicity would scare the deal away. In fact, the real reason for secrecy was backroom dealing and shady payoffs that government officials would rather not see the light of day.
Such secrecy was worsened by one-day special legislative sessions with precious little time to actually vet the incentive package. It was herd mentality and bad public policy was the result. Adding salt to the wound was the fact that our state officials rarely followed up to make sure the industry kept its promises to create the jobs. Failure to live up to the jobs promises rarely resulted in any harm to the company. In essence, our state officials let the taxpayers get taken to the cleaners.
Hosemann’s new plan, Senate Bill 2822, would make incentives available to any business creating at least 10 new jobs and a $2.5 million investment. The application form would be a few pages. The whole process would be transparent. This is an improvement we have advocated for decades. We are happy to see it gaining support.