Analysis: Job creation bills pending at Capitol

By Shelia Byrd/The Associated Press

With the recession’s effect still lingering in Mississippi, legislators are taking a hard look at job creation proposals as the 2010 session heads into its final month.

Several bills designed to stimulate economic development are pending at the state Capitol. House Ways and Means Chairman Percy Watson and Senate Finance Chairman Dean Kirby said the answer to the state’s declining revenue collections is to find employment for the thousands who have lost jobs through business closures or layoffs, not to impose new taxes to generate revenue.

“The experts say that when you are in a recession or trying to recover from a recession, it’s not a good idea to increase taxes. It would have the effect of hurting the economy,” said Watson, a Democrat from Hattiesburg.

Kirby, a Republican from Pearl, said “there are no new bills originating in the Senate that will raise taxes, none at all.”

The state’s unemployment rate is 10.3 percent, and a number of plants have closed their doors in recent months.

Delphi ended production at its Clinton plant in February. The facility once employed 300 workers to produce cable and wiring connectors for GM, Toyota and other companies. In December, Air Cruisers, which manufactured emergency life vests and other items, announced it would close its plant in Liberty, where 90 were employed.

Mississippi consumers have responded to the tight economy by holding onto their cash. The state’s tax collections have come in under projections for the past 18 months, leading Gov. Haley Barbour to cut $458.5 million from the state’s current government spending plan.

While the federal stimulus has helped prop up Mississippi’s budget, there’ll be less of that money in the fiscal year that begins July 1. And, lawmakers have said they don’t expect to see robust tax collections any time soon.

“Now, more than any time probably in our history, it’s important to recruit high-tech, manufacturing jobs,” Kirby said.

The Senate has passed a $50 million bond bill to bring a new solar panel industry to the state. Kirby didn’t name the company or where it would be located, but he said the facility would employ 500 people within five years. Under the legislation, the county would receive a loan that would be repaid to the state.

The average salary of an employee would be $34,000, Kirby said.

Economic development has been a focus since the session’s start. On opening day, the House and Senate approved legislation that provided $15 million in bonds to help the German company, Wilh. Schulz GMBH, build a pipe plant in Tunica County.

Watson said the House is considering bills that would allow the Mississippi Small Business Participation Loan Program to provide more capital at lower rates and under less credit requirements. He said there’s also legislation that would allocate $50 million for the Mississippi Incentive Finance and Revolving Fund with the aim of attracting more industries to the state.

The Senate’s version of the incentive finance program would provide $100 million, Kirby said.

“We’re talking to at least four more manufacturers about coming to Mississippi,” Kirby said.

Lawmakers are trying to ensure the state isn’t giving away too much in an effort to attract business. For instance, a provision of the proposal for the solar industry stipulates the loan will be forfeited if the company’s employment level falls 50 percent below what’s in the state contract, said Kirby.

There are only five weeks left in the session. The bills dealing with bonds and incentives likely will soon be in conference, where lawmakers from both chambers try to negotiate agreements.