House committee OKs furniture tax breaks

By Bobby Harrison/NEMS Daily Journal

JACKSON – House leaders say they hope a new proposal to provide tax breaks for the ailing furniture industry, much of which is concentrated in Northeast Mississippi, will be acceptable to Gov. Haley Barbour.
The Ways and Means Committee passed legislation Wednesday to provide a tax break of $2,000 for each new cut-and-sew employee hired by furniture companies. Last year, Barbour vetoed legislation that provided tax breaks for cut-and-sew jobs.
But Ways and Means Chairman Percy Watson, D-Hattiesburg, said key differences exist between the current proposal and what the governor vetoed in 2009.
The legislation last year provided a tax break of $2,000 for all cut-and-sew jobs. The new proposal provides the tax break for new hires.
Another key difference is that last year a company could get the break for an employee who worked 30 hours per week. The new proposal requires the employee to work 35 hours.
“We made some adjustments in the bill. Hopefully they will be embraced by the governor and the Senate,” said Speaker Billy McCoy, D-Rienzi. “We think this is extremely important for the furniture industry in Mississippi … for its overall success, for continued employment and hopefully for additional employment. That will benefit the entire state.”
Based on statistics compiled last year, since more than 8,000 jobs have been lost in the furniture industry since 2000. Many of them are cut-and-sew positions.

Good employment
A study by the Mississippi State Stennis Institute of Government said cut-and-sew jobs provide good employment to employees, traditionally females, who would be forced to work for lower wages and fewer benefits if they lost those jobs.
Overall, the upholstered furniture industry employs more than 47,000 in direct and indirect jobs and is a $6 billion industry, according to the Stennis study. The study also said the industry is steadily losing jobs.
Ken Pruett, president of the Mississippi Furniture Association, was pleased with the action of the Ways and Means Committee.
“It will give incentives for bringing jobs back,” he said.
Dan Turner, a spokesman for Barbour, said, “Once we get the bill he will take a look at it.”
Pruett said furniture manufacturing has experienced some modest job growth this year, and expressed optimism that the tax break bill would boost the industry and be good for the entire state.
“This will allow us to keep more jobs from going overseas,” said Rep Jerry Turner, R-Baldwyn. “It will allow us to be competitive with overseas products in price and quality.”

Contact Bobby Harrison at (601) 353-3119 or bobby.harrison@djournal.com.