BOBBY HARRISON: Taxpayers will doubly subsidize Pearl retail site

BOBBY HARRISON

BOBBY HARRISON

JACKSON

This month, two separate but perhaps related events will occur.

Already this month, Fitch credit rating agency has given Mississippi’s bond rating a negative outlook. Fitch essentially said the state is still struggling economically while it has a high level of poverty and too many undereducated people. In addition, Fitch said Mississippi’s fiscal house is not in order.

Later this week, the Outlets of Mississippi, the state’s largest retail development, will open in Pearl, and the state will begin the process of paying the owners of the giant mall more than $20 million over about a four-year period.

The owners of the retail development will take advantage of a state law that will allow them to be reimbursed 80 percent of the retail sales tax collected at the mall until they receive 30 percent of their investment back.

Ricky Cummings, a former Iuka state House member, was the architect of the sales tax rebate legislation. Cummings, Appalachian to his very core, was convinced that his native Tishomingo County would be the ideal location for various tourist attractions – whether it be water parks, amusement parks or perhaps a luxury hotel.

Cummings always maintained that Tishomingo had natural beauty that was unmatched and would be a destination tourism location if given a little help.

To that end, in the early 2000s, Cummings proposed and successfully passed legislation designed to lure major tourism projects to Tishomingo or in any other location in the state through the sales tax rebate program.

The idea behind the program is that no taxes would be collected if the attraction did not locate in the state. So it was a good deal to provide the rebate to lure a new attraction to the state. The key word here is new.

Cummings, for instance, made sure that casino-related attractions would not qualify for the rebate. They were coming to the state without the need of an enticement.

The sales tax rebate program was used to build the baseball stadium in Pearl for the AA affiliate of the Atlanta Braves.

The Legislature during the 2013 session amended the law so that it could be used to help pay for the development of an outlet mall in Pearl.

It came to light during the 2013 session that the mall was set to open whether it got state help or not. But with a state subsidy, legislators were told the mall could open sooner.

Legislators readily agreed.

House Ways and Means Chair Jeff Smith, R-Columbus, told legislators at the time that the mall was a tourist attraction because it would have murals, a Mississippi music motif and perhaps live music would be played.

No doubt, the mall will generate some out-of-state visitors, but the bulk of its customers will be shoppers redirected from Jackson and the other suburbs, such as Madison, Ridgeland, Clinton and Richland. More than likely those customers would have spent their money somewhere on shopping if the Outlets of Mississippi did not open.

Of course, the new retail outlet will create a bunch of jobs – more than 1,000, according to reports.

It is a safe bet that the bulk of the people employed at the Outlets of Mississippi will receive few benefits – no health care – and be eligible for food stamps because of the low wages they will be paid. In other words, the taxpayers will be subsidizing the retailers not just with the construction through the sales tax rebate, but with the everyday subsistence of their employees.

Now, do not get the wrong idea. I strongly believe in the value of work. All work should be honored and respected.

But it is fair to ask if the should the state be in the business of subsidizing retail developments – shopping malls – especially when a national credit rating agency is questioning whether Mississippi has its financial house in order? In other words, do Mississippi’s political leaders need to be giving away limited state revenue to people building shopping malls?

Oh, a planned new mall in Southaven will be asking for the same tax incentives.

Bobby Harrison is the Daily Journal’s Capitol Bureau chief. Contact him at (601) 353-3119 or bobby.harrison@journalinc.com

  • vechorik

    I was outraged to see that the MS legislature passed a bill to call “cultural retail” for this. TOURISM.- Shopping is tourism? This sentence makes me particularly angry: “the mall was set to open whether it got state help or not.” Thanks for you article (MS needs to know). When MS shells out taxpayer dollars, there should be an evaluation system to see if the program was beneficial. They toss the money out, but seldom evaluate success/failure.

  • charlie

    Ask the gov. how many of the jobs are 40 hours a week?

    • countrydawg

      Good point, Charlie. And how many of those jobs are seasonal? Your bought and paid for state government, everyone.

      Subsidizing retailers is nothing new–like cities and towns bending over backwards for Walmart. But local governments foot the bill in those cases. When you have the state government shelling out millions to a private contractor (paying back a campaign contributor?) under the guise a silly designation, what stops other businesses from wanting in on that hustle?

      Aren’t these the same types of actions Philbert and the rest of the state’s GOP clown car accuse the federal government of doing? Irony just chuckled.

  • FrereJocques

    undoubtedly, some Legislators’ palms were crossed with a little silver……or maybe some other Quid Pro Quo……….

  • Thile

    Southaven and Gulfport area malls now want in on this joke of a subsidy. So to you folks that run the Mall at Barnes Crossing: paint some murals and/or pipe in some classical music if you guys want a spot at the trough.

  • Jack Makokov

    The state’s tea potty groups’ silence/hypocrisy surrounding this misappropriation of public monies is quite telling. Guess they all like shopping–or trying to get a subsidy on the gas they’ll need to travel to central Mississippi.