By Bobby Harrison
Daily Journal Jackson Bureau
JACKSON – Legislators representing Lee County all say they support providing $20 million in incentives to help Cooper Tire upgrade its Tupelo plant and are optimistic it will pass this session.
The optimism remains even though no bills have been filed this session to spur the Findlay, Ohio-based company to invest $140 million to update its Tupelo plant. The issue has not been discussed in either chamber of the Mississippi Legislature.
“I am very optimistic that we will get something,” said Sen. Nancy Collins, R-Tupelo, who said she recently visited the plant to learn more about the proposed new equipment and renovations.
The deadline has passed to take up an individual bond bill to authorize $20 million for Cooper Tire. But what could happen, and what often happens with bond issues, is that Cooper Tire could be inserted into the final bond agreement hammered outbetween House and Senate leaders.
The deadline to reach that agreement is March 29 – a Saturday – and routinely legislative leaders wait until that day to reach an accord.
Rep. Jerry Turner, R-Baldwyn, said the issue is important enough that “the governor can call a special session within the regular session and pass it without costing the taxpayers any extra money.
“The last I heard they are working with the Mississippi Development Authority and the governor and they will get back to us with a plan,” he said.
Last month, Cooper Tire officials, including CEO Roy Armes, and David Rumbarger, head of the Tupelo-based Community Development Foundation, traveled to Jackson to meet with Gov. Phil Bryant and legislative leaders to discuss state assistance for the project.
Cooper, according to Armes, has made the decision to spend $140 million to modernize its operation. The question, from the Cooper perspective, is on what plant or plants will those funds be expended.
What is under consideration, according to Rumbarger, is a $20 million investment from the state, plus $18 million from Tupelo and Lee County, to lure Cooper to make those renovations at its Tupelo plant. The money from the local government would come in the form of tax breaks that are allowed over a 10-year period for companies that make major investments.
The investment would ensure that Cooper remains in Tupelo and, according to Rep. Steve Holland, D-Plantersville, would guarantee continued growth of the Tupelo plant because of how efficient it would become.
Holland began talking about the needs at Cooper Tire last April when the Legislature passed an incentive package of at least $70 million to lure a Yokohama Tire plant employing at least 500 to Clay County.
Holland said he does not believe passage of the bond package for Cooper will be controversial this session unless it gets caught up in a fight over the size of the total bond package. Two years ago, Lt. Gov. Tate Reeves essentially blocked passage of any bonds because House leaders wanted a larger package than he was willing to accept.
This session the House has passed bonds totaling more than $400 million. But leaders of both chambers have conceded the final agreement would be for a package totaling about $200 million, which is close to the amount of bonds the state pays off each year. Reeves has said his goal is to reduce state debt or at least not increase it.
In an earlier interview Reeves called a meeting with Cooper officials productive, but did not commit to the project.
Sen. Hob Bryan, D-Amory, whose district also includes portions of Lee County, including the Cooper plant, said members have been working quietly to ensure the package is passed this session.
The plan, Bryan said, would be for Lee County to purchase the Cooper Tire building for $20 million with the funds to make the purchase coming from the $20 million state bond bill. Cooper then could use those funds for its modernization.
Bryan admitted there is concern with setting “a precedent” where other companies would be saying they need state incentives or they will close. Bryan said there are several factors that would make the state investment in Cooper Tire worthwhile, including the fact the modernization “would lay the foundation for further expansion in the future.”
He said, “I am confident we will find a way to do this before the end of the session, but there are lots of details to work out.”
Sen. Russell Jolly, D-Houston, agreed, saying, “We are giving incentives all over the state. We feel we need a few here, especially if it keeps jobs in the Lee County area.”
Reps. Randy Boyd, R-Mantachie, whose district includes parts of Lee County, and Brian Aldridge, R-Tupelo, also said they support the project.
“I am for anything that helps keep jobs in Northeast Mississippi,” Aldridge said.
Boyd said, “The last thing I heard everything was good” as far as approving the project this session, but added Northeast Mississippi legislators needed to keep “pushing for it.”
One factor that could make the issue more complex is that Cooper is not committing to more jobs than already are at the plant. The plant employs 1,600.
Rumbarger and legislators predicted that the modernization would lead to further growth by the tire manufacturer and point to Cooper’s history of exceeding promises of job growth.
“Cooper Tire must spend money somewhere or equipment upgrades in order to remain globally competitive and I want them to spend it right here in Tupelo,” Collins said, adding a state investment in Cooper “makes sense.”
Cooper began operations in Tupelo in the 1980s and has an annual payroll of more than $80 million.The modernization would allow Cooper to sell directly to automotive manufacturers.