In the past, when Mississippi would add tens or even hundreds of millions of dollars in corporate tax breaks as part of the carrot to lure a big industry, it would rationalize the giveaway by saying it would recoup the lost corporate taxes and more from the employees the new company would hire.
One novel and troubling twist in the megadeal the Legislature approved last week to land a massive new tire factory in Hinds County is that the state has agreed not only to forego a big chunk of corporate taxes but also workers’ taxes as well.
To be clear, the 2,500 employees Continental Tire promises to hire won’t be allowed to keep this money. They still will have state income-tax withholding deducted from their paychecks. But the state has agreed to give the majority of what’s collected back to Continental.
It’s one more step down the slippery slope of giving away the store so that politicians such as Gov. Phil Bryant can brag about how many jobs they’ve created for the state, all while ignoring how many jobs they have cost the state by giving a handful of select companies an advantage over everyone else.
The totaling up of the Continental megadeal is still a work in progress. The state has been less-than-forthcoming in explaining all that they’ve given away, so reporters and other watchdogs are having to dig through the 196-page bill that only a handful of lawmakers probably even read before passing it in a rushed-up one-day special session. The Associated Press has so far counted at least $600 million in state and local incentives, including $87.5 million of workers’ state income-tax withholding that will be rebated to Continental over 25 years.
What will Continental do with that money? Possibly use it subsidize worker pay so it can offer higher salaries to entice skilled workers away from other companies that don’t receive those kinds of government handouts.
Every time one of these multibillion-dollar companies is landed, the Mississippi Development Authority and the other deal makers tout how well the new company pays its employees. The average pay at Continental supposedly is going to be $40,000 a year. Great, but what company couldn’t afford to pay that if it was getting $240,000 per job in public subsidies?
In the meantime, the state has the expense of providing the government services and amenities that these workers consume. Who will be picking up the full tab for that? Not Continental. Not the workers.
You got it. All the rest of us.