Incentive packages growing in size as states lure new business
Lawmakers are increasingly approving mammoth subsidies to convince companies — particularly large manufacturers — to relocate to their states.
Mississippi lawmakers are meeting in Jackson on Wednesday to consider what the governor’s office called the largest economic development deal in state history.
While the deal’s details are still unknown, it’s increasingly common for state lawmakers to approve mammoth subsidies to convince companies — particularly large manufacturers — to relocate to their state.
Mississippi Gov. Tate Reeves (R) called lawmakers to the Capitol to discuss incentives for “a flat-rolled aluminum production facility, biocarbon production facility, and certain other industrial facilities,” according to a press release from his office. The release said the deal would create 1,000 jobs, which would pay on average $93,000.
“Looking forward to full legislative bodies taking swift action for what could be a 1-day session!” Reeves tweeted on Monday. He also said legislative leaders were “briefed and very helpful.”
As they convene, Kansas Gov. Laura Kelly (D) will break ground on a Panasonic electric vehicle battery plant, which was the beneficiary of some $800 million in state incentives that Kansas officials say could create 4,000 jobs.
The announcements give governors an opportunity to tout their efforts to boost the state economy, but the deals carry risks.
While some economic incentive deals do create jobs as promised, others do not, said Greg LeRoy, executive director of Good Jobs First, a Washington, D.C.-based nonprofit that tracks economic development incentives.
“You’re risking a whole ton of public money on the success of an individual corporation, often in markets that are volatile, and full of innovation, and prone to disruption,” he said.
The new jobs are costly. Good Jobs First in 2016 calculated that the average “megadeal” spends $658,000 of taxpayer money per job.
Still, other state leaders also have their sights set on expanding incentives to attract employers.
Illinois Gov. J.B. Pritzker (D) earlier this month told Crain’s Chicago Business that he’d like to create a $1 billion ‘closing fund’ if he wins a second term.