Lawmakers provided $ 247 million in incentives for the aluminum smelter

Mississippi legislation approved a $ 247 million taxpayer-funded incentive in a one-day special session with only a few opposition votes to help the company build an aluminum plant and other operations near Columbus and create at least 1,000 jobs.

Lieutenant Hosemann said Mississippi is competing with at least two other states for the project. Governor Tate Reeves said Monday, when calling a special session shortly thereafter, the incentive package needed to be approved swiftly to help the company “accelerate market entry” and ensure the factory was built in Mississippi.

Government officials said they agreed not to name the company until the deal was signed, and called it the “Triple Crown Project” during Wednesday’s Capitoline meeting. However, numerous sources and trade journals say the contract’s parent is Fort Wayne, an Indiana-based Steel Dynamics company, the third largest producer of carbon steel products in the US

The company already has a steel plant in Columbus. During the summer, Steel Dynamics announced plans to build three major facilities – including one in the Southeast – to supply the automotive and packaging industries with recycled flat-rolled aluminum material. The Steel Dynamic Officer recently filed documents with the registrar of Aluminum Dynamics LLC in Mississippi.

“The $ 2.5 billion project doesn’t go to Mississippi very often,” said Hosemann, “but it will be more frequent because Mississippi is open to business.”

House of Representatives President Philip Gunn, R-Clinton, said the project “will be a great opportunity for economic development for the Golden Triangle, creating at least 1,000 jobs and hopefully economic prosperity.”

(Note: the details of the transaction are detailed below in this article)

While there were few opposing voices on Wednesday, Democrats and even some Republicans questioned why lawmakers were rushing to pass the incentive agreement while ignoring other issues putting pressure on the state.

When asked why lawmakers did not issue or enact policies to address water infrastructure problems, hospital closures, and other pressing issues, Hosemann noted that only a governor could summon lawmakers to a special session and set the agenda. He announced that the legislator would deal with such issues when the regular session began in January.

“In about eight weeks you’ll see how we handle the rest,” said Hosemann. “This particular legislature was not shy about looking at the problems, and I expect these problems to range from water and sewage to hospitals and pretty much anything that the legislator believes should be resolved.”

Incentive bills went through the 122-member House with just five ‘no’ votes – all from conservative or libertarian republicans who oppose ‘corporate welfare’. The four Democratic Houses voted as present. In the Senate, the measures were passed unopposed and only Kathy Chism, R-New Albany, voted present.

Robert Johnson’s representative D-Natchez expresses his concerns at a press conference regarding Governor Tate Reeves’ plan for the economic development project after the Senate passed it at a special session at the Mississippi Capitol in Jackson, Wednesday, November 2, 2022. Loan: Eric Shelton / Mississippi Today

But Legislative Democrats held a press conference during Wednesday’s session to highlight the urgent needs facing the state.

“Nobody here is saying that economic development is not a good thing,” Natchez representative Robert Johnson, leader of the Democratic House, on the south steps of the Capitol said Wednesday. “But while we’re in this building, with the crisis that affects every Mississippi, we should talk about solutions. It would be an abuse to get out of here, at the height of this crisis, without enacting legislation that would begin addressing the myriad problems facing our state’s health system. “

Given the previous waste that left Mississippi taxpayers at the hook for millions as companies collapsed or failed to provide incentive jobs, lawmakers reassured their colleagues on Wednesday that the deal included a stringent “recall” and other measures to protect countries.

“I think these are the most stringent steps we have ever done,” said Senate Finance Chairman Josh Harkins of R-Flowood. “To a large extent, that wouldn’t even be a recall – it’s about reimbursement. We’re not just going to cut their check in advance. It will be given as a refund when they do certain things… This is a strong performance-based deal if you prefer. They have to produce to get incentives. ‘

Tax breaks and tax credits would be suspended if the company did not meet the hiring and investment criteria defined in stages, lawmakers said, although Shanda Yates State Representative I-Jackson noted during the debate that the language in the laws says the Mississippi Development Authority “may “Enforce withdrawals and suspensions, not” should “.

House Ways and Means chairman Trey Lamar said this was to allow MDA to negotiate with the company to restore compliance and ensured that taxpayers of the state would be protected. He said all clawback laws are with the parent company being “wealthy” and not a startup like some companies that have burned down the state in the past.

Reeves and others called the deal the largest economic development project in the state’s history and said the company promised an average wage of $ 93,000 per year. Hosemann said he was told the lowest salary for the project would be “$ 58,000 plus bonuses.”

Lamar said, “It will be life-changing money for families who are not used to earning so much money in Mississippi.”

Here are some of the highlights of the Triple Crown Agreement:

  • Lawmakers have allowed the state to borrow up to $ 246.7 million – enough to cover the entire incentive package the company wants, including subsidies, road works, tax breaks, and land. This was to provide the company with all the incentives. But lawmakers approved the release of $ 81.1 million in cash upfront and said they hoped not to borrow any money for the deal, but to pay in cash as it went through as long as state finances remained rosy. And yes, the first loan would not have taken place for three years, said Hosemann.
  • The incentives include a $ 155 million subsidy to the company. This includes $ 54 million in the first payout, followed by other “tranches” as the various expansion and hiring goals are met. The state is also lending $ 18 million to Lowndes County to purchase the remainder of the 2,100 acres the company plans to use. Grants also include $ 25.1 million for road works for the project.
  • Incentives range from up to $ 92 million in tax breaks and rebates, most of which are tied to jobs created. As the state is still considering massive tax cuts or elimination, the state will guarantee up to $ 45 million in a reserve account if the company continues to add jobs, even if legislators further abolish or lower taxes. Lowndes County also provides the company with large local tax breaks.
  • The company commits to investing $ 1.9 billion in recycled aluminum flat rolled rolling mill and creating 700 jobs. It pledges to invest $ 150 million in a “renewable biocarbon plant” and create 40 jobs. An MDA official told lawmakers that the plant would burn organic material to produce ash that would be used as a raw material for steel production.
  • The company has pledged $ 200 million in investments and 160 jobs from other companies – customers and suppliers – located on the new campus of an aluminum smelter. Lawmakers said that while these were other companies, the paper industry parent company would be reliant on an incentive agreement for this reason. The company also promised to invest $ 250 million in “A Future Project That Will Be Called Later” and create at least 100 jobs.

Surrounded by the predominantly African-American Democratic Legislative Club, Johnson resigned from bills that were supposed to:

  • Expand Medicaid to provide healthcare primarily to working poor.
  • Deliver $ 40 million to Jackson’s beleaguered water system to deal with urgent problems with available and high-quality drinking water.
  • Provide grant funds for rural hospitals.

These bills, he said, are ready for immediate adoption if the governor turns them on for a special session. The governor noted that these issues could be discussed at the regular meeting.

Johnson noted that state health officer Dr. Dan Edney recently said that as many as six hospitals are at risk of closure.

Closing the hospitals would have a negative impact on Mississippi’s health care outcomes, which are the worst in the country anyway. Hospital problems are occurring, Johnson said as state officials projected an additional 5,000 births a year, and a Supreme Court decision granted states the right to ban abortion, as the Mississippi had done.

Aside from being life and death issues when it comes to water quality and the health care available, Democrats said they are also issues of economic development.

Derrick Simmons of Greenville, leader of the Senate Democrats, said that expanding Medicaid, by taking in more than $ 1 billion a year in federal funding for healthcare, would provide more economic growth than the aluminum factory.

The closure of hospitals in Greenville and Greenwood would result in more job losses than those produced by aluminum.

“It looks like only new jobs constitute an emergency legislative session,” said Simmons. “The jobs that the hard-working Mississippi continue to lose as hospitals close, no. The logic does not match.

On social media, Zakiya Summers state representative D-Jackson said, “Mississippi needs economic development. However, we don’t have a special session on the water crisis or the closures of hospitals statewide. Mississippi also needs these basic services.

Johnson said the economic development package could have been adopted in the regular session starting in January. Instead, he called the special session “campaign event – a political rally” for the governor.

Creative Commons license

Publish our articles for free, online or in print, under a Creative Commons license.


Add a Comment

Your email address will not be published. Required fields are marked *