For too long, bringing economic development to our state has been a one-side negotiation.
It is no secret the Mississippi, among the poorest states with chronically high unemployment, has gone to the table with an unmistakable air of desperation — a sign of weakness that companies are quick to note.
Too often, we find, the “whatever it takes” approach has produced jobs, but at a staggering cost. Each deal seems to bring bigger and bigger incentives through tax breaks that rob the state of much-needed revenue.
This hasn’t been the case so far for a planned project by Southern Cross, which intends to file for permission from the Mississippi Public Service Commission to build a wind power transmission line across the state, part of a $1.3 billion project that starts in Texas and ends in Caledonia.
The company will spend $700 million of that project in Mississippi — provided it gains approval of the PSC.
It is at this point the familiar script is turned on its head.
Unlike past agreements where the state has set few terms and made many concessions, the PSC is asking Southern Cross to agree to terms that produce real, long-term benefits to the state.
Northern District PSC board member Brandon Presley, who also serves as the PSC chair, has given the company conditions it must meet if it is to have the PSC’s blessing.
First, the company must make every effort to recruit and employ Mississippi contractors for construction of the transmission line. If the company is unable to find Mississippi companies that can perform the needed work, it must provide the PSC with reasons why.
Second, the company must build their $300-million converter station in Mississippi. Presley says the company originally planned to build that station near Caledonia but briefly toyed with the idea of putting it just over the state line in Alabama. That station will provide more than 20 permanent jobs and presumably result in additional tax income.
Finally, upon completion, the company must agree to make 12.5 percent of the energy carried on their lines available to Mississippi utility companies. Doing so would diversify the utility companies’ power options and act as a hedge against increases in the costs of conventional power such as natural gas or coal.
Presley, in an interview with The Dispatch Monday, noted that building a transmission line without allowing the state to reap some of the benefits is like building a railroad where the trains never stop in our towns.
Finally, although it is out of the PSC’s control, Presley wants Southern Cross to pay its fair share of taxes. Too often, the state and counties have provided companies with tax breaks that relieve them of paying their full share of taxes for 10 to 20 years, depriving the state and counties of that revenue.
We like this approach. The concessions sought are fair to both Southern Cross and to the people of Mississippi.
There is always a “cost of doing business.”
For too long, Mississippi has borne most of the costs while enjoying minimal benefits.
Admittedly, the specifics of this project gave the state some negotiating power we don’t always have on development deals. That said, Presley’s approach shows these deals can sometimes be worked in ways that are fair to both the business and to taxpayers.
The Dispatch Editorial Board is made up of publisher Peter Imes, columnist Slim Smith, managing editor Zack Plair and senior newsroom staff.
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