On Friday, Mississippi Gov. Phil Bryant announced plans to stabilize a $75 million revenue shortfall with a 1.5 percent budget cut and by taking $35 million from the state’s rainy day fund.
This move wouldn’t have been necessary if the state didn’t pick winners and losers with a huge raft of tax incentives.
Here are some risky and controversial investments of taxpayer funds that could’ve helped seal the breach in the state’s budgetary hull:
Film production subsidies – $3.9 million in 2015
Mississippi taxpayers gave filmmakers $3.9 million in subsidies to lure TV and film production to the state in 2015, the most in four years. Think these subsidies are building a lasting industry? Think again.
According to a report by the Legislature, taxpayers lose 51 cents for every dollar spent on the film incentive program.
“Cultural retail” attractions – $23.3 million per year
The Mississippi Legislature passed Senate Bill 2463 in 2013, expanding the sales tax rebate program to include “cultural retail attractions.” Five shopping center projects in Southaven, D’Iberville, Pearl, Flowood and Ridgeland were approved under the program for a possible total of $233 million over the next decade to help pay for 30 percent of construction costs. In return for the rebate, Mississippi taxpayers get $1 million worth of Mississippi art, historic markers or audio-visual equipment or space for the MDA to promote tourism at the shopping center.
Stion Solar – $75 million
Mississippi taxpayers loaned Stion Solar $75 million in 2011 to build a plant in Hattiesburg that was supposed to create 1,000 jobs, but now offers only 200. According to the MDA, Stion is current on its loan payments.
That’s not the only controversial solar project that used taxpayer funds, as Twin Creeks Solar closed after only a few months in operation. The state was forced to settle for just a portion of the $26 million it loaned the solar panel maker.
KiOR – $75 million
The Mississippi Development Authority provided a $75 million no-interest loan in 2010 to now-bankrupt biofuel producer KiOR to build a $230 million plant in Columbus. The facility never met its production goals before shutting down in 2014. Equipment from the plant, designed to turn pine trees into gasoline, was sold to two firms for $3.8 million.
The state has filed a lawsuit against KiOR seeking return of the more than $69 million remaining on the loan.
Contact Steve Wilson at firstname.lastname@example.org