MISSISSIPPI SPOTLIGHT
continued...
SS: Which business taxes would you like to see altered or eliminated in order to lower the cost of doing business in Mississippi?
Barbour: Mississippi has relatively high taxes on consumption. We have a 7-percent sales tax on essentially all goods, and that's a very significant part of our revenue. Our corporate income tax and our individual income tax both top out at 5 percent. Sometimes in incentive packages we are able to deal with taxes, to reduce taxes on income and property for instance. But right now in our budget situation we are trying to get our budget back under control. Last year, we had a $720-million shortfall between general fund spending and recurring general fund revenues, and we made it up by raiding special funds, by not funding the rainy day set-aside. In this year's budget, we have reduced that amount about $410 million with no tax increases. So rather than looking right now for tax reductions, my focus is on getting our spending back within the revenue produced by our current tax structure. I am against raising anybody's taxes - business taxes, individual, consumption or otherwise. Raising taxes is the enemy of controlling spending. We're focusing on trying to get
spending down, but we're not thinking much right now about tax reductions
so much as we're trying to make sure we don't have tax increases. I
don't think from the business community side our tax structure is a
disincentive. Everybody would like to have lower taxes and some states
don't have any income tax. But generally, our tax structure is not a
barrier.
SS: Much is made of the importance of a strong education infrastructure - both higher ed and K-12 - as being central to economic development. What specifically needs to be done in Mississippi to maximize that synergy?
Barbour: We have increased spending in K through 12 very significantly in the last 10 years and particularly in the last five years. And we are starting to see improved results. To improve educational outcomes, the most important thing is quality teachers in the classroom. Teachers matter the most, and we should focus our spending on instruction and the classroom, which is why I supported teacher pay raises; this year my budget will do that again. It also will include more money for instructional materials, textbooks and supplies. Savings can be found on the administrative side. In Mississippi, education is our highest priority. Sixty-two percent of the general budget gets spent on education, and that is appropriate. Nearly 50 percent is spent on K through 12. At the same time, we have got to reduce non-instructional spending. We in Mississippi have never embraced lifelong learning. The passing of the work-force development and job training reforms [in 2004] is the first step in our embracing lifelong learning.Our universities and community colleges are economic development gold mines. We just have to learn how to mine them better. The community colleges particularly have untapped potential in work-force development. Our universities can do much more to be supportive of economic growth. The best example is the Polymer Institute at the University of Southern Mississippi. It is a magnet for companies that are doing research in or manufacturing products associated with polymers. We can do a lot more of that. All our universities are becoming much more focused on that. Our workers have to continue skills training. Our people work hard, but we have to teach them to work smarter.
SS: Does state government have a role in industry cluster development?
Barbour: Success begets success. The state does have a role. We talked about the polymer center. We also have a cluster that has arisen because of Nissan's building this very large, extremely modern plant in Canton. And we've talked about Textron and Faurecia. Interestingly, neither of them does business with the Nissan plant in Canton, at least not yet. But the Nissan plant means that the western boundary of the southern automotive manufacturing zone is expanded to Interstate 55 in Mississippi. Therefore, these areas in western Mississippi became attractive to those companies. There are some very significant suppliers to Nissan in the delta and in Vicksburg. That is a very important cluster. The forest products industry and agriculture will both be important to Mississippi as long as you and I are around, regardless of what happens in technology and automotive and composites, because we are an enormous producer of agricultural products and we have enormous amounts of timber. We are learning more about adding value. Thirty thousand people work in our furniture manufacturing industry in Mississippi, which is somewhat related to timber. We are looking all the time not only for proven clusters like auto, but also opportunities in value-added processing of agriculture and forestry products.
Something we have to be very careful about as a state is that we don't over-target, because we have a very diverse state. Metropolitan Memphis now includes some counties in Mississippi, and is one of the most developed distribution centers in the world, with Federal Express but also the railroads, the highways and air transportation all coming together there. Distribution is a really important industry there for job creation. A lot of people don't think about retail as economic development. But it is, because if we can get people to come shop in Mississippi, spend money here, that's new money. For the last 100 years, people would go and shop in Memphis. They got our tax money. That's changing.
Clusters are important, and the state has to be cognizant and when you get success, build on it. But at the same time, the size of our state and the diversity of our economy is such that we have a number of things we're trying to grow at the same time, and there is enormous potential for success, and even a certainty of success. It's just a question of how much. We are on the front edge of a rising tide in the national economy. I believe Mississippi has more opportunities than most states to take advantage of it.
 |
| ALL SYSTEMS GO: A bevy of corporate and government officials gathered in Greenville, Miss., in October 2004 for the grand opening of a new $35-million, 308,000-sq.-ft. (28,613-sq.-m.) plant for Textron Fastening Systems. Many of the plant's initial 350 employees went through training classes conducted by Textron in partnership with the Delta Community College vocational traning center. From left to right, U.S. Sen. Trent Lott, Greenville Mayor Heather Hudson, Textron Fastening Systems President Rick Clayton, Mississippi Gov. Haley Barbour, U.S. Sen. Thad Cochran, Textron Fastening Systems Executive Vice President of Global Operations Bob Simpson, U.S. Rep. Bennie Thompson and Washington County Board of Supervisor President Al Rankins. |
Barbour: Mississippi has relatively high taxes on consumption. We have a 7-percent sales tax on essentially all goods, and that's a very significant part of our revenue. Our corporate income tax and our individual income tax both top out at 5 percent. Sometimes in incentive packages we are able to deal with taxes, to reduce taxes on income and property for instance. But right now in our budget situation we are trying to get our budget back under control. Last year, we had a $720-million shortfall between general fund spending and recurring general fund revenues, and we made it up by raiding special funds, by not funding the rainy day set-aside. In this year's budget, we have reduced that amount about $410 million with no tax increases. So rather than looking right now for tax reductions, my focus is on getting our spending back within the revenue produced by our current tax structure. I am against raising anybody's taxes - business taxes, individual, consumption or otherwise. Raising taxes is the enemy of controlling spending. We're focusing on trying to get
| "The people that elected me more than anything else expect me to help with job creation. We are very focused on that." |
SS: Much is made of the importance of a strong education infrastructure - both higher ed and K-12 - as being central to economic development. What specifically needs to be done in Mississippi to maximize that synergy?
Barbour: We have increased spending in K through 12 very significantly in the last 10 years and particularly in the last five years. And we are starting to see improved results. To improve educational outcomes, the most important thing is quality teachers in the classroom. Teachers matter the most, and we should focus our spending on instruction and the classroom, which is why I supported teacher pay raises; this year my budget will do that again. It also will include more money for instructional materials, textbooks and supplies. Savings can be found on the administrative side. In Mississippi, education is our highest priority. Sixty-two percent of the general budget gets spent on education, and that is appropriate. Nearly 50 percent is spent on K through 12. At the same time, we have got to reduce non-instructional spending. We in Mississippi have never embraced lifelong learning. The passing of the work-force development and job training reforms [in 2004] is the first step in our embracing lifelong learning.Our universities and community colleges are economic development gold mines. We just have to learn how to mine them better. The community colleges particularly have untapped potential in work-force development. Our universities can do much more to be supportive of economic growth. The best example is the Polymer Institute at the University of Southern Mississippi. It is a magnet for companies that are doing research in or manufacturing products associated with polymers. We can do a lot more of that. All our universities are becoming much more focused on that. Our workers have to continue skills training. Our people work hard, but we have to teach them to work smarter.
SS: Does state government have a role in industry cluster development?
Barbour: Success begets success. The state does have a role. We talked about the polymer center. We also have a cluster that has arisen because of Nissan's building this very large, extremely modern plant in Canton. And we've talked about Textron and Faurecia. Interestingly, neither of them does business with the Nissan plant in Canton, at least not yet. But the Nissan plant means that the western boundary of the southern automotive manufacturing zone is expanded to Interstate 55 in Mississippi. Therefore, these areas in western Mississippi became attractive to those companies. There are some very significant suppliers to Nissan in the delta and in Vicksburg. That is a very important cluster. The forest products industry and agriculture will both be important to Mississippi as long as you and I are around, regardless of what happens in technology and automotive and composites, because we are an enormous producer of agricultural products and we have enormous amounts of timber. We are learning more about adding value. Thirty thousand people work in our furniture manufacturing industry in Mississippi, which is somewhat related to timber. We are looking all the time not only for proven clusters like auto, but also opportunities in value-added processing of agriculture and forestry products.
Something we have to be very careful about as a state is that we don't over-target, because we have a very diverse state. Metropolitan Memphis now includes some counties in Mississippi, and is one of the most developed distribution centers in the world, with Federal Express but also the railroads, the highways and air transportation all coming together there. Distribution is a really important industry there for job creation. A lot of people don't think about retail as economic development. But it is, because if we can get people to come shop in Mississippi, spend money here, that's new money. For the last 100 years, people would go and shop in Memphis. They got our tax money. That's changing.
Clusters are important, and the state has to be cognizant and when you get success, build on it. But at the same time, the size of our state and the diversity of our economy is such that we have a number of things we're trying to grow at the same time, and there is enormous potential for success, and even a certainty of success. It's just a question of how much. We are on the front edge of a rising tide in the national economy. I believe Mississippi has more opportunities than most states to take advantage of it.
