Flashback: Mississippi Breaks Past Alabama into Automaking
Former Senate Majority Leader Trent Lott, R-Miss., left, and Carlos Ghosn, president of Nissan Motor Company Ltd., right, confer during a meeting April 4, 2001 in Washington, D.C.
AP Photo/U.S. Sen. Trent Lott Press Office, Lee Youngblood
Big stakes sour grapes were the subject of “Why Not Drop the Big One?” — a feature in the February 2001 issue of Business Alabama.
Alabama was chaffing over the recently announced loss to Mississippi in the final round of the contest to land a $930 million Nissan plant that went to Madison County, Mississippi rather than a site in Opelika.
Unfair and unprecedented, said some, were Mississippi U.S. Senator Trent Lott’ s last minute efforts to have the Mississippi site designated a “renewal community,” qualifying it for a 15 percent payroll tax credit and 10-year deduction for construction costs.
“It is wrong to utilize federal tax policy to favor one state over another in an industrial development competition,” said Alabama’s junior U.S. Senator Jeff Sessions, the loudest critic of Lott’s proposal.
Mississippi was last up in the South’s race to be the home of U.S. auto manufacturing. Alabama already had three plants — Mercedes and Honda assembly plants and an engine plant for Toyota — and would land the Hyundai assembly plant later in 2001.
Although Lott’s proposal did not pass in the Senate, prospects that it might be successfully revived, said some, could have contributed to the Nissan decision.
More decisive, certainly, was the size of the wad of cash Mississippi offered on its own. Mississippi won Nissan with $295 million in state and local incentives, a package that legislators approved in a one-day special session called by Gov. Ronnie Musgrove. Details of the bid were not available in February 2001 but were reluctantly revealed by Mississippi officials in the following months. Alabama’s bid — the way with those unsuccessful — was never disclosed.
At $295 million, Mississippi’s official reckoning of the total did not include jobs tax credits, fees in lieu of franchise taxes, tax exemptions on machinery and construction materials or a generous “Advantage Jobs” program offering up to 90 percent rebates on state payroll tax withholdings.
Two years later, while the plant was still under construction, the Mississippi Legislature added another $68 million in state incentives to Nissan.
The watchdog group Good Jobs First, in a May 2013 study titled “A Good Deal for Misssissippi?” estimates that incentives going to Nissan totaled $1.3 billion.