Here's a full summary of Hopkins' pitch for the project.
But this comment jumped out:
I was told to expect other steel producers to begin to spend big dollars to attempt to kill an Amendment 82 approval by the General Assembly.
He raises a question that has lingered from the beginning. What do existing steelmakers in Mississippi County, who received no direct state subsidies or investments, think of the state providing a significant financial help to a potential competitor? Big River CEO John Correnti has said the overlap in competitive products will be small. About 20 percent of production, he said.
I checked yesterday and found that the state has contributed the usual investment tax credits for new jobs at the existing steel mills and a relatively paltry sum — $500,000 versus the $10 million promised Big River — to train workers, but there's no record of direct subsidies. Back when those mills started, the state didn't have a constitutional amendment that allowed pledging general revenues to debt for private enterprise.
It's going to be interesting to see how the new Republican majority eventually responds to government business investment, particularly if an in-state competitor steps forward with objections. I notice that the Koch-sponsored Americans for Prosperity, normally a clarion for the free enterprise system and reductions in government spending, has been silent to date on this project.
UPDATE: Got a succinct response from AFP to my question about for/against this state assistance.
UPDATE II: People in Mississippi indicate electric rates prompted Big River CEO John Correnti to "stomp his feet" and take a project proposed first there to Arkansas. This article is interesting because several in Arkansas had said the project would go to Mississippi without subsidies here and, on another metals project, Mississippi didn't appear so easy with money:
Officials with Mississippi Development Authority would not comment on where the company was looking to build its facility. The MDA also said that while no incentive money had been given to Silicor, the MDA's incentives remained on the table if the company found a suitable site in the state and got its financing together.
But Correnti and other investors could have difficulties obtaining financing. Lt. Gov. Tate Reeves wants to limit the amount of incentives the MDA can issue.
"The Mississippi Senate passed a bill last year that would have limited the amount of funds the Mississippi Development Authority could loan to businesses without legislative approval or oversight from the current level of $468 million to $50 million," Reeves said. "Unfortunately, the House Ways and Means Committee did not consider the measure. "I will push for this bill again because I believe there should be legislative oversight into large economic development projects.
"I am comfortable giving MDA the authority to spend up to $50 million without the Legislature's input to help close deals and bring jobs to Mississippi. I do not believe MDA needs $468 million at their disposal through the Industry Incentive Revolving Loan Fund to give to whatever projects they feel the need to fund. I voted against the Revolving Loan Fund when I was a member of the Bond Commission because I had those same concerns."
Gov. Phil Bryant has also suggested the state stop giving incentives for start up companies, especially green energy companies.
UPDATE III: I still can't reach anybody from Nucor or Nucor-Yamato firsthand, but other people who buy steel from them in the area for further processing tell me that the industry is running at about 75 percent capacity now. The prediction from processors is that Nucor won't warmly welcome a competitor with $125 million in state support. Hopkins confirms that he expects some Nucor opposition, but he says competition will be minimal and that the new mill will be aiming to serve a sector of the market for higher grade products than what local mills produce.
He hated American Beauty because the Kevin Spacey character hit too close to home.
This gives me the feeling of having eaten a bad oyster.
Thanks, Outlier, for those links. You may be aware, but many are not, how perfect…
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