Gift horse | Arkansas Blog

Monday, March 5, 2007

Gift horse

Posted By on Mon, Mar 5, 2007 at 2:27 PM

A columnist in Laurel, Miss., has the moxie to question whether Mississippi is laying out too much taxpayer money to land auto plants, like Toyota.

We know the direct subsidy is $350 million right off the bat. That’s the amount Mississippi will borrow to aid the Toyota plant. State officials have yet to disclose the amount of future tax breaks. If the Nissan plant is a guide, the total subsidy will be about a half billion dollars.

That’s a big chunk of change for 2,000 guaranteed jobs. State officials are already hinting the final job number may be close to 4,000 but that’s wishful thinking. Since auto companies have been able to effectively sell jobs, it’s doubtful they will deliver any more than their contractual obligation.

So let’s look at the math: a half billion divided by 2,000. That comes to a whopping $250,000 per job.

At that cost, Mississippi could just hold a lottery and give 2,000 people $250,000 a piece. The lucky winners could invest it in mutual funds and make $25,000 at a 10 percent return. Even if the lucky winners took jobs flipping burgers, they’d still make more money than the $20-an-hour top wage promised by Toyota.

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