Gov. Tate Reeves called for an unprecedented second special session during the first month of the regular session of the state legislature that opened January 2.
On January 23, just two days before the second special session was to begin, Reeves got lawmakers’ attention when he announced that a $10 billion high tech business development deal for two hyperscale data sites in Madison County was in the pipeline. He urged the 122-member House and the 52-member Senate to meet in extraordinary session to support what would be “the biggest business investment in state history” once agreement was reached on the rather modest incentives and other conditions.
As in the first special session, Reeves didn’t name the business while waiting for the House’s and Senate’s blind approval, despite some lawmakers’ questions about the rush Gov. Tate Reeves called for an unprecedented second special session during the first month of the regular session of the state legislature that opened January 2.
On January 23, just two days before the second special session was to begin, Reeves got lawmakers’ attention when he announced that a $10 billion high tech business development deal for two hyperscale data sites in Madison County was in the pipeline. He urged the 122-member House and the 52-member Senate to meet in extraordinary session to support what would be “the biggest business investment in state history” once agreement was reached on the rather modest incentives and other conditions.
As in the first special session, Reeves didn’t name the business while waiting for the House’s and Senate’s blind approval, despite some lawmakers’ questions about the rush and the secrecy overshadowing the project. Secrecy has enshrouded all three of the last special sessions called by the governor that have committed the state to pay a total of over a half-billion dollars in incentives.
It was only after the legislature passed the three required bills to approve the project on January 25 that Reeves revealed the name of the company – Amazon Web Services (AWS). AWS is a subsidiary of packing and shipping giant Amazon.com of Seattle.
AWS is concerned with the fast-growing cloud computing services business and not with Amazon’s packing and shipping side. AWS is leading the field in cloud computing services. It markets its vast horde of data and services to businesses at all levels, from start-ups to the Fortune 500.
“Today,” Reeves said, “Mississippi is preparing to finalize the largest economic development project in our state’s history, a $10 billion private sector investment that will create 1,000 high-paying, high-tech jobs. I appreciate our legislators for quickly considering this historic project.”
An AWS “hyperdata” center promises to bring a $10-billion business operation with over 1,000 high-paying jobs to separate Madison County sites near Canton and Tougaloo. The state will provide $44 million for special training and related education. The state will also provide Madison County with $215 million in infrastructure loans.
The Magnolia Tribune reports AWS also will have a 10-year corporate income tax exemption, a 3.15 percent rebate on construction costs, a 100 percent exemption from sales and Use Tax on equipment, and a 30-year rolling state tax exemption. The project is expected to be fully staffed and in operation by 2027.
The mystical Internet “cloud” consists of the enormous mass of computer data stored in Internet servers around the world instead of relying on local hard drives and private datacenters.
AWS leads the field in cloud computing services, commanding 32 percent of the global market. Its two closest competitors are Microsoft Azure at 19 percent market share, and Google Cloud with 7 percent.
AWS services are available to all businesses and are grouped into three main service categories: (1) Infrastructure services, (2) platform as service, and (3) software services.
AWS parent company Amazon.com, the giant packing and shipping operation, has been a vital part of Mississippi’s business environment since 2018 with the opening of its first fulfillment center in Marshall County with a workforce of 850. The company opened its second fulfillment center in Olive Branch in 2019, creating 500 jobs with a million-square-foot facility designed to ship large items. In 2021, Amazon opened its third fulfillment center in Canton. It was the company’s first Mississippi facility to use robotics along with regular employees.
POSITIVE VIEWS
Just as all but three of the legislators decided to vote for the incentives, at least one former state government executive agreed with the decision to give life to the AWS project. Gary Anderson, former executive director of the Department of Finance and Administration, sat in the Senate gallery on the day of the vote and viewed it as a good move for the state.
“From what I’m gathering, after listening to both the House and Senate discussions, it is a very significant, new high-tech entity that’s going to be here.” Anderson said. “When you hear the governor talk about the $10 billion value of the plants, and if we go ahead and put everything in place, it’s going to be beyond its original $10 billion value. It’s supposed to provide services and job opportunities to the states all around us and not just to Mississippi. And I hope that with 1,000-plus new employees, we’ll have a good amount of people from Mississippi to obtain those jobs.
“It’s a real high-tech operation, I understand,” he said. “That means that people are going to have to get ready and get the special skills they’ll need for this new opportunity.”
Anderson has been a lobbyist for Marshall County for 15 years, with his county being the site of the recently financed electric vehicle battery plant adopted in the first special session of the 2024 legislative session.
“We’ve really accelerated our economic development efforts in Marshall County from 2014 till now,” Anderson said. “With the new company bringing in the electric battery production, the county is sitting at the heart of our Chickasaw Trail Industrial Park. We have a number of good industries there already—Volvo, Amazon, and other reputable companies. This, along with the battery production plant, will be by far the largest deal we’ve had there.”
He has witnessed the economic upturn that has come with the increasing number of businesses locating in Marshall County.
“Things had been slow especially at the turn of the 21st Century,” he said. “During the time I was with the Department of Finance and Administration, we were able to give some resources to Marshall County to help develop a new economic plan. That was in 2003. Things began to happen, but they didn’t happen too fast. It was in 2014, when we got Volvo there, a major key business, that the economic scene really began to build up. And it’s been moving up ever since.”
House Dist. 36 Representative Karl Gibbs of West Point voted in favor of the economic promises of the two special sessions, although his district is a good distance from the electric battery factory in Marshall County and the AWS high tech centers coming to Madison County.
“This is a good project for the state as a whole,” said Gibbs. “And it’s going to be just as good for the economy of my district. I’m sure that some of the people from my area in north Mississippi will be attracted to the new developments that are happening in Madison County.
Gibbs said he was not worried about the reduced revenue the state might see as a result of the governor’s push to eliminate state income taxes, although income taxes make up one-third of the state’s revenue. Nor is he troubled by the elimination of the business taxes that took place over the last few years. But given the loss of these two revenue streams, will the state have enough money to finance these new business deals?
“The state has the money to do whatever it is they need to do,” Gibbs said. “I’m in north Mississippi. And the new factories might induce the people from my district to move down here to get a job. I don’t know. But we have a lot of jobs up there where we are also. So, I don’t know whether the Madison County project will directly affect the people of my district.”
LABOR QUESTIONS
Long accustomed to being left out of the conversation when new economic projects are proposed for Mississippi, the state’s labor unions frequently question the cut-and dried, semi-secret nature of the agreements between the state authorities and the new business executives.
Mississippi AFL-CIO President Robert Shafer says the trio of the governor, the lieutenant governor, and the speaker of the house wield power as “a gang of three.” They maintain a tight control over these special economic and business developments and rarely bring other important state actors into the discussion before it’s time to take a vote, Shafer said. The NGO’s, the community organizations, and the unions are rarely invited to take part in the discussion.
“In fact, the poor legislators don’t know anything about it either before they are asked to vote for the enterprise,” Shafer said.
“I don’t know enough about the AWS to make a valid statement. Everybody wants people to have job opportunities. But how much are you paying for a job? If you divide those 1,000 jobs into $10 billion, how much are these jobs costing the taxpayers? Some companies are good companies. They pay good salaries and benefits. But we don’t know enough about them yet to say anything. We don’t know who they are. Unions and union leaders don’t get a seat at the table. And if you don’t have a seat at the table, you’re on the menu.”
Shafer came to the capital area from northeast Mississippi in 2001 during the negotiations on funding the Nissan plant in Canton. The unions were seeking to have a part in the discussion. But the state executives pushed the legislature into voting to accept Nissan’s terms before the copies of the bill authorizing the plant were actually printed, Shafer said.
“The way the state of Mississippi operates, you’ve got three people who run everything – the governor, the lieutenant, and the speaker of the house. The first thing I learned when I came down here was that I wouldn’t get anywhere trying to lobby the legislators. I finally cornered one and told him this whole political process is bunk. I told him I can accept the truth, but I can’t accept all the falsehoods and sneakiness. He said to me, ‘Robert, the truth is that I can’t help you on anything unless the speaker tells me.’ Now this man was the chairman of the labor committee, but he had no power at all.
“If there’s any federal money involved in these projects,” Shafer said,” I’m going to raise the issue with Washington. I’m sure that the $32 million designated for training money comes through the federal system. I want the union to have some say so in it. We have well-trained crafts people already trained here. We’ve got union training programs here that don’t cost the state anything. We’ve got Electrical Workers of Local 480 and we have the Pipefitters’ local. We’ve got skilled crafts people all over the state, but too much of the time they have to leave the state to find work.”
“Look at the new business incentives the legislature just passed, yet no one even knew the name of the business,” Shafer said. “I guess the governor feels that if he gives us too much information it’ll drive us crazy.”
EARLIER SESSIONS
On Monday, October 31, 2022, Reeves sent a letter to all legislators setting a Special Session for November 2, while touting, “Biggest economic development project in MS history is coming to Golden Triangle.” Reeves said he had signed a nondisclosure agreement. Nevertheless, he wanted the legislators to approve the $246 million incentive package he had put together for the unnamed business located in Lowndes County, Mississippi.
The business turned out to be Steel Dynamics, Inc. and its subsidiaries that planned to invest $2.5 billion in Mississippi, Reeves says. Steel Dynamics broke ground on a recycled aluminum flat rolled mill on March 7, 2023. The project promised to bring 850 new jobs to the Golden Triangle.
The state of Alabama, however, was somewhat ahead of Mississippi in announcing a much better deal for an aluminum processing mill that it had obtained for its residents from Germany-based Novelis, the world’s largest aluminum recycling center. Alabama was giving up only $2.5 million in incentives, about one percent of the money Mississippi was about to sign off on for its project. Alabama announced its plans in May 2022, and Mississippi announced in October 2022.
BATTERY PLANT
Then came the special session on January 18, 2024. “The Project Poppy Fund,” a $1.9 billion plan that would actually cost the state $482 million with additional bond support and other adjustments. Rushing the House and Senate through a special session vote on the E V Battery project, Reeves waxed ecstatic when the House voted 117-2 to adopt the bill and the Senate voted 50-2 in favor.
Reeves called the battery factory “the largest payroll commitment and the second largest capital investment in Mississippi’s history.” What the Mississippi taxpayers got in exchange for their generous gift is a $1.9 billion electric vehicle battery production plant destined for Marshall County’s Chickasaw Trail Industrial Park, with the promise of 2,000 new jobs paying $66,000 each annually. The plant is projected to go into full production before 2027, with “clawbacks” if it’s not completed by 2029.
A week later, the special session for the AWS $10 billion hyper-text data center for Madison County, convened on January 25. Reeves also touted this as “the largest business investment in the history of the state.” The House and Senate spent less than half a day deliberating before voting in the measure. Both Mississippi and Madison County taxpayers are obligated to provide a comparatively modest $259 million for training and infrastructure needs for this project.
LEGISLATORS SPEAK OUT
The legislators who ultimately decided the fate of these projects were from all across the political spectrum, Republicans and Democrats. Some were enthusiastic; however, a great number of the lawmakers remained skeptical or reasonably hesitant to embrace the deals on such quick notice.
Democratic House Minority Leader Robert Johnson III of Natchez said the people of Mississippi will pay a lot more than the $350 million the governor’s figures showed for the electric vehicle battery plant in Marshall County.
“Actually, the whole package is about $529 million,” Johnson said. “That’s the best number we got. We’re financing the company. We’re doing over $482 million in bonds and the rest of it will be appropriations and grant programs. I don’t know why the governor came out and said that it would be $350 million.”
“The thing that people ought to be concerned about is that we don’t have any assurances that the jobs will go to Mississippians. I wanted to offer an amendment that would require them to hire Mississippi people, that at least 70 percent would be Mississippi people.”
Johnson had submitted two amendments that were voted down by the Republican supermajority.
“The governor eliminated a supplemental school nutrition program while saying that he did not want to expand the welfare state,” Johnson said. “But we’re giving money to a cash-rich corporation. That’s corporate welfare. Feeding children is not welfare. Feeding children is performing a public service for people you represent.”
“Since the new companies won’t have to pay any property taxes or ad valorem taxes, they should, in lieu of taxes, have a commitment to invest in the community. Give money to schools and to roads. From the money that we give them and the money they make, they should reinvest in that community.”
District 52 Representative Bill Kinkade of Marshall County represents the site of the proposed new plant and is gung-ho on the special session vote.
“We worked on this project for well over a year and it’s been vetted very, very well,” Kinkade said. “This is a huge economic project. It’s transformational. This will create generational jobs, manufacturing type jobs.
“Mississippi is on a great track. Education is improving dramatically. And I think we’re in the best shape we’ve been in that I can recall during my time in the legislature. I’ve seen a lot of positives. Every economic development we’ve brought forth during my tenure, or in special session, has been positive.”
Fifth district representative John Faulkner of Holly Springs also represents the area in Marshall County where the new plant is located.
“This is a very exciting time not only for Marshall and surrounding counties, but for the entire state,” he said. “Whenever you can land an economic project that could employ 2,000 people and pay an annual salary of over $60,000, that’s a gamechanger. I think the impact from this project will be felt throughout the entire state.
“But by no means will we lose sight of these other big ticket items that we’ve been fighting for years. We will continue to try to find funding for them as well.”
The legislature returned to regular session Monday.
