Northern Mississippi economy on the rise

By Jacob Batte

Despite the struggling economy, recent polling numbers collected by the Mississippi Economic Council suggest that business and community leaders around Mississippi are optimistic about the state’s long-term growth potential.

The poll found that nearly eight out of 10 interviewees believed that Mississippi could experience the same kind of growth over the next 10 years that other Southern states like Georgia and North Carolina have enjoyed.

“Throughout the state, we’re seeing a real belief that there are opportunities to grow,” said Scott Waller, senior vice president of public affairs for the Mississippi Economic Council.

Unlike many parts of the state, North Mississippi has already begun to show signs of this anticipated growth.

Max Hipp, president and CEO of the Oxford Chamber of Commerce, said that there are pockets of places all across the country that are really hurting, but that Northeast Mississippi is poised for future growth.

“People are going to be seeking out places that are desirable to live, where there’s a quality of life, a variety of housing, a variety of job opportunities and we’ve been recognized as a place of economic strength for our size,” Hipp said. “Most people feel very positive around here about our future.”

In fact, Oxford was recently recognized as one of the top “micropolitan” cities in the United States. Policom, a company that specializes in studying localized economies, evaluated these cities, whose populations range from 10,000 to 50,000.  They ranked Oxford 26th out of 576 qualifying cities based on its consistent growth.

Christy Knapp, Oxford Chamber of Commerce’s executive vice president, said that it’s important for Policom to target that size of a particular grouping.

“There’s a lot that’s going on in smaller communities,” she said. “I would point to (local business) FNC as an example. Their clients are not here in Oxford, they’re all over the country. We’re glad they decided to stay.”

Knapp said that Mississippi is blessed to have Gov. Haley Barbour’s focus on economic development.

“He has been a key player and a key driver in helping to attract some of the projects that have come here,” Knapp said. “I think maybe that’s why people are feeling encouraged that our future elected officials and legislature will continue along that vein.”

In addition to Oxford, other parts of North Mississippi are also showing strong growth. Tupelo scored highly on the Policom rankings, falling just outside the top 100. Olive Branch was listed at No. 1 on Business Week’s ranking of the fastest growing cities in America from 2000 to 2010.

The many large corporations setting up manufacturing sites in North Mississippi also create strong job growth regionally. In addition to the well-publicized Toyota factory, lesser projects like Oxford’s Winchester plant can be strong drivers of growth for local economies.

“With Winchester coming on, we can look forward to another 1,000 jobs in the next five years along with 500 spin-off jobs,” Hipp said. “We’re talking a huge economic impact to the region of about $50 million.”

Despite many positive indications of growth and development, some Mississippians think the state has a long way to go before it can achieve the meaningful growth predicted by the respondents of the Economic Council poll.

Ole Miss economics professor William Shughart said Mississippi has barriers it must overcome before it can expect any kind of substantial growth. He has a different view than many Mississippians on the state recruiting large firms to operate here.

“We’ve got to get away from the mindset that you hand out favors to special firms, give them breaks, whatever,” Shughart said. “These economic development incentives are very costly and there’s no real evidence that they pay off in the long run.”

Shughart said he would rather see the state reduce regulations and taxes on all businesses instead of offering preferential treatment to a select few.

“If we cut the regulatory and tax burden on business, they would come,” he said. “If property tax relief and sales tax relief is good for Nissan and Toyota, it should be good for everybody else, too.”

Another issue raised by Shughart is Mississippi’s reluctance to do away with its inventory tax. In addition to more traditional taxes, each business is required to pay a percent of the value of the inventory they hold at the end of each year. This can deter companies that warehouse or distribute goods from operating in Mississippi.

Mississippi’s economy has many bright spots that are showing signs of improvement. However, Shughart said the state’s education problem is deeply rooted and will ultimately hinder the success of the state.

“Until the public education system starts doing a better job, we’re going to have trouble growing because the number one thing that businesses look for when they’re relocating is an available, trained or trainable, work force,” he said. “We just don’t have that.”

Despite the problems facing Mississippi, Hipp said he believes the state’s long-term growth is inevitable.

“When you think about it, the Carolinas grew like this 30 and 40 years ago,” he said. “People from the North were looking for places to go where they could operate cheaper and get away from the hustle and bustle, so they went south. As a guy from Ohio told me one time, Mississippi is still a frontier.”