Mississippi has proved to us all that austerity, or the political ideology of "government living within its means," is a farce. All austerity means is taking money away from public services, and giving it to private business. Mississippi Governor Phil Bryant and the GOP-led legislature illustrated that perfectly in two ways.
Since 2008, Mississippi has violated a constitutional mandate to adequately fund the state's public K-12 schools. The Mississippi Adequate Education Program, or MAEP, was established in 1997 to make sure a proper portion of taxes went to fund schools. A community's ad valorem taxes will cover up to 27 percent of the cost, while the state covers the rest. The state's contribution is essentially the base student cost times the daily attendance in a certain school district. The mandated amount would be readjusted every five years for inflation. Mississippi has spent $648 less per student than it did in 2008. Currently, Mississippi has underfunded its public schools by at least $1.3 billion.
In May of last year, the United Auto Workers released a study showing that Nissan's Canton, Mississippi, plant was getting $1.33 billion in tax breaks from the state in return for Nissan's promise to provide Mississippians with good-paying, full-time jobs. $850 million in tax breaks would be spaced out over a 30-year period, with $400 million in cash aid. Mississippi would even pay $90 million in interest on the debt incurred to reward Nissan with its lavish tax breaks. Mississippi has already given $378 million to Nissan, which paid for its access roads, water usage, and worker training. Nissan also gets to keep $160 million in income taxes from workers over the next 25 years, which would normally have gone to Mississippi's public programs. No employer has gotten that sweet a deal from any state government.
However, out of all 5,200 workers at Nissan's Canton plant, most of them are employed by temp agencies. Regular, full-time employees are paid over $23 per hour and have benefits, but the temp workers at the Canton plant are often hired for just half that amount, given no healthcare, retirement, benefits, or paid time off, and have very little job security. The automaker has even issued a 5-year wage freeze for its Mississippi workers even as the company pocketed $3.3 billion in profit last year. Nissan likes to brag that it never lays people off, yet they don't count temp workers who have been let go. While many other Nissan plants have unionized workforces, Nissan has indirectly threatened to close its Mississippi plant for good and move out of state if its workers organize.
While Mississippi is paying for a giant chunk of Nissan's subsidies with the exact amount of money it cut from schools in the last six years, the state is actually following a nationwide trend. According to the Center on Budget and Policy Priorities, a nonprofit think tank, most states are funding schools even less than they used to before the global recession, which officially ended in 2009. Out of the 35 states following this trend, ten of those states have cut education by more than 10 percent. And despite modest increases in their tax revenues, 15 states are providing less funding per student than they did last year.
Nor is Nissan alone in their greed-inspired quest for huge tax breaks without fulfilling their promises to create jobs. A New York Times database from 2012 shows that over 150,000 state-based tax handouts to private businesses amount to $80.4 billion each year. Many of these corporations, like General Motors, took these handouts, and then shuttered operations a short time later. New Jersey Governor Chris Christie has awarded over $2 billion in tax incentives during his tenure. That's more under just one governor than in the combined tenures of all of New Jersey's governors since 1996. But despite the handouts to corporations, New Jersey's job growth is still lagging behind the rest of the nation. As of December of 2012, New Jersey had only restored half of the private sector jobs lost since the start of the recession.
States all over should have already realized that since globalization has sent manufacturing jobs overseas, real job growth lies in highly-skilled, technical industries. And to attract those employers, a state needs to have an educated workforce ready to take on those jobs. Unless states stop the disturbing trend of cutting education funding in favor of giving big tax breaks to any corporation that asks for them, their economies will only get worse.
This article originally appeared on Reader Supported News.