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New green energy plant goes against Gov. Tate Reeves’ tax cut plan

Tate Reeves may be trying to have his cake and eat it, too.

The Republican governor for years has proclaimed that the state should eliminate the personal income tax to entice people to move to Mississippi. But during his push this week to land legislative funding for a plant to manufacture electric vehicle batteries in north Mississippi, Reeves is now saying that residents of Tennessee, where there is no income tax, will come to Mississippi to work at the plant and decide to move here. He said nothing about the state income tax being a hinderance to their moving to Mississippi from a no-income tax state.

“There is a possibility that some of the employees may come from the state of Tennessee,” Reeves said during a press conference this week. “My expectation is they are going to come down to work for this particular company and see how great it is to live in Mississippi. I think you will see population growth because I do think you will see people moving from all over the country and in fact all over the world to work at this particular company.”

The Legislature did, in fact, approve the at least $350 million incentive package in a one-day special session.

READ MORE: Lawmakers pass $350 million deal to lure major green energy plant to north Mississippi

The plant will be located a stone’s throw from the Tennessee state line. There are multiple reasons, including the state’s generous incentive package, for the battery manufacturer to locate in Marshall County.


The transportation outlets available for the plant will be important. The plant will be located on the intersections of U.S. Highway 72 and state Highway 302, both which were four-laned years ago thanks to the forethought of the historic 1987 highway program. There also is a nearby railroad and major airport in Memphis that will be attractive to the companies building the battery plant. In addition, the plant location is near population centers in adjacent DeSoto County in northwest Mississippi and the rest of the Memphis metropolitan area in, yes, Tennessee.

People could actually continue to live in Tennessee, where there is no state income tax, and work at the plant, which means they would be required to pay a Mississippi income tax.

While Reeves is touting eliminating the state income tax, Bill Cork, the governor’s executive director of the Mississippi Development Authority, told legislators one of the many reasons the plant is a good investment for Mississippi is that the workers would be paying state income taxes — an estimated $160 million over 30 years, according to projections shared with lawmakers this week. If the income tax is eliminated, as Reeves wants to do, the state no longer would receive that tax revenue from the workers at the plant. A matter of fact, if Mississippi eliminates the income tax, theoretically Tennessee residents could travel the short distance to Marshall County to work at the plant, collect a paycheck, return home and never spend a dime in the Magnolia State.

Since the plant is located near (very near) the state line and is expected to employ Tennessee residents, the income tax is one of the most effective ways for the state to recoup some of its investment. More Tennesseans than Mississippians live within driving distance of the plant. Republican House members rejected Democrats’ efforts this week to ensure a majority of the workers at the new plant would be Mississippians.

The plant actually will be located in an area of the state that has repeatedly dispelled Reeves’ claim that eliminating the income tax would attract people to Mississippi. That might be true in some instances, but it should be noted that DeSoto County for years has been by far the state’s fastest growing county primarily because people have been moving from Memphis in Tennessee, where there is no income tax, to Mississippi, where there is an income tax — albeit one of the lowest in the country.

People have moved across the state line from Tennessee to Mississippi for a number of reasons. But Mississippi’s modest state income tax has not prevented tens of thousands of people from moving here from a state that, again, does not have an income tax.

As the governor said himself during the news conference, people will move to Mississippi because it “not only is an affordable place to live, but the quality of life is extremely high.”

And Reeves said that if Tennesseans who work at the green energy plant do not move to Mississippi, they at least will be paying the payroll tax to the state — unless, of course, he is successful in eliminating it later this year.


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