Why Mississippi Should Want Data Centers — Mississippi was first

PART 4 — We've Done This Before, and We Already Know How It Ends

Mississippi did not invent the data center boom. But we did help invent the modern state level subsidy model for industrial recruitment. During the Great Depression, Mississippi’s Balance Agriculture with Industry program became the first plan of its kind in the country. Other states copied it, and we have spent almost ninety years trying to win an arms race we helped start.

The story is worth telling, because the people writing checks in Jackson today sometimes act as if this is new. It is not.

Before Hugh White became governor, he was mayor of Columbia, Mississippi. During his time in office, White tried to bring industry to his hometown and to Marion County. He did it without state taxpayer money. He declared a holiday lasting two hours, called a community meeting, and asked local people to step up. Businessmen, secretaries, clerks, schoolteachers, and farmers signed promissory notes guaranteeing the funding for a factory building. With those pledges in hand, White used his own wealth and influence to secure a loan from New Orleans bankers.

The plant was built. The jobs came. The Columbia Plan became the talk of the state.

That, by the way, is much closer to capitalism than what Jackson does now. Local people put up local capital, of their own free will, behind a project they thought would pay off. No special session. No statewide tax holiday. No corporate welfare line item. The market, meaning actual citizens making actual decisions with their actual money, built the factory.

Then White ran for governor on the strength of the Columbia Plan. He won. And he immediately turned the model into something very different.

The 1936 Balance Agriculture with Industry program, BAWI for short, became Mississippi’s first major experiment in state directed industrial recruitment. Under the Mississippi Industry Act of 1936, local governments could offer subsidies, grants, loans, and tax relief to entice manufacturers from higher wage northern states to relocate here. There was just one problem: the Mississippi Constitution explicitly prohibited the state from using public credit to finance industrial development.

White had to assemble a panel of attorneys to engineer a legal workaround. They linked BAWI to the constitution’s general welfare clause and argued that industrial employment itself served the general welfare. Courts eventually upheld the arrangement. But that does not erase the larger point. Our state’s own founding document was written to restrain this kind of public credit scheme, and Mississippi found a way around it.

BAWI created a new kind of economic development politics. The state would help decide which companies to recruit, and local governments would be expected to finance the incentives. For the first time, Mississippi was not just setting the rules of the game. It was helping pick the players.

And here is the most telling part: Mississippi canceled BAWI in 1940. The program had brought some factories and some jobs, but not enough to settle the argument. Only twelve manufacturing plants relocated under the program. Critics argued that the job numbers were overstated, that displacement was ignored, and that the cost per worker was too high. A 1944 evaluation by economist Ernest Hopkins credited BAWI with some benefits, but warned that the program itself was not the “fundamental or decisive factor” behind many of the gains claimed for it.

Translation: the subsidy did not do the work the press releases said it did.

That should sound familiar.

What changed over the next eighty years was not the logic. It was the size of the deals.

The Nissan vehicle plant came to Canton in 2003. The plant is real. The jobs are real. Nissan has reported 6,400 workers and a $400 million annual payroll. But the subsidy was real too. State and local governments offered Nissan more than $1.3 billion in incentives, infrastructure, borrowing costs, and tax relief. Using Nissan’s own employment number, that works out to $203,125 in public subsidy per worker, more than three times the average annual payroll benefit per Nissan employee.

That does not mean the Nissan plant is bad. It means the public price of the plant matters.

And the job math matters too. An academic analysis by John Patrick Peavy found that 90 percent of the Mississippians employed at Nissan already lived and worked in the surrounding five county area when the plant opened. They were not pulled out of unemployment. Many were pulled away from other Mississippi employers. That is the part governors do not mention at ribbon cuttings. The new plant is what is seen. The existing businesses competing for the workers left behind are what is not seen.

Toyota in Blue Springs followed with a $354 million subsidy package. The plant opened, and it remains an important employer. But the indirect job promises used to sell the deal did not match reality. The state was promised 2,000 direct jobs and 6,300 supplier and indirect jobs. The direct job goal was met. The supplier and indirect jobs remained far below the projection.

Continental AG in Hinds County followed in 2016 with a roughly $600 million subsidy package, one of the largest in Mississippi history. That deal included state borrowing, state income and franchise tax breaks, local property tax breaks, and state income tax rebates. Again, the project was sold as transformational. Again, the public was asked to trust projections that almost no one would go back and audit years later.

There is a phrase the French economist Frédéric Bastiat coined in 1850 for exactly this: “that which is seen, and that which is not seen.” The plant in Canton is what is seen. The announcement ceremony is what is seen. The press release is what is seen. The Mississippi small businesses paying into the system, the public dollars not used elsewhere, the roads not repaired, the taxes not lowered, the local employers losing workers to a subsidized competitor, that is what is not seen.

The cumulative bill is staggering. According to research by Thomas Garrett and William Shughart in Promoting Prosperity in Mississippi, state and local governments in Mississippi have provided nearly $3.8 billion in tax breaks, grants, and loans to private businesses since 2000. That is roughly $1,300 for every man, woman, and child in this state.

Think about that the next time the state tells you it cannot afford something.

We could have cut taxes for working families. We could have made broad based business tax reform available to every employer instead of special deals for a few. We could have improved roads, ports, workforce training, and site preparation in ways that benefit every industrial user. Instead, we built a system where the public pays up front, the company gets the benefit immediately, and taxpayers are left hoping the projections come true.

The data center deals are not a new idea. They are the latest chapter of a ninety year old book whose ending we already know.

Amazon’s initial Madison County package included $44 million in direct subsidies and a $215.1 million state infrastructure loan, before counting longer running tax exemptions. xAI’s Southaven campus is eligible for Mississippi’s data center incentive program, which waives major state taxes for certified data centers. Compass Datacenters’ Meridian project includes data center tax exemptions, a $4 million site grant, and eligibility for Advantage Jobs rebates that can return up to 90 percent of employee state income tax withholding for qualified jobs.

Same script. Bigger numbers. Same ribbon cuttings. Same promises that this time, somehow, the subsidy will pay for itself.

There is a way out, and it is not nostalgia.

Not every modern project can be financed by passing around promissory notes at a courthouse meeting. A $20 billion data center is not a shirt factory in 1920s Columbia. But the lesson of the Columbia Plan still matters: private capital should bear private risk, local communities should have real accountability, and state government should stick to the basics.

Keep taxes low for everyone. Make permitting fast and predictable. Build infrastructure that serves more than one company. Protect property rights. Enforce environmental rules fairly. Make Mississippi an easy place to do business without making taxpayers silent partners in every corporate deal.

That is the conservative answer. Not because it is anti growth, but because it is the only kind of growth that can last.

We have one more chance to get this right with the data center boom. Our great grandchildren will inherit either the bill or the lesson. I would like, this time, for them to inherit the lesson.

Next week: "We Almost Lost the Right to Say No" — the federal preemption fight Mississippi narrowly survived in 2025, and the one coming next.