MSU study says area will feel loss of IP closing for years

Published 12:00 am Monday, February 10, 2003

NATCHEZ &045; An independent study by Mississippi State University’s Extension Service confirms what Adams County residents already knew

&045; that the community will

&uot;feel the loss of International Paper for years to come.&uot;

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Natchez City Clerk Donnie Holloway asked Dr. Al Myles, a specialist at the extension service, to prepare an estimate of the economic impact of IP’s upcoming closure on city revenue.

That study, Holloway said, can help him plan and budget for the future.

Myles based his study on estimates, since IP would not provide him with exact figures.

International Paper announced late last month that it will close its Natchez mill, a producer of cellulose products, by mid-year. The mill employs 640 people who live in the Miss-Lou.

&uot;The immediate impact of the IP closing will be mild during the first month as former employees draw their unemployment and dislocated worker service benefits,&uot; Myles wrote. &uot;However, the full impact of the IP closing will materialize within several months as benefits are reduced and or discontinued for unemployed workers.&uot;

No severance packages have been announced yet. IP officials have been meeting with union leaders in the past week.

Adams County receives property taxes from IP and its employees, but for the city the direct impact is on sales tax revenue.

Myles, using a computer model and estimates, came up with a figure of $183 million &045; the number the mill’s closing will pull from local, state and national economies.

Estimating that about 60 percent of that figure relates to Adams County, Myles projected the impact on the city and county would be $109.8 million in sales.

&uot;This is a significant loss to the local economy and a challenge for economic developers as they seek to grow the county and region,&uot; he wrote.

In terms of sales taxes, Myles estimated that IP employees’ spending yielded about $1.6 million. Of this, he said, $291,062 went to the City of Natchez, while

the rest went back to the state.

Meanwhile, IP and its employees paid about $650,00 in property taxes &045; but the lion’s share of that money came from the company itself. Employees spent about $18,018.

In other findings:

4Myles estimated IP has an annual payroll of $33 million, although that figure did not come from International Paper. That income generated an additional $18.3 million for merchants in Adams and surrounding counties, he said.

4Employment and lost wages will affect the economy first, but the closure will also affect spin-off industries.

On Friday, HB Zachry, a company which performs maintenance for IP, announced it would lay off 28 workers.

4IP’s closure will also affect the income tax revenue for the state and federal governments.