by Lance Turner
Posted 3/22/2013 04:32 pm
Updated 12 months ago
The state Bureau of Legislature Research has released the second of two reports examining the proposed $1.1 million Big River Steel plant in Osceola.
The report, by Regional Economic Models Inc., comes the day after the bureau released another report on the project by IHS Global Insights Inc. That report said state economic development officials overestimated the long-term benefits of a proposal to help finance the steel mill because they didn't consider uncertainties surrounding the project.
The state House and Senate hired both firms to conduct independent financial analyses of the mill proposal. Lawmakers are scheduled to discuss the project Monday.
In the summary of its report, REMI said the Big River Steel plant would generate 3,500 jobs during construction and 1,300 during operations, which is more than what steel executives leading the project have estimated.
REMI said the plant would also create about $400 million in additional gross domestic product during construction and $150 million more GDP "in subsequent years." It said the "economic story" of Big River Steel -- the new jobs and business activity -- is a "positive" one.
"The fiscal impact picture can be more mixed, depending on the exact size of the incentives offered to the project and the higher 'carrying costs' to the state economy for having more jobs, GDP and especially more population," the report says.
REMI says the recycling tax credit is the project's "biggest issue."
"Without it, the fiscal impact to the state is generally positive, but if the opportunity cost of the foregone revenue behind the credit counts as a liability against the state budget to the tune to $240 million, then the fiscal impact is negative," the report said.
Still, REMI says the net fiscal costs are "relatively low" compared to the project's economic benefits.