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Lawmakers want to fund shipyard, liquor warehouse additions with taxpayer debt

The amphibious transport dock ship Pre-Commissioning Unit (PCU) John P. Murtha (LPD 26) is launched from the Huntington Ingalls Industries shipyard in Pascagoula. Photo by U.S. Navy

Mississippi lawmakers could be adding to the state's debt to pay for an addition to the state's liquor warehouse and to help fund improvements at Huntington Ingalls Shipyard.

House Bill 391 would provide $45 million in bonds to help with improvements at Huntington Ingalls Shipyard in Pascagoula. The bill's text says the money is intended to "to be part of the five-year plan to modernize the state shipyard and keep it competitive with other shipyards."

The state's alcohol warehouse in Madison County near Gluckstadt. Photo by the state of Mississippi

HB 1556 would provide $35 million for improvements to the state's liquor warehouse in Madison County. Under state law, all liquor and wine has to be shipped to the state warehouse before it is distributed to liquor stores statewide, even those produced in state.

The bill passed by 73-38 margin on February 14, but is being held on a motion to reconsider by House Ways and Means Committee Chairman Jeff Smith (R-Columbus) and state Rep. Trey Lamar (R-Senatobia). The House has a deadline Friday to remove the motion to reconsider or else the bill is dead.

Service on the state's debt cost taxpayers $485 million in fiscal 2018, which ends on June 30 and could will cost them $489 million in fiscal 2019, depending on how much the Legislature appropriates for debt service this session.

Since 2004, the shipyard has received more than $1.1 billion from Mississippi taxpayers. Huntington Ingalls received $45 million last year from state taxpayers, $45 million in 2016, $20 million in 2015, $56 million in 2008, $56 million in 2005 and $40 million in 2004.

Huntington Ingalls Industries — the parent company of the Pascagoula shipyard and another in Newport News, Virginia — reported fourth quarter 2017 revenues of $2 billion, up 3.9 percent from the fourth quarter of 2016. The company earned $7.4 billion in 2017.

The U.S. Navy is Ingalls' biggest customer, with the shipyard building Arleigh Burke class destroyers and amphibious assault ships that carry Marines and their equipment. The company received a $1.4 billion contract to build the 13th San Antonio class amphibious platform dock ship and will also compete in the race to build the Navy's next frigate design, which could end up being 20 ships or more.

Ingalls also builds the Coast Guard's National Security Cutter, the Legend Class, with three more scheduled for completion over the next three years.

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