Under the Gulf Opportunity Zone -- or GO Zone -- proposal, any company would be able to immediately deduct half the cost of investments in equipment or buildings. MGM Mirage owns an $800 million casino and hotel in Biloxi, Miss., the Beau Rivage. If, for example, uninsured damage reaches $100 million, the gambling giant could end up with a tax break as high as $50 million, congressional tax aides said.
Tax experts say national casino corporations such as MGM and Harrah's could use a GO Zone write-off to reduce taxable profit from their larger empires, whereas local Gulf Coast companies may have no outside profit from which to deduct their tax break.
Such complexity has limited the success of such tax-favored zones, development experts say. Western Mississippi already has one of the oldest such zones in the country in the Mid-Delta Empowerment Zone, founded in 1994. Crawford said tax incentives to write off business investment or deduct some of the cost of new employees have helped land some employers, such as Dollar General Corp., Viking Range Corp. and a catfish processor.
But the region remains extremely poor, said Shughard, the University of Mississippi economist. Empowerment zone designations, he said, "have had zero impact."
In contrast, the corners of the state with gambling have thrived since the casinos moved in, and they needed no enticement.
"The only incentive to the casinos was that it became legal," Crawford said.
The large casinos have made it clear that they badly want to rebuild. All they need is clearance from the state legislature next week to rebuild on land, not on fake riverboats and piers that met the technical requirement of keeping gambling off Mississippi soil.
"What our CEO said was, 'We'll come back bigger and better,' " Harrah's Lopez said.
The American Gaming Association did approach the White House and Congress for tax relief in the wake of Katrina, said a gambling company official, who spoke on condition of anonymity for fear of jeopardizing industry lobbying. But the association did not ask for any incentives to rebuild. It was seeking a tax credit for the employee salaries the companies continue to pay, despite the destruction of property. It so far has not gotten one.
But just because the casinos did not ask for the investment write-off doesn't mean they won't take it. "Anything that the federal government can provide, obviously we'll take advantage of it," the official said.
