Mississippi Business Journal B-L-O-G

West Nile virus and the mosquitoes that carry and transmit it to humans never go away completely, but most of us aren’t thinking about West Nile in March. Fortunately, the Mississippi State Department of Health is.

Today, MSDH confirmed the first human case of West Nile for 2008. Here are details from the agency’s news release:

(Jackson, MS) Today, the Mississippi State Department of Health (MSDH) confirmed the state’s first human case of West Nile virus (WNV) for the year in Lincoln County. According to the Centers for Disease Control and Prevention, it is the second reported human case in the United States for 2008.

Symptoms of WNV infection are often mild and may include fever, headache, nausea, vomiting, a rash, muscle weakness or swollen lymph nodes. In a small number of cases, infection can result in encephalitis or meningitis, which can lead to paralysis, coma and possibly death.

Mississippi’s Capital City comes in at No. 6 on a list of the least-expensive mid-sized U.S. cities for business, according to KPMG LLP, the firm that conducted the study. Results were released this morning.

Key factors in Jackson’s high ranking include low land costs (the lowest among the mid-sized cities studied), low construction costs and very competitive salary and wage costs.

More from the firm’s news release:

Little Rock, Ark., is the least-costly metropolitan area to do business among 18 U.S. locations with populations between 500,000 and 1.5 million, according to a study by KPMG LLP, the audit, tax and advisory firm. Contributing to Little Rock’s top ranking were competitive labor and investment costs, as well low transportation costs resulting from the city’s relatively central location.

“Selecting the best site for a business operation requires balanced consideration of many factors, including business costs, business environment, personnel costs and quality of life issues,” said Hartley Powell, national leader of KPMG’s Strategic Relocation and Expansion Services practice. “This study offers a comprehensive guide for comparing business costs in the United States and contains valuable information for any company seeking a cost advantage in locating a business operation.”

And the Competitive Alternatives Top 10:

1. Little Rock, Arkansas
2. McAllen, Texas
3. Oklahoma City, Oklahoma
4. Greenville-Spartanburg, South Carolina
5. Charleston, West Virginia
6. Jackson, Mississippi
7. Nashville, Tennessee
8. Raleigh, North Carolina
9. Omaha, Nebraska
10. Wichita, Kansas

Steve Preston, who leads the U.S. Small Business Administration, will be in Oxford Tuesday for a town hall meeting. The discussion begins at 9:30 a.m. in Bryant Hall on the Ole Miss campus and will cover the current economy, free trade agreements and the small businesses impact of the U.S.-Colombia Free Trade Agreement

Sen. John McCain, the presumptive Republican presidential nominee, has landed in Mississippi and will be campaigning at two events today — a rally and speech at The Riley Center in Meridian and a fundraiser in Jackson at the University Club.

The Mississippi Democratic Party is engaging the enemy, so to speak, with a rally at Smith Park in downtown Jackson. It starts at noon and will be followed by a news conference. According to a release from the party, “Democrats running for the U.S. Senate and U.S. House, along with other high-profile party leaders and representatives from the Hillary Clinton and Barack Obama campaigns, will speak about Democratic values and issues beginning at about 12:15 p.m.”

Nothing like Monday morning politics to jumpstart your work week, huh?

By BECKY GILLETTE
MBJ Contributing Writer
4becky@cox.net

Mississippi is at the top of a list that is troubling news for the state economy. The Magnolia State currently ranks number one in the country in the rate of mortgage payments that are past due.

In the fourth quarter of 2007, Mississippi had 11.07% of loans with installments past due, nearly double the national average of 6.31%. The next highest was Michigan with a delinquency rate of 8.97. Wyoming, North Dakota and Oregon had the lowest rates at about 3%.

Marianne Hill, senior economist for the Mississippi Institutions of Higher Learning, says delinquency rates in Mississippi are high largely for the same reason they are rising in most of the country: Borrowers in the subprime mortgage market are not able to meet the higher payments as their adjustable rates rise.

Sign of a recession?

Is this more evidence of a recession in the economy? A recession refers to a decrease in economic output and employment. Hill says the housing sector is an important part of the economy, and nationally, according to many economists, the downturn in the construction and purchase of homes has led to a recession.

“This can only be confirmed after the data comes in, but there is general agreement that the data will show at least a brief recession in the first half of 2008,” Hill says. “Due to the high levels of construction activity related to Katrina, the slowdown in construction employment here still leaves us with more construction activity than before 2005.

Although Mississippi had the highest delinquency rates, it didn’t have the highest foreclosure rates. The highest foreclosure rates were seen in Nevada, Florida and California. There are other states with higher rates of seriously delinquent mortgages and with a higher start rates of new foreclosures. However, Mississippi is among the top 11 in both categories.

Considering Katrina

A two-year moratorium on home foreclosures that went into effect in the southern part of the state after Hurricane Katrina expired in October. Hill says since the fourth quarter data for 2007 appears to be based on data available at the start of the quarter, which means that the full effect of the end of the moratorium has not yet been felt.

Mississippi Banking Commissioner John Allison says it will take a while after the lifting of the Katrina moratorium before foreclosures make it through the legal process.

“I had one commercial banker tell me because there are a lot of foreclosures out there, the attorneys who handle it are backlogged,” Allison says. “So, getting a foreclosure through the process is taking a while longer.”

There is concern the insurance issue could be causing people to lose their homes on the Mississippi Gulf Coast. Allison says many people can’t afford the insurance to rebuild, and can’t get a mortgage financing without insurance. Insurance on a $135,000 house might cost in the range of $400 to $500 per month.

Another issue he thinks is at play is that with real estate values going up, some people took equity out of their house to pay off bills. Now the credit cards are maxed out again, and the homeowner can’t afford to make payments.

“It isn’t just one thing we can hang our hats on,” Allison says. “Part of it is financial literacy, managing money. There are the disaster areas. And there were people taking out subprime loans not understanding what they were getting into. There are all kinds of exotic products in the market.”

But, Allison is optimistic the situation will be resolved.

“Real estate is resilient,” he says. “It does bounce back. Hopefully people are in it for the long run. They will get their values back and everything should be okay.”

The MBJ is putting together two development-related lists for the March 31st issue, and we need your help.

We are updating our list of mixed-used development projects in Mississippi, and we are creating a new list of “green” projects planned, underway or complete in the state. If you’re part of one of these projects, drop me a note at jim.laird@msbusiness.com and we’ll send you a survey form.

The clock is ticking on our deadline…

With a runoff with fellow Republican Gregg Harper coming up April 1, Charlie Ross landed another endorsement from an industry advocacy org yesterday. Details from his campaign’s news release:

Jackson, MS - On Thursday, the Associated General Contractors of Mississippi (AGC) formally endorsed Charlie Ross for his Third Congressional District campaign.

“I would like to thank the AGC for endorsing me for the Third Congressional District,” Ross said. “The construction industry is vital to Mississippi’s economy, and I am proud to have this group’s support. With so many on-going construction projects across the state, I will be an advocate for the industry. I will also fight for economic development projects throughout the district, which is vital to our state’s growth. While in the legislature, I had the highest pro-business BIPEC rating. I will have the same values and beliefs in Washington that I had in the Mississippi Senate.”

Want a shot at playing football with former Green Bay Packers and Southern Miss quarterback Brett Favre? Here’s your chance:

URGENT!! OPEN CASTING CALL!

QUESTIONS? PLEASE CALL BRANDY SNOW 323-595-0048

All together now: hut one, hut two…

By CLAY CHANDLER
MBJ Staff Writer
clay.chandler@msbusiness.com

Seventeen days before his trial on charges of judicial bribery was set to begin, Dickie Scruggs entered a plea of guilty Friday morning in Federal District Court in Oxford.

Scruggs and his law partner, Sidney Backstrom, admitted their involvement in a conspiracy to bribe Circuit Judge Henry Lackey.

Prosecutors recommended Scruggs be sentenced to five years in a federal penitentiary; they recommended Backstrom receive two and a half years. Scruggs’ son, Zach, also indicted in connection to the same case, did not enter a plea today.

Scruggs’ admission brings an end to three months of legal posturing and rampant speculation that began when he and members of his law firm were first indicted in late November.

Three men — attorneys Timothy Balducci and Joey Langston and former state auditor Steve Patterson — pleaded guilty earlier this year, and have been cooperating with the government ever since.

Immense pressure

The offices of federal prosecutors are well funded, well staffed and have a reputation for being ferocious once a target is identified. Matt Steffey, a professor of law at Mississippi College, said the pressure they can exert on a defendant is immense.

“You’re not going to win a war of attrition with the federal government,” Steffey said.

Mix that in with the opportunity for a defendant to greatly lessen his punishment by pleading guilty, and Scruggs and Backstrom — like Balducci, Patterson and Langston — were most likely left with little choice, Steffey said.

“If (Scruggs) would have been found guilty by a jury, he would have had absolutely no control over his sentence, where he would serve it or the dollar amount of his fine,” Steffey said.

Business community reacts

Since the indictments were first handed down, Mississippi’s legal community has been turned on its head. The Wall Street Journal has resumed its editorials calling for reform in the state, much the same way the newspaper did before the Mississippi Legislature passed tort reform in the 2004 session.

One of the groups who pushed hardest back then for tort reform was Mississippians for Economic Progress. The group’s president, Lex Taylor, was out of the state Friday morning and did not immediately return a phone message seeking comment.

As for the long-term effects of this case’s indictments and subsequent guilty pleas, Steffey said there are two schools of thought: If the cooperation of those who have already pleaded guilty lead prosecutors to indict a large number of additional people, the aftermath will reach far and wide. If it turns out this is an isolated incident in which a handful of wealthy, rogue lawyers tried to rig the system in their favor, little in the way of lasting effects will be felt.

“Judicial bribery undermines everybody’s sense of fairness when it comes to the judicial system,” Steffey said.

Wow — Dickie Scruggs pleads guilty. Who saw that coming on this lovely Friday morning?

MBJ staff writer Clay Chandler is working the Scruggs story right now, and we should have it posted here and at MBJ Online shortly.