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|Mayors: IP move on Bastrop plant 'devastating'|
One word sums up mayors Jamie Mayo's and Dave Norris' reaction to the announcement that International Paper will close its Bastrop mill--devastating.
International Paper announced Friday it would close its Bastrop mill indefinitely, meaning roughly 550 area residents are without jobs today.
"People have talked about this for a long time, but the reality is you never think that's going to happen," Norris said. "That paper mill has been there for so long, and it's been really the economic engine for Morehouse Parish and a lot of southern Arkansas and our region, too."
"So, it's just devastating," Norris added. "I have a lot of confidence in (Bastrop) Mayor Clarence Hawkins, but some things are just beyond your ability to cope with,"
Mayo spoke with Hawkins Sunday night about the situation. He said Bastrop's budget is about $10 million. The loss of IP will impact Bastrop's budget by roughly 30 percent.
"You're talking about $3 million that he's going to have to cut, and the fact, too, is they (Bastrop economy) are not as diversified enough to regroup from that," Mayo said. "So, they're going to have to really support each other."
"Of the 550 employees, he said about 40 percent actually live outside of Morehouse Parish," Mayo pointed out. "So, not only does it impact Morehouse and Bastrop, but it impacts the whole region because there are people working there from Monroe, West Monroe and all over the region."
"It's a devastating blow for all of us," Mayo added.
Beside the city of Bastrop, other governmental agencies such as the Morehouse Parish Police Jury and Morehouse Parish School Board will be negatively impacted because of the closure, Norris said.
"Take that direct payroll out and it's a multiplier effect," Norris said. "It's tough."
"When you consider that, plus State Farm and Guide, now you're talking about almost 3,000 good-paying jobs gone in a short period of time," he said.
Mayo and Norris both said that during their combined years as government officials, they have never seen an economic situation like the one the country faces today.
Norris said the worst time he can remember was in the early 1980s when high unemployment and high inflation worked hand in hand on the heels of the Carter administration.
"For cities that depend on sales tax, inflation is kind of a two-edged sword," Norris explained. "You've got to pay more, but your sales tax increases, so that part was not nearly as bad.
"One of the things we're going to have to worry with is we may very well be looking at some significant increases in police, fire and municipal employees' pension matches. That happened to us back in 2001 when we went from paying around 10 percent on the three to over 20 percent."
Mayo said the increase that year in pension matches contributed to the city of Monroe's $5.4 million deficit in 2001.
Norris added, "They don't ask you if you can pay it ... they hand you a bill and say pay it. I think Bastrop got caught in that deal and they may be still paying a little of that back. A lot of cities had to borrow for that."
Mayo commended Hawkins' approach to rally people and offering hope, saying people must pull together and not point fingers.
"They've had a lot of progress in Bastrop, but it's going to take a regional effort to help them," Mayo said. "He's going to have to look at different options ... when you're talking about $3 million from your budget, that's probably at least a couple of (city) departments. He has to balance his budget, and it's going to be tough."
Mayo said the downturn in the economy has impacted everyone's budget one way or another.
"At this point, we're looking at some cost reductions as well, and sometimes that impacts services," Mayo said. "Our fund balance is strong, but that can be wiped out very quickly."
Regarding the economy, Norris offered, "Anybody who is not worried is not thinking, because it's a bad time. But I'm optimistic. I think we'll see a turn around in the economy pretty quickly."