Far too many candidates for office, Republicans and Democrats, believe long-term prosperity can be achieved from increased government spending and centralized programs and plans. But the evidence doesn’t support such claims, no matter how passionately or eloquently the campaigner insists.
If prosperity is our goal, we should follow the lead of high-growth, low-tax states in the Southeast that have lower taxes, lighter licensure and regulatory burdens, and a more limited government.
What does that look like?
There are several policy proposals that we would encourage any candidate for governor, lieutenant governor, or the legislature to support.
Eliminate burdensome licenses
Burdensome regulations hurt our economy and reduce employment opportunities. All totaled, there are 66 low-to-middle income occupations that are licensed in Mississippi. According to the Institute for Justice, Mississippi has lost 13,000 jobs because of occupational licensing and the state has suffered an economic value loss of $37 million.
While licenses are necessary for a few industries, the state should expand the use of voluntary certifications, adopt automatic sunsets on all licenses, and allow the Occupational Licensing Review Commission to review current, not just newly proposed, licenses. The reality is that we’ve allowed occupational licenses to become the tool for market incumbents, with lobbying apparatus, to build moats around monopolies and limit free-market completion.
Expand education scholarship account program
Mississippi became a national leader in 2015 in implementing an ESA program. Through this program, families are allowed to use the funds associated with their child’s education (i.e., their tax dollars) to choose the best educational setting for their child. For the first time, families in Mississippi, albeit a limited number of families, had a choice in their child’s education, regardless of their income.
Yet, the program is only available to students with special needs, and it serves less than 500 students per year. We should make this program available to every student in the state. By doing so, we’d be following the overwhelming empirical data that shows the benefits of school choice, saving taxpayer dollars, and putting parents back in control of their child’s education.
Cut red tape
Mississippi has more than 117,000 regulatory restrictions in the state rulebook, according to new analysis from the Mercatus Center. Why is this a cause for concern? There is considerable evidence that regulations slow economic growth and have a negative impact on investment, productivity, wages, and overall prosperity.
To reduce red tape, Mississippi should implement a regulatory cap that orders the removal of two olds rules each time a new one is added. A thriving economy is one with fewer regulations, a lighter government touch, and more freedom for small and mid-sized businesses.
Support the innovative economy
When ridesharing companies entered the market a few years ago as disruptors to the taxi monopoly, the unfortunate response from local governments was largely to regulate and limit the ridesharing economy. The legislature made the correct move in enacting statewide policy that preempts local regulation, and allows Uber, Lyft, and others to provide this new service to customers.
When it comes to other disruptors such as Airbnb or mobile food trucks, local governments are again working to protect the status quo and limit market-driven innovation. The state, through the legislature, should protect consumer choice and ensure that local governments cannot stifle competition.
Provide incentives to all businesses by lowering taxes
Mississippi, like many other states, has taken the approach that the only way to attract businesses to the state is by offering targeted taxpayer “incentives.”
Rather than offering tax breaks to a few, allowing the government to play favorites, and requiring business owners to subsidize their competition, we should lower the tax rates on all businesses and make Mississippi the most attractive state for businesses of all sizes and types.
Do not expand Medicaid
Despite the claim of expansion advocates, there is no pile of money sitting around that states are “leaving on the table” when they choose not to expand Medicaid. The fact is that any expansion adds to our federal debt and will cost the state hundreds of millions of dollars.
Medicaid is already a broken system. Adding more patients to the system will exacerbate things, and the patient outcomes will only worsen the poor quality of care currently being provided to the elderly, disabled, and poor. Furthermore, an expansion of Medicaid will certainly crowd out the essential funding needs for schools, roads, and public safety.
We believe these policy proposals represent the path to long-term, sustainable economic growth. Based on the evidence, public policies of economic freedom, individual liberty, free markets, and limited government will allow the state to experience business growth, entrepreneurship, higher labor productivity and wages, and, as a result, greater economic prosperity for all Mississippians who are ready and willing to prosper.
This column appeared in the Clarion Ledger on March 20, 2019.