Occupational licensing is usually sold as a necessity to protect the health and welfare of our citizens. It is a sign of quality that can only be achieved through an official license from the government. When in reality it is nothing more than a protectionist game that limits competition and raises cost for everyone. 

In the 1950s, just five percent of workers in America needed a license to work. And these are in occupations most commonly associated with licensing — medical professionals, teachers, or lawyers. But since that time, the number of occupations that require a license has exploded. 

Today, about 19 percent of Mississippians are in an occupation that requires a license. And this is particularly troubling in low and middle-income occupations. Mississippi currently licenses 66 of 102 lower-income occupations, as identified by Institute for Justice. 

On average, licensing for low and middle-income occupations in Mississippi requires an individual to complete 160 days of training, to pass two exams, and to pay $330 in fees. Those numbers will vary depending on the industry. For example, a shampooer must receive 1,500 clock hours of education. A fire alarm installer must pay over $1,000 in fees. 

The net result is a decrease in the number of people who can work. A study from the National Bureau of Economic Research found that occupational licensing reduces labor supply by 17 to 27 percent.
In Mississippi, the Institute for Justice estimates that licensing has cost the state 13,000 jobs. That represents two Nissan plants that could be created by reducing our licensing burden, and it wouldn’t require a dime in taxpayer incentives. 

The limited consumer choice then leads to higher prices for that consumer, resulting in a hidden tax every Mississippians pays. 

Occupational licensing leads to a decrease in the number of people working and an increase in costs to everyone. But is it a public good? 

The empirical evidence that exists shows that is not the case. As the Obama administration said in a 2015 report, “Most research does not find that licensing improves quality or public health and safety.” The consumer is paying more without getting better results. 

Instead of government licensing, there are voluntary or non-regulatory options that help entrepreneurs start and run businesses while providing the maximum options for consumers. 

Key Facts 

Licensing Alternatives 

Market competition is the least restrictive option. Without government-imposed restrictions, consumers have the widest assortment of choices, thereby giving businesses the strongest incentives to maintain a reputation for high-quality services. When service providers are free to compete, consumers can decide who provides the best services, thereby weeding out those that do not. 

Quality service self-disclosure is another term for customer satisfaction. There are numerous common sites people can leave reviews such as Yelp, Google, Facebook, specific industry sites, etc. Finding out which location is providing a good customer experience is easier than ever, providing users with more complete options. 

Voluntary, third-party certification allows the provider to voluntarily receive and maintain certification from a non-government organization. One of the most common examples is the National Institute
for Automotive Service Excellence (ASE) designation for auto mechanics. No mechanic is required to receive this certification, but it sends a signal to the consumer that the location with that designation is committed to quality service. And the consumer can decide whether that is important. 

Voluntary bonding and insurance is the final voluntary option. By being bonded and insured, providers are showing their concern for quality to customers at the risk to their own bottom line — whether that’s through the potential for increased premiums or loss of collateral. 

These are less restrictive options that do not involve the government. But there are still government- controlled options that are less intrusive than licensure. 

Two legal options are private causes of action, which give consumers the right to bring lawsuits against service providers who are at fault, and deceptive trade practice acts, which allow consumers to sue businesses for practices that are deceptive or unfair. 

The government can also mandate inspections as they do in a number of fields, most notably the food- service industry. It could be applied in occupations that also require licensing, such as the construction field and barbers and cosmetologists. This allows those who are trained in a field to spot potential hazards, while being less burdensome than licensure. 

The state may choose to require registration, as they do with hair braiders. Hair braiders previously needed to take hundreds of hours of irrelevant cosmetology classes. Now they register with the state and pay a small fee. This discourages “fly-by-night” providers, while still only creating a small barrier for providers. 

All of these options have one theme in common: They are better than government mandated licensure and prevent entrepreneurs from having to take state mandated classes, pay hundreds (or thousands) of dollars in classes, and take time out of their life to receive permission from the state to earn a living. 

Instead, the state can protect consumers, while relying on a small government approach that promotes competition and consumer choice. This is what will encourage economic growth. 

Following Arizona

Earlier this year, Arizona became the first state in the nation to provide licensing reciprocity to newcomers to the Grand Canyon State, a state that has had a steady stream of inmigration dating back a couple decades. 

Right now, if you move to Mississippi, you are required to essentially start from scratch if you want a license in the field you have already been trained. Even if you’ve been mastering that work for two plus decades. But not in Arizona anymore. 

What Arizona did, and a couple other states have since followed, is roll out the red carpet to new residents moving to the state and telling people they can work here without an extra unnecessary hurdle.  If you got your license in Mississippi, that’s good enough for Arizona. 

Mississippi should follow this model, especially in the early days before every state has done this, and make the business climate more enticing to all.

The battle to preserve our natural rights of life, liberty, and property is as arduous today as it was 243 years ago, when George Washington and his men made a daring defense.

Though we do not fight our would-be rulers with muskets and bayonets today, we remain in a war to defend our constitutional rights from those who would continue to challenge them. Our weapons today are different but our commitment to win must be no less earnest.

Our founders understood the high purpose and necessity of such a defense. They knew the opportunity of a constitutional republic was won by their generation but that it would also require an ever-vigilant citizenry to defend it from well-meaning but power-seeking governments, generation after generation.

As active and engaged citizens, we have a role as defenders of the blessings of liberty for all Mississippians. Whether a lawyer representing an entrepreneur who is prevented from starting a business by unnecessary and burdensome regulations, a policy advocate working with members of the legislature to push for limited government, a community activist working to ensure equality under the law, or an ordinary citizen writing an op-ed for the local newspaper, we’re all defending our shared blessings of liberty.

Government did not grant these blessings to us; they are natural to each of us as individuals. And none of us can be denied these blessings or given any modifier that makes our blessings preferable or subordinate to any others.

As we celebrate the eternal blessings of the Christmas season with family and friends, let us take the time to think about that incredible crossing on Christmas night, 1776.

When the hopes of independence lay in the balance, our country’s first president planned and executed the bold attack on the British. George Washington led famished, cold, tired men across the Delaware in the darkness as rain turned to sleet and then to snow, and the winds blew without relief.

The American colonists prevailed in that fight at Trenton and eventually, thanks to a spirit that would not be subdued, our independence was won.

With that enduring spirit in mind this Christmas season, we should take the time to recognize how rich our blessings are and how worthy of a robust defense is liberty.

Those who wish to have wine or liquor in their homes on Christmas Day in Mississippi need to make sure they purchased their alcohol by closing time on Christmas Eve. 

All alcohol that is greater than 5 percent alcohol by weight is illegal to be sold on Christmas Day. This essentially means beer and light wine can be sold in grocery stores, while liquor stores can not sell any of their goods. 

Mississippi is one of 21 states with such a restriction in place. Nine states have a total ban on retail alcohol sales on Christmas. The same restriction was in place for Thanksgiving in Mississippi. 

Alcohol restrictions, though probably not as silly as this, have long been a part of Mississippi’s history.

Our modern laws governing the control of alcohol are anything but that, and continue a long tradition of excess government control. 

We have over empowered individual counties to define their own laws, and in so doing have created a chaotic state of regulation, difficult to understand by the average residential citizen, let alone internal and external businesses hoping to sell.

Furthermore, the state has retained an egregious amount of control of the distribution process. Mississippi has decided that, rather than allow private businesses to control the market, it will run a large warehouse in the central part of the state which will have a complete monopoly over the distribution of all spirits and wines. 

As the Department of Revenue states on its own site, “the ABC imports, stores, and sells 2,850,000 cases of spirits and wines annually from its 211,000 square foot warehouse located in South Madison County Industrial Park.”

This warehouse consistently operates at capacity, and government leaders are considering a $35 million expansion. Perhaps our politicians ought to consider giving the free market a chance? 

There is no reason that our government should be so deeply involved in controlling the distribution for a product. They hike up prices by a tremendous rate, limit access to the product, and determine which brands are allowed to sell in the state, leaving businesses in the dark and unable to control their own wares.

Private businesses are barred from distributing alcohol in Mississippi. While UberEats, DoorDash, and GrubHub have created thousands of jobs in other states through their delivery systems, our legislative leaders have shut down this opportunity for individuals to order alcohol with their delivery.

And while a variety of companies sell and ship wine, whiskey, and other alcoholic beverages around the country, our legislative leaders have determined that we shouldn’t have this freedom of access. 

If you were shopping for a Christmas gift this year, you might find yourself looking at a wine basket, such as those at Wine & Country. However, upon checkout you will be met with the embarrassing notification that your state is one of only three in the entire nation that completely bars the shipment of any wines.

The excess regulation has made Mississippi last in the nation for craft beer development. For comparison, craft brewers currently produce $150 per capita in Mississippi, while they produce $650 per capita in Vermont. Imagine the difference such an industry could make in our state. This is thousands of tangible new jobs which are being discouraged from coming into existence by our government.

Existing policies have led Mississippi to have the largest shadow economy in the nation (referring to the exchange of products that are not taxed or recorded) at 9.54 percent of GDP. Moonshine is either produced or is available in every single county, which many link to the strict regulation of the alcohol industry. Our egregious taxation of alcohol products displayed here by the Department of Revenue has encouraged many companies such as Costco and Trader Joes to avoid opening locations in the state due to the lack of revenue potential on alcoholic products.

Prohibition is alive and well in Mississippi. Our government has decided we apparently can’t be trusted to make basic purchasing decisions for ourselves, so they must control what alcoholic drinks we’re allowed to have access to, how we’re allowed to receive these drinks, and from whom we’re allowed to purchase these drinks.

Be not fooled by the government “do gooders” who proclaim that they carry out policies like this for our own protection. Too many of our political leaders refuse to give freedom a chance, and instead have decided that they know better than we do when it comes to running our lives.

The fact is that while Mississippi prides itself on having a relatively low income tax, it finds dozens of other ways to tax and control its citizens. 

Companies are discouraged from entering into business in the state because we have established covert taxes which discourage entrepreneurial risk taking. 

Mississippi controls, regulates, and taxes alcohol worse than New York or California, so imagine what other discrete ways it is shutting down job opportunities and discouraging new business.

Mississippi’s defined benefit pension fund’s fiscal position worsened after worse than average investment income in 2019 and changes to the way the staff forecasts its future finances, according to the fund’s annual report released on Wednesday.

The Public Employees’ Retirement System of Mississippi — which serves most state, county and municipal employees — now has an unfunded liability of more than $17.6 billion. Last year, it was $16.9 billion.

PERS’ actuarial staff lowered the plan’s future inflation assumption and the amount of salary increases for contributing member, which helped the unfunded liabilities increase by nearly a billion dollars.

The plan’s funding ratio, which is defined as the share of future obligations covered by current assets, shrank from 61.8 percent in 2018 to 60.9 percent, just a tick below 2017 (61 percent). While the plan’s obligations won’t be due all at once, the funding ratio presents a good view of the plan’s financial health.

The general fund tax revenue for the entire proposed state budget for fiscal 2021 is $5.85 billion. Filling PERS’ present unfunded liability would take three years of that revenue.

PERS funding ratio 1998-2019

1998200220062010201420182019
85%83.4%73.5%64.2%61%61.8%60.9%

The reason for the worsening financial situation is two-fold: Less money coming in from the plan’s investments and more benefits paid out to an ever-increasing number of retirees.

PERS earned $1.701 billion or a 6.64 percent rate of return on the plan’s investments, after earning $2.385 billion or a 9.48 percent rate of return in 2018.

The plan’s annual average expectation is 7.75 percent return from its investments. 

The number of retirees increased from 104,973 to 107,844, a difference of 2,871. The number of active members largely held steady, decreasing just slightly from 150,687 in 2018 to 150,651 in 2019. The ratio of active employees to retirees remained at 1.4 for the second consecutive year.

Benefits paid by PERS to retirees increased by $138 million over last year to $2.7 billion, an increase of 5.3 percent from 2018.

With more retirees and more paid out in benefits than last year, the amount paid as a cost of living adjustment to PERS retirees increased again. 

Last year, the plan paid $650 million in COLA to beneficiaries. This year, that amount grew 7.6 percent to nearly $700 million. 

As a percentage of benefits paid, the COLA grew from 24.9 percent of benefits paid in 2018 to 25.4 this year. 

PERS provides a cost of living adjustment that amounts to three percent of the annual retirement allowance for each full fiscal year of retirement until the retired member reaches age 60.

From that point, the three percent rate is compounded for each fiscal year. Since many retirees and beneficiaries choose to receive it as a lump sum at the end of the year, the benefit is known as the 13th check.

PERS unfunded liabilities (in billions)

2009201020122014201620182019
$9.99$11.26$14.5$14.45$16.81$16.94$17.6

PERS actuaries forecast that the plan’s funding ratio — provided that the plan’s investments average 7.75 percent over the next 28 years — will be up to 83.2 percent funded by 2047. 

If the plan’s finances average 6.25 percent rate of return, the plan would dip below 50 percent on its funding ratio by 2034 and bottom out slightly above 25 percent by 2049.

Change is possible

The dire situation does not need to continue.

Lawmakers should freeze the program’s overly generous COLA for three years or more. Then either tie it to the Consumer Price Index, which has recorded a rate of inflation of 2.18 percent since 1999 or go back to the old way of computing the COLA as 2.5 percent of the original benefit. 

One alternate solution is mimic South Dakota’s approach to its COLA. This state indexes its COLA to the CPI and to the plan’s funding ratio — which is defined as the share of future obligations covered by current assets. 

South Dakota has a minimum COLA rate of 2.1, when plan funding level is below 80 percent and a maximum of 3.1 percent when the plan is funded above 100 percent. 

New hires should be transferred to a 401k plan that would increase employee contribution rates and allow them to have more control and portability over their money. 

By Increasing the employee contribution rate (which now is 9 percent), this would better balance contributions by taxpayers, which have increased eight times since 1990 versus only twice for employees. Only the legislature can authorize an employee contribution increase for PERS and haven’t done so since 2009. 

The state retirement system does not need to be unfunded. But it will require action. 

The cities of Brandon and Flowood are hoping to start the trend in Rankin county of banning e-cigarettes and vaping for minors. They're too late.

Minors are already prohibited from buying such products meaning the new ordinances will have little effect on the legality of vaping in Rankin county.

According to a story from WLBT, this began as a discussion among municipalities in Rankin county, along with the Sheriff's Department. Other cities are expected that follow suit.

Elected officials across the country are beside themselves in the push to outlaw vaping.

Unfortunately, America has a terrible record of accomplishment when it comes to government prohibitions. After all, the prohibition on teens purchasing e-cigarettes or vaping products is so ineffective, we don't even realize it's already the law.

Sales of e-cigarettes have been prohibited to those under 18 since 2016, so minors are already turning to the black-market. That should be our first clue that bans don’t work. Because the black market is the problem, as it usually is.

So far, the overwhelming evidence is the deaths and illnesses related to vaping were the result of black-market substances, such as vitamin E. We don't exactly know all of the details but these are not the products adults are legally purchasing today. 

Indeed, prohibitions only tend to illicit more dangerous options.

During alcohol prohibition, individuals made their own liquor that was often much more dangerous than what you could legally buy prior to prohibition. Today, many people roll their own cigarettes in locales that have absurdly high taxes. Again, these are often more dangerous as you can get more nicotine by leaving out a filter. 

And when it comes to vaping, teens can turn to YouTube for do-it-yourself videos on raising nicotine levels. This won’t change because of a new ordinance. Just like it didn't change because of a federal law.

While well intentioned, all this ordinance and other bans will do is increase lawlessness.

A new tax credit designed to help children being raised in the state’s foster care system and passed this session has reached its cap for business donations, but individuals still have time to take advantage before the year ends. 

The way the Children’s Promise Tax Credit works is businesses and individuals donate to eligible organizations that help children. Then they fill out a form and send it to the state’s Department of Revenue.

For businesses, the credit is a dollar for dollar up to 50 percent of its state tax liability. 

Individual taxpayers can receive a dollar for dollar credit up to $1,000 of their liability. Those without a liability have five years to apply the credit before it expires.

House Bill 1613 passed nearly unopposed in the legislature this session and went in effect on July 1. 

There is a $5 million cap for corporate donations that was reached soon after the credit went into effect. Individuals wanting to participate have a $3 million cap. 

Sean Milner is the executive director of the Baptist Children’s Village, which receives 37 percent of its funding from individual donations, but none from state or federal funds. He said he’s had a hard time explaining the new tax to donors for an unusual reason.

“The law is so good that people are having a hard time understanding it. Not because it’s difficult to understand, but quite honestly it makes too much sense and people aren’t used to things coming out of the legislature that make this much sense,” Milner said. “The idea that you can give your money to someone who’s serving the state’s needs as opposed to having to pay taxes, that’s difficult for people to understand.”

According to the state Department of Revenue, $2,751,042.18 of the individual credit has yet to be allocated.

Milner says that the number of allocated credits doesn’t show how much of an impact the credit has had on his donors. He said that most of his donors, who are individuals giving between $25 and $100, aren’t itemizing and won’t be taking advantage of the credit’s advantages. 

He said when his organization sent out a letter with directions on how to utilize the new credit to existing donors, the checks continued to flow in despite most not taking advantage of the program.

“Everybody is so generous in Mississippi. They give money and expect nothing in return,” Milner said. “They don’t report this or keep the receipt to put on their taxes for some kind of receipt. It’s a great law and it’s taking a little while for people to catch on.”

Erin Kate Goode is the executive director of the Jackson-based Center for Pregnancy Choices Metro Area. She said donations to her organization, which uses a licensed medical clinic to educate pregnant women about their choices including adoption and parenting, have been three times as much as the same time last year. 

While she has a donor that is matching gifts during that time, she says the tax credit is definitely helping.

“The gifts have been a higher level than they were last year,” Goode said. “It (the credit) frees people up to give more.”

Milner said another advantage of the credit is that it creates a partnership between childcare agencies, the business community, and general public and that the benefits from that relationship has yet to be seen.

Bob Anderson is a CPC donor and a board member and says that he hopes that people don’t get lost in applying for the tax credit, which he says is not difficult.

“The pot of money for it (the tax credit) is largely there this year, but I think in the future, it’s going to go a lot quicker,” Anderson said. “This credit is a great way to direct money to these organizations that directly help children. A lot of government organizations have a lot of overhead, but the CPC and organizations like them are very streamlined, very efficient. I used to joke they could cut a nickel in half and make 20 cents out of it.

The DOR will accept applications from businesses starting January 1 by email for the credit for 2020. 

In 2015, the Drug Enforcement Agency raided Miladis Salgado’s home on a false tip that her estranged husband was dealing drugs. In the end, the federal government used civil forfeiture to take $15,000 from Salgado, a large portion of her life savings. 

Salgado knew she had done nothing wrong. So she fought back. And won.

But Salgado needed an attorney. She hired an attorney on contingency, and after two long years, the court was about to rule in her favor. That’s when the federal government folded. They admitted there was no evidence of a crime and agreed to return her money. 

But in doing so, they refused to pay her attorneys’ fee. Salgado petitioned the judge for the fees, but that request was denied because the government returned her money before a ruling, which would have triggered the government to pay those fees.  

That would leave Salgado with about $10,000 of her $15,000 the government took. The other $5,000 would go toward her attorney. Meaning, even though Salgado did nothing wrong and the government illegally took her property, she will still lose $5,000 just for fighting for her property that was rightly hers. 

The Institute for Justice brought Salgado’s petition for attorney fees to the U.S. Supreme Court. The Mississippi Justice Institute, along with other public interest law firms, filed an amici curiae (friends of the court) brief in support of Salgado.

“The government spent years trying to take Salgado’s cash,” the amici firms wrote. “It embarked on the all-too-common attrition-by-litigation strategy. Salgado was forced to bear the literal expense of defending against the government’s actions. Even though the government eventually dismissed its case and returned the cash, Salgado wound up with less money than she had before the DEA’s raid.”

The petition revolves around a profound question: When the government dismisses a forfeiture case it has spent years litigating, did the property owner from whom the property was taken ‘substantially prevail’ under federal law?

What is the high road and why do we need to take it to freedom?

At the Mississippi Center for Public Policy, our duty is to pave the way so citizens are free to choose their own version of flourishing — unencumbered by government’s barriers and burdens. We believe the best way to get every Mississippian on the high road to freedom is to first hold government to its constitutionally limited role so that free market ideas and mechanisms are robust and so that private institutions can blossom. 

That was the inspiration behind the High Road to Freedom, MCPP’s new policy guide with more than 100 policy recommendations on 28 of the most pressing issues in our state. Each topic is backed by rationale, data, ideas, and principles and can be put into action. 

Click here to download and read The High Road to Freedom.

It is our goal that this will serve as a policy guide over the next four years. We will continue to have luncheons that highlight individual issues and run op-eds in newspapers through the state. And when the legislature returns in a couple weeks, we will regularly turn to this book to outline our position on an issue and the reasoning behind it. 

There has never been a question about where we stand or what we believe will be the right policy. This just makes it clear for everyone.

Finally, we didn’t do this because we love policy, but rather because we love people. When we love people, we want them to have every opportunity to raise their eyes to the wonders of what is possible and to be willing to endeavor to live the life they have imagined for themselves and for their loved ones. 

You can check out the High Road to Freedom here.

As many prepare to hit the roads to travel for the Christmas holidays, Mississippians will be paying less than most at the pump.

According to the daily updated data from AAA, Mississippians are paying $2.21 per gallon. Missouri is slightly less at $2.206 per gallon. Mississippi’s four neighbors range from $2.23 in Louisiana to $2.30 in Tennessee. 

Residents of Simpson county are paying the least for gasoline at $2.08 per gallon. Residents of Alcorn, Desoto, Hancock, Harrison Jones, Marion, Prentiss, Stone, Tate, Warren, and Yazoo are all paying $2.15 or less per gallon. 

In the metro area, gas is $2.18 per gallon in Rankin county, $2.20 in Madison county, and $2.22 in Hinds county. 

Californians are paying the most among the continental U.S., at $3.62 per gallon. Two counties in the state are posting averages of over $4.00 per gallon. 

A significant amount of attention was dedicated to Mississippi’s gas tax during the 2019 elections, with an emphasis on raising it from candidates in both parties. 

In the Republican gubernatorial primary, former Supreme Court Justice Bill Waller supported a gas tax increase as did Democrat Attorney General Jim Hood. Gov.-elect Tate Reeves, who defeated Waller in the primary and Hood in the general election, opposed a gas tax increase on his way to victory.  

Still, there are others in powerful positions who have voiced support for at least some type of gas tax increase. And the numerous transportation related associations are not likely to give up their continual efforts to raise taxes.

But does a high gas tax correspond with a highly rated highyway system?

Not necessarily, according to an analysis that compared gasoline taxes by state and rankings from the Reason Foundation’s recently released annual Highway Report.

None of the top 10 states scored for highway efficiency and cost effectiveness were among the top 10 in the amount of gasoline tax levied on consumers. The top 10 states averaged 25.25 cents in taxes per gallon, just slightly above 24.85 cent per gallon nationwide average from the American Petroleum Institute.

Mississippi has the third lowest gasoline tax nationally (18.79 cents per gallon) and yet its highway efficiency and cost effectiveness was ranked 25th by Reason. 

Out of the five states with the lowest gasoline taxes, only Alaska (49th overall) and Oklahoma (41st overall) were near the bottom.

Conversely, none of the states with the highest gasoline tax scored higher than Mississippi in the overall score, the best being Illinois at 28th. The Land of Lincoln hits motorists with a 54.98 cent tax on every gallon of gasoline.

California has the nation’s highest gasoline tax at 61.20 cents per gallon, yet it only ranked 43rd overall in the Reason Foundation report. Pennsylvania (35th in the report) has the next highest gasoline tax nationally at 58.7 cents per gallon. 

Missouri was ranked third overall and its gasoline tax (17.42 cents per gallon) is the lowest in the country, yet its rural interstate pavement condition was 17th best and it also scored highly for capital and bridge disbursements per mile (second) despite having the seventh-largest state-controlled highway system nationally.

Mississippi was ranked 25th by the Reason Foundation overall, with its score bolstered by high marks for high maintenance disbursements per mile and low urban congestion. 

While the Mississippi legislature has opted against raising the gas tax, the Mississippi Infrastructure Modernization Act of 2018 will send 35 percent of use tax revenues by next year to cities and counties to assist with infrastructure.

The bill will additionally authorize $300 million in borrowing, with $250 million for the Mississippi Department of Transportation and $50 million for local infrastructure not administered by MDOT.

The other part of the package was the creation of a lottery, which started selling tickets just a couple weeks ago. The first $80 million in tax revenue annually will go to the state highway fund until 2028 and the rest will be put into the Education Enhancement Fund. Just the highway fund portion alone could add up to $720 million. 

State gasoline taxes are levied in addition to the federal tax of 18.4 cents, which hasn’t been increased since 1993.

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