In this edition of Unlicensed, we talk about Tuesday's runoff, who won, who lost, and where we go from here.

And will Bill Waller endorse the Republican nominee or the Democratic candidate that he is seemingly more closely aligned with? Or will he just stay on the sidelines?

Lt. Gov. Tate Reeves defeated former Supreme Court Justice Bill Waller 54-46 in yesterday’s runoff for the Republican nomination for governor. 

Reeves advances to the general election where he will meet Democrat Attorney General Jim Hood. 

Republicans also chose their attorney general nominee. State Treasurer Lynn Fitch defeated attorney Andy Taggart 52-48. Fitch will face Democrat Jennifer Collins in November as Republicans look to finally capture the one statewide office they don’t hold. 

Republicans in the northern district chose a nominee for transportation commissioner. John Caldwell defeated Geoffrey Yoste 57-43. Caldwell will meet Democrat Joe Grist in the general election. 

And Jackson Councilman De’Keither Stamps will be the Democratic nominee for Public Service Commissioner in the central district. Stamps will face Republican Brent Bailey in November. Bailey was the Republican nominee four years ago as well, losing to Democrat Cecil Brown. 

For the legislature, five Republican incumbents and two Democratic incumbents lost their bids for re-election. As of 8:30 a.m. Wednesday morning, two races – Senate District 3 and Senate District 50 – have yet to be called. 

Races in italics have yet to be called.

Lt. Gov. Tate Reeves defeated former Supreme Court Justice Bill Waller in the runoff for the Republican nomination for governor. Reeves advances to face Democrat Attorney General Jim Hood in the November general election. 

Reeves maintained a steady lead throughout the night as results began to trickle in. The race was called shortly before 9 p.m. 

As county totals began to appear, the board looked eerily similar to three weeks ago. A huge chunk of votes for Waller in Hinds, Madison, and Rankin counties, while Reeves performed well virtually everywhere else in the state.

Waller made some new inroads, particularly Northeast Mississippi, but it wasn't nearly enough to slow down Reeves in Republican primary strongholds outside the metro area. 

Map: Counties won by each candidate

This includes the population centers that are furthest north and south in the state. 

Once again, Reeves was simply dominant in the lower six counties, most notably, the three Coast counties. Reeves won 66 percent of the vote in Harrison county, 69 percent in Hancock county, and 71 percent in Jackson county. South Mississippi again was able to provide the numbers needed to counteract Waller's strength in the metro area.

And Reeves notched a victory in Desoto county. It was carried by State Rep. Robert Foster, who represents a House district in Desoto county, three weeks ago. Foster proceeded to endorse Waller, but Reeves still won 54 percent of the vote in the county. 

Also, as of 9:30 p.m., state Treasurer Lynn Fitch was maintaining a small lead over attorney Andy Taggart in the race for the Republican nomination for attorney general. With 90 percent in, Fitch was leading 51.5- 48.5 though the race has yet to be called. 

Stay tuned. We will have more election coverage on Wednesday.

The small town of Walls in DeSoto county, population 986, leads the state in the amount of its budget coming from fines and forfeitures.

According to the study by Governing magazine, the town sourced 26.53 percent of its budget from fines and forfeitures in 2017. That adds up to $249 of fines per resident.

Data from the state auditor’s office shows this number didn’t occur in isolation. Walls had 25.7 percent of its budget originating from fines and forfeitures in 2015 and 32.2 percent in 2014.

In 2017, the town had revenues of $898,808 and $238,476 came from fines and forfeitures.

Numbers from 2016 were not available.

The Rankin county city of Flowood was second, with $196 of fines and forfeitures per each of its 7,823 residents. The city had revenues of $20.4 million in 2018 and $981,949 came from fines and forfeitures.

Going by percentage of a city or town’s budget, the town of Decatur in Newton Ccunty was second to Walls, with $133,442 of its revenues in 2017 ($767,961) coming from fines and forfeitures.

Mississippi’s numbers were better than most, with only nine jurisdictions receiving 10 percent or more of their revenue from fines and forfeitures. Alabama had nine, Tennessee had 18 and Arkansas had 44 jurisdictions with 10 percent or more of revenue originating from fines and forfeitures.

Louisiana had 70 municipalities and counties in the 10 percent category and had 25 areas receiving 50 percent or more of their budgets from fines and forfeitures.

Georgia had the most nationally, with 92 receiving 10 percent or more of revenue from fines and forfeitures. The Peach State had 13 jurisdictions that received more than 50 percent of their revenue from fines and forfeitures. 

Texas was second with 90 jurisdictions in the 10 percent or greater cohort.

According to the study, fines and forfeitures account for more than 10 percent of general fund revenues for nearly 600 jurisdictions surveyed by Governing magazine. In 284 of those, fines and forfeitures were 20 percent or more of revenue.

One hundred twenty four jurisdictions had fine revenues exceeding $500 per capita.

Payrolls in Mississippi grew in July, continuing a positive trend for the state over the past year. 

The total number of employees on nonfarm payrolls in the state increased to 1,171,700 according to the Bureau of Labor Statistics. That’s an increase of about 1,200 jobs over the past month. These numbers are particularly impressive after the rough start to 2019, with job losses in each of the first three months. 

But that has changed.

Over the past year, the state has added 19,000 jobs. That translates to a 1.7 percent growth during that time period, which is higher than the national average. 

During the previous 12 months, each sector of the economy, as classified by BLS, added jobs in Mississippi. 

Among neighboring states, Alabama has had the highest growth rate, at 2 percent. Tennessee was also ahead of Mississippi at 1.8 percent. Arkansas’s growth rate was 1 percent, while Louisiana’s decreased by 0.05 percent. The Pelican State was the only state in the country to post a loss over the past year. 

But compared to national numbers, Mississippi was ahead of the average, which came in at 1.4 percent. Overall, Mississippi’s growth rate placed the state 17th nationally. 

Job growth among the SEC footprint.

The Business Roundtable, an association that counts among its members the CEOs of some of the largest public companies in America, announced this week a fundamental change in its new definition of the purpose of a corporation. 

Mainstream media genuflected. Milton Friedman rolled over in his grave.  

The Nobel prize-winning economist and best-selling author helped to create the predominant view that the purpose of a corporation, particularly a large, publicly traded one, is to increase its profits. To quote Friedman, “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

In fact, the overriding tenet of Corporate Finance, present in every college textbook, states that the role of the finance manager is to increase shareholder value.

Not according to this enlightened group. By their progressive definition, a corporation is not to independently pursue profit, but rather, pursue profit congruous with social good. 

It’s as if the pursuit of profit is somehow immoral and the aim of increasing shareholder value doesn’t require the care of customers, employees, and suppliers and our free market system hasn’t produced more prosperity for more people than any other economic system in the history of humankind.

So who decides the definition of social responsibility? What metrics determine if C Suite execs have achieved annual goals? Profits be damned, we reduced our carbon footprint by 2%, we saved four polar bears, we made the world a better place for our kids by .0002% last year. 

We can only imagine the squishy, subjective claims of success these modern CEOs will announce.

In his monumental essay in the New York Times on September 13, 1970, Friedman said, “The discussions of the ‘social responsibilities of business’ are notable for their analytical looseness and lack of rigor.”

There is also the distinct possibility that the CEOs who endorsed this modern, corporate “manifesto,” which includes 181 of the 188 members of the Business Roundtable, were trying to appease the current wave of the progressive political voices. 

Or a less cynical view might be that it was an attempt to seek relief or approval from the activist investors who constantly agitate public companies through shareholder meeting protests and the like. Both groups have grown more and more hostile to capitalism. If the latter is true, corporate groupthink is worse than we thought. You know what they say, if you give a mouse a cookie, he’ll soon want a glass of milk.

We have seen this experiment into corporate social activism, let’s just call it what it is, with devastating effects to corporate reputation and shareholder value. Starbucks under Schultz, Target Corp., Dick’s Sporting Goods, IBM, Disney’s ESPN, Kellogg’s, etc. The results have been a punishing lesson about mixing non-corporate ideas with P&L statements almost immediately remedied upon backtracking their social initiatives.

In his essay, Freidman’s words were prescient, “This short-sightedness is exemplified in speeches by businessmen on social responsibility. This may gain them kudos in the short run. But it helps to strengthen the already too prevalent view that the pursuit of profits is wicked and immoral and must be curbed and controlled by external forces. Once this view is adopted, the external forces that curb the market will not be the social consciences, however highly developed, of the pontificating executives; it will be the iron fist of government bureaucrats.”

Abandoning a 50-year-old view on the purpose of a corporation also undermines the belief in markets themselves. On this issue, Professor Friedman offered this dire warning, “the doctrine of ‘social responsibility’ involves the acceptance of the socialist view that political mechanisms, not market mechanisms, are the appropriate way to determine the allocation of scare resources to alternative uses.” 

A simple review of the 20th century should convince us all that’s not a road we want to travel.

Thankfully, a handful of leaders have rebuked the Business Roundtable. The Council of Institutional Investors was one such leader. “There’s no mechanism of accountability to anyone else,” said Ken Bertsch, the council’s leader. “This is CEOs who like to be in control and don’t like to be subject to the market demands.” 

In the Wall Street Journal, Michael Bordo, a Rutgers University economics professor and former student of Mr. Friedman, said the Business Roundtable’s new stance would have corporate executives behave like regulators. “That’s not what business is; that’s what government is,” he said. “I still think Friedman was right.”

However, there is one voice conspicuously absent in the dissent. Where are the independent board members? After all, the CEOs are employees who work at the direction of directors and shareholders. 

The resources these CEOs propose to spend in the pursuit of social good is not their own. Those resources are capital invested by shareholders; not by the growing category of “stakeholders” these modern CEOs seem so intent on pleasing. 

It is the fiduciary responsibility of the directors to protect such assets…and maybe even the entire free market system, too.

This column appeared in FEE on August 26, 2019.

An analysis of data by the Mississippi Center for Public Policy shows that a 15 cent gasoline tax increase would add up to about $123 annually per vehicle and a 20 cent per gallon tax hike would average about $180 annually per vehicle. 

For a family with two cars, that would be in the $250-$350 range each year.

When tallying up the cost of a potential gasoline tax increase on a family of four, the price would be much higher a month than the $6.67 increase cited by former state Supreme Court Justice Bill Waller Jr. 

His tax swap plan involving a state income tax bracket and the gasoline tax also would be only a tax increase on 42.8 percent of the state’s population who aren’t part of the state’s workforce.

Lt. Gov. Tate Reeves said the cost of a gasoline tax increase for a family of four would add up to about $500 per year, but achieving that figure would require three gas-guzzling trucks or heavy SUVs driving about 20,000 miles per year apiece and a gasoline tax of 15 to 20 cents more per gallon.

To calculate the average impact on a Mississippi driver annually, we used the top-selling vehicles in the state from both this year and a decade ago that included:

• 2019 Ford F-150.
• 2019 Nissan Altima.
• 2019 Toyota Camry.
• 2019 Honda Civic.
• 2019 Chevrolet Silverado.
• 2019 Chevrolet Tahoe.
• 2009 Ford F-150.
• 2009 Honda Accord.
• 2009 Honda Civic.

Then we calculated how many miles the average Mississippian drives per year. According to the U.S. Energy Information Administration, drivers in Mississippi traveled 40,877 million miles in 2017, ranking 28thnationally. Divide that by three million (the state’s population) and the average driver in the state drives about 13,625 miles per year. 

We also ran the numbers using 10,000 annual miles traveled per vehicle and 20,000 to see how much of a difference that makes.

Each vehicle’s U.S. Environmental Protection Agency rating for miles per gallon was used to calculate the average MPG that a Mississippi owner of that vehicle might face. 

The figure for MPG wasn’t the overall MPG, but an adjusted total that takes into account the amount of rural roads and highways with higher speed limits (84 percent of Mississippi roads are the responsibility of counties and the Mississippi Department of Transportation) and thus higher gas mileage. 

An owner of a Ford F-150 equipped with four wheel drive and the 3.5 liter turbocharged V-6 and driving 20,000 miles per year would pay $142 more per year and $11.83 more per month if the gasoline tax was increased by 15 cents per gallon.

The owner of a Nissan Altima that gets considerably better gas mileage (32.7999 miles per gallon) and drives 20,000 miles per year would still be higher than Waller’s stated figure at $7.60 per month and $91.47 per year with a 15 cent gas tax hike. 

Jacking up the gasoline tax to 20 cents per gallon would add up to $189 per year and $15.75 per month for the owner of the F-150 who drives 20,000 miles per year, while the Altima owner would pay $10.08 per month and $121 additionally per year.

Using the state Department of Revenue’s numbers on petroleum taxes, each one cent increase in the state’s gasoline tax would add up to about $23 million in additional revenue for the state’s highway fund, which is used for state-maintained roads only.

No tax swap for 42.8 percent of state’s population

Waller says eliminating the four percent income tax bracket and exchanging this for a gas tax hike would not be a tax increase. The problem is two-fold for this viewpoint.

According to U.S. Census Bureau data, the workforce participation rate in Mississippi is 57.2 percent, versus 63 percent nationally. Also, 15.9 percent of the state’s population is age 65 or older. 

This means 42.8 percent of the state’s population is not in the workforce and wouldn’t be subject to income tax, which exempts the first $2,000 of taxable income and taxes the next $3,000 at three percent, the next $5,000 at four percent and all taxable income more than $10,000 is taxed at a five percent rate. 

The state also doesn’t levy an income tax on retirement income, pensions and annuities, so that eliminates any tax relief for those age 65 or older.  

In this edition of Unlicensed, we talk about the Reeves/ Waller debate, Tuesday's runoff, and the direction of the Republican Party. 

Has anything changed during the runoff? Can either Bill Waller or Andy Taggart close the gap in their races?

Voters in both the Republican and Democratic Party will head back to the polls on Tuesday for primary runoffs. 

This will include two statewide races on the Republican side, led by the gubernatorial runoff between Lt. Gov. Tate Reeves and former Supreme Court Justice Bill Waller. Reeves led the pack, picking up almost 49 percent of the vote. Fifty-percent plus one was needed to avoid a runoff. 

Waller finished second with 33 percent of the vote. The third place finisher, State Rep. Robert Foster, endorsed Waller last week. Reeves picked up his own endorsement from an unlikely ally, State Sen. Chris McDaniel.

McDaniel, who nearly toppled Sen. Thad Cochran in 2014, and Reeves have long been at odds despite sharing many similarities when it comes to policy. This has resulted in McDaniel being largely relegated to the backbench in the Senate though he has been a more reliable liberty vote than virtually every other member of the chamber. But for 2019, the two came together. 

“No one has more reason to be displeased with Tate Reeves than I do,” McDaniel said. “But this is not about personalities, it’s about policies… I’m willing to put aside our past because I trust that (Reeves) will govern as a conservative.”

Republicans will also be selecting their nominee for attorney general. Treasurer Lynn Fitch led the field with 44 percent of the vote. Attorney Andy Taggart finished second, outpacing State Rep. Mark Baker by about 4,500 votes. Baker proceeded to endorse Taggart after the first round. 

Republicans in the Northern District will select a nominee for Transportation Commissioner. Voters will choose between John Caldwell, who received about 31 percent of the vote in the first round and Geoffrey Yoste who received 26 percent. 

Democrats in the Central District will choose between Jackson City Councilman De’Keither Stamps and Dorothy Benford for Public Service Commissioner. Stamps received about 40 percent of the vote; Benford 33 percent. 

Along with statewide and regional runoffs, voters in districts throughout the state will also be selecting the Republican or Democratic nominees in a number of House and Senate races. 

House and Senate runoffs