Mississippi has more than 2,600 hair braiders registered to practice their art with the state. And these numbers are only growing. They have more than doubled in the past six years.  

Our neighbors to the southwest, Louisiana, has only 19 people who hold the permit that is required to braid in the Pelican State. This, despite the fact, that Louisiana has a larger number of African Americans and a larger African immigrant population than Mississippi. 

Why is there such a discrepancy?

Louisiana requires hair braiders to receive an “alternative hair design” permit that includes at least 500 hours of classes. And only three schools in the entire state even offer curriculum for that license. 

But in Mississippi, Gov. Haley Barbour signed a law that freed the state’s African hair braiders from the irrelevant and unnecessary requirements of the Board of Cosmetology in 2005. Prior to that, hair braiders who wanted to teach others, such as Melony Armstrong, had to spend upwards of 3,200 hours in the classroom to learn cosmetology instructions that didn’t relate to hair braiding. 

After the Institute for Justice filed a lawsuit against the Board on behalf of Armstrong, along with Christina Griffin and Margaret Burden, two women who wished to learn hair braiding from Melony and become licensed, the Mississippi legislature responded by freeing hair braiders and exempting them from cosmetology regulations. 

And as we have seen, an economic boom has occurred within this profession. 

Now, hair braiders only have to pay a $25 registration fee and complete a “self-test” on infection control. And despite what proponents of licensing might offer, even with the repeal of most regulations, there were zero health and safety complaints filed against braiders in Mississippi between 2006 and 2012. 

The story of Melony Armstrong has been told many times in the fight for economic liberty, both in Mississippi and throughout the country - deservingly so. 

This isn’t much different than the lawsuit filed yesterday on behalf of Dipa Bhattarai, an eyebrow threader who is originally from Nepal, where threading is a way of life. Bhattarai was running two successful stores employing four people, while in college, until the state shut her down. 

Mississippi law requires eyebrow threaders to take 600 hours of classroom instruction, even though they won’t learn anything about threading in class. Rather, they will just spend thousands of dollars while not being allowed to work. 

The cases of Melony Armstrong and Dipa Bhattarai are classic examples of government overreach and licensing boards having the power to regulate – and limit – who can practice within their field. 

But as we saw with hair braiders, we can eliminate needless licensing barriers, put people back to work, and help improve the economy for everyone. 

The requirements to obtain an occupational license before working is a growing problem throughout the country. And Mississippi is certainly not immune to this current situation. 

Dipa Bhattarai knows the problems with the system all too well. She started a successful eyebrow threading business, only to have it shut down by the state. Mississippi law requires eyebrow threaders to obtain 600 hours of classroom instruction, to pay thousands of dollars, and to pass two exams.

Did I mention that nothing in those classes or on those exams covers eyebrow threading?

There once was a time when occupational licensing was reserved for those occupations that most would agree should be licensed. This includes medical professionals, lawyers, or teachers. But those days are long passed.  

Today, approximately 19 percent of Mississippians need a license to work. On average, licensing for low and middle-income occupations in Mississippi requires an individual to complete 155 days of training, to pass two exams, and to pay nearly $200 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. All very real numbers.

What can we do?

Mississippi has made progress. In 2017, the state adopted an occupational licensing review board to provide direct supervision over occupational licensing laws moving forward. The state has also made it easier for ex-offenders to receive licenses so they can obtain employment and restricted licensing boards from pulling the license of someone who defaults on their student loans. 

All good steps, but they don’t address the underlying problems with occupational licensing. Earlier this year, Arizona Gov. Doug Ducey signed a law that provides reciprocity for all licenses, even though those states don’t do the same for Arizona licenses. A couple other states have since followed suit. And this proposal has won the praise of a Democrat running for president, Andrew Yang. He called the current limits on reciprocity bad for those seeking new opportunities. A Democratic candidate for president praising a Republican governor. It can happen. 

Because this is common sense. Imagine if we needed a different driver’s license every time we crossed state lines. An individual doesn’t forget their craft because they move. Mississippi does have limited reciprocity for military families, but generally speaking the state hasn’t been open to the idea.

A bill that was introduced last session would’ve given out-of-state medical practitioners the right to practice in the state for charitable reasons. It didn’t make it out of committee. We can only speculate as to who is opposed to allowing out-of-state medical professionals to provide charity care in the poorest state in the nation. 

At a time when few states offer reciprocity, it could be a great selling feature for Mississippi. 

But despite bi-partisan support for reform, we also have entrenched opposition. Which is what licensing creates. The state of Utah recently bragged about nabbing unlicensed contractors. New Jersey was able to rid the streets of 29 unlicensed movers. 

It is true that licensing leads to higher wages for those with a license, but it does so by driving up costs for the consumer. A Heritage Foundation report found that Mississippians pay an $800 hidden tax each year because of licensing. And we do this even though there isn’t a clear increase in the quality of service. Rather, it just distorts the free market. Which is why licensing boards are so determined to protect their monopoly. 

Instead, we should trust consumers to make decisions for themselves, not the government or an industry lobbyist. We can do this through market competition, third-party ratings systems, such as an app like Yelp or even Facebook, or through private certifications that allow both the entrepreneur and the customer to decide if that certification is important.  

Because if we really want more jobs and a smaller government footprint, it starts by creating an environment that encourages work; not one that encourages the creation of hurdles and obstacles.

This column appeared in the Mississippi Business Journal on August 8, 2019.

Dipa Bhattarai was an entrepreneur just trying to pursue the American dream. Then the state shut her down.

Bhattarai grew up in Nepal, where threading is a way of life, and learned how to thread at a young age from her family. She came to Mississippi after receiving a scholarship to attend Mississippi University for Women, where she saw an opening in the market for eyebrow threading. 

”My friends loved it when I threaded their eyebrows for them, and kept telling me I should open a business,” said Bhattarai, who is now a graduate student at the University of Mississippi. “I knew it was a great opportunity to bring together my passion for threading and my dream of owning a business.”  

It was. Before long, Bhattarai had her own stores in Columbus and Starkville.

Until the state shut her down.

A graduate student at Ole Miss is trying to pursue the American Dream. Then the state shut her down.

The Mississippi State Board of Cosmetology requires eyebrow threaders to spend hundreds of hours learning cosmetology methods that threaders do not use or need.

In response to these requirements, the Mississippi Justice Institute, the legal arm of the Mississippi Center for Public Policy, has filed a lawsuit on behalf of Dipa Bhattarai in a federal district court. The lawsuit was filed against Attorney General Jim Hood, who helps enforce the licensing requirements, and the Cosmetology Board. 

Eyebrow threading is a safe and simple technique that uses just a single strand of cotton thread to remove unwanted hair. It does not involve skin-to-skin contact between the threading artist and customer, does not reuse the same tools on different customers, and does not involve the use of sharp implements, harsh chemicals, or heat.

Yet, Mississippi law requires eyebrow threaders to obtain an esthetician’s license to practice. But before they can do that, they must complete 600 hours of instructions over a minimum of 15 weeks and pass two exams. Not one hour of the classes covers eyebrow threading.

>> Read more about the case in depth

By comparison, emergency medical technicians, who literally holds lives in their hands, are only required to complete 165 hours of training in Mississippi. 

”Our client is just trying to pursue the American Dream, by putting her own skills and work ethic to use in a safe and worthwhile trade,” said Aaron Rice, the Director of the Mississippi Justice Institute. “Unnecessary laws and regulations are preventing her from doing that.  We want to help people like her fight back against this kind of job-killing red tape.” 

Plaintiff Dipa Bhattarai ran a successful threading business before she was fined and shut down by the state Board of Cosmetology. 

Bhattarai grew up in Nepal, where threading is a way of life, and learned how to thread at a young age from her family. She came to Mississippi after receiving a scholarship to attend Mississippi University for Women, where she saw an opening in the market for eyebrow threading. 

”My friends loved it when I threaded their eyebrows for them, and kept telling me I should open a business,” said Bhattarai, who is now a graduate student at the University of Mississippi. “I knew it was a great opportunity to bring together my passion for threading and my dream of owning a business.”  

Dipa hopes to re-open her business so she can continue to thread, while training and employing other threaders in Mississippi.

Everett White, an attorney with the law firm Sones & White, PLLC, is also serving as co-counsel to Ms. Bhattarai, and is not charging for his legal services.  

“I was really moved by Dipa’s story, said White. “She came here legally from Nepal to attend college and started an eyebrow threading business to support herself. Then the government shut it down based on irrational and unconstitutional regulations drafted by potential competitors. It’s ridiculous.” 

The lawsuit argues that Mississippi’s licensing scheme violates the due process and equal protection rights of unlicensed eyebrow threaders, because it is not rationally related to any legitimate governmental purpose. 

A similar Texas law was struck down by the Texas Supreme Court in 2015. Louisiana, Tennessee, and Arizona all repealed their licensing requirements for eyebrow threading after lawsuits were filed in those states.

“Mississippi’s ban on unlicensed eyebrow threading has nothing to do with public health and safety,” said Rice. “It is an unconstitutional giveaway to special interest groups who want to eliminate their competition. Laws like these hurt workers of modest means and young people like our client who are just trying to get their start in life.”  

Attorney General Jim Hood and the Board of Cosmetology will have 21 days from service of the lawsuit to respond.

The Office of the State Auditor uncovered a raft of issues with the Hinds County School District during a routine audit, according to a release by the office on Monday.

Some of those issues included $50,000 of improper expenses by the district’s finance officer Earl Burke, $54,000 in adjustments that needed to be made to reconcile the district’s bank statements, some credit card statements that weren’t reviewed by the district and $2 million worth of purchases of iPads and Apple laptops that didn’t use a competitive bidding process.

The release also said that auditors found that some spending records had been destroyed before they were reviewed.

Burke, according to audit, was responsible for $50,000 in unauthorized expenses that included:

• A personal car allowance that added up to $33,000 and was never approved by the district’s board.
• Used district funds to make personal purchases such as an in-air internet subscription, a stay in a luxury hotel suite and other unapproved expenses that totaled nearly $10,000.

The iPad and Apple laptop purchases went against state procurement laws, which require competitive bidding for most large purchases.

“This uncontrolled and unlawful administrative spending is not acceptable,” Auditor Shad White said. “It shortchanges teachers and students. It’s not fair for taxpayers. They all have a right to be angry about this kind of administrative spending.

“It results in money going outside the classroom and it violates our spending laws. I expect the district to take swift action to make sure this stops.”

In 2018, the Hinds County School District received more than $63 million in operating revenue, mainly from property taxes ($26.5 million) and state and federal funds ($26.2 million). The district went over its budget by $4.46 million in 2018. 

The district spent 44.7 percent of its budget on instruction, with 39.7 percent spent on support services and non-instructional expenses.

According to numbers released by the U.S. Department of Agriculture, the Mississippi Department of Human Services has the fourth lowest payment error rate nationally with the Supplemental Nutrition Assistance Program.

The low numbers could be a mirage, overshadowed by the state’s use of a consultant whose practices have gotten other states in trouble with the U.S. Department of Justice, which has settled with three states to repay $17 million in unearned bonuses for low error rates. DHS hired the consultant to improve error rates with the SNAP program and the firm earned $424,629 from taxpayers in contracts from 2011 to 2017.

Mississippi’s payment error rate was 2.43 percent on overpayments and 0.49 percent for a total error rate of 2.92. South Dakota was first with a total error rate of 1.04 percent, Idaho was second (2.13 percent) and Louisiana (2.7 percent) was third. The national error rate average was 6.3 percent and only 23 states equaled or were less than the national average.

The error rate in 2017 was 3.29, up from 2014 when the error rate was 1.16 (the USDA didn’t release complete error rate data for all state and territories in 2015 and 2016). States can receive monetary bonuses for low error rates and penalties for higher ones.

Mississippi received nearly $6 million in bonuses while utilizing advice from Julie Osnes Consulting from 2011 until 2017 and could have to pay the money back. The DHS paid her firm $246,270 for their final contract. Osnes agreed on June 18 to pay the U.S. $751,571 to resolve allegations of violations of the False Claims Act by causing states to submit false quality control data.

The way the errors are calculated is a multi-step process. State agencies first randomly select a sample of households that participate in the SNAP program, which adds up to about 50,000 nationally. The state agency staff interview participants and conducted a detailed review of the household’s eligibility. The states then calculate the number of errors. 

The USDA does a check of about 25,000 of the reviewed SNAP cases to assure that the state agency followed proper policy. The state agency then corrects the errors and the USDA analyzes the data to arrive at the national and state payment error rates.

According to the USDA, 60 percent of the errors are with a state agency. These errors can include errors in data entry or application processing or failure to do matching for citizenship, work status or other criteria for eligibility. Forty percent of the errors, according to the USDA, derive from recipients failing to report earnings, assets or expenses.

Taxpayers spent more than $728 million in Mississippi for SNAP for fiscal year 2019. 

Mississippi wouldn’t be the first state to run afoul with the DOJ for using Osnes as a consultant. Three states — Alaska, Virginia and Wisconsin — that employed Osnes as a consultant reached settlements with the DOJ in 2018. Virginia and Wisconsin paid $7 million apiece, while Alaska had to pay back $2.5 million. 

An investigation by the Department of Justice found that Osnes — who was paid by the state of Wisconsin to consult on their SNAP program — used "several improper and biased quality control practices" to lower its error rate and qualify for bonuses to which it hadn't earned. 

According to an archive of Osnes' now-shuttered website, Mississippi received $1.18 million in bonuses for fiscal 2013 for having the lowest payment error rate and $2.7 million in fiscal 2012 for lowest case and procedural error rates. 

Mississippi's first contract with Osnes was a two-year pact that began on October 1, 2011. She received $62,307 for her services in fiscal 2012. In fiscal 2013, her contract netted her consultancy firm $17,900. 

The state and Osnes reached an agreement on a new contract that started on February 2, 2014 and the firm received $53,152 for its work.

DHS continued the deal despite the U.S. Department of Agriculture's Office of Inspector General releasing a report on September 2015 that decried the use of consultants such as Osnes to help with quality control over household eligibility.

The state and Osnes entered another contract starting April 1, 2015 and ended on February 1, 2016, with Osnes paid $45,000 for her services. The department and Osnes reached terms on an extension that started when the first expired. The last payment of $29,541 was made on June 1, 2017 and no more subsequent payments were made, according to an examination of state records.

Nike doesn’t need state incentives to locate a new logistics facility in north Mississippi, but a medical supply business does to relocate to the same area.

Nike announced that it will add to its workforce of 3,200 at four Memphis-area facilities across the state line in Marshall County, just below the Tennessee city of Collierville and conveniently located on Interstate 269. The new facility is expected to open in spring 2020 and create 250 jobs related to logistics and supply chain.

According to Mississippi Development Authority spokesperson Tammy Craft, Nike will receive no subsidies from state taxpayers.

Medline Industries will bring 450 jobs to Southaven in DeSoto County and will receive $3.8 million from state taxpayers, with a $100,000 grant to relocate equipment and a $3.7 million grant for infrastructure, according to Craft.

The distribution hub will cost the company $46 million and the state said in the news release that some of the jobs will be existing positions filled by employees at its Memphis location, but that a large number will be created for Mississippi residents. That adds up to $8,444 per job.

Medline plans to begin operations in Southaven in early 2021.

"Medline's investment in the Southaven community and the creation of hundreds of new jobs marks the beginning of a long-lasting business partnership with the state of Mississippi and a long-term commitment to the people of DeSoto County," Gov. Phil Bryant said in a news release.

Earlier in February, DeSoto County received another heavily subsidized economic development project. German agricultural implement company Krone will receive a $7.3 million in property and inventory tax breaks, in addition to a $250,000 grant to relocate its equipment.

The company is moving its headquarters and 45 jobs across the state line from Memphis to Olive Branch.

Krone could also receive incentives that rebate some income taxes for its employees to the company, provided the workers are paid at least $37,521 annually. That could add up to $675,000 annually over the next decade.

From 2012 to 2017, taxpayers have spent $678 million in just MDA grants alone from 2012 to 2017, or about $19,765 per job.

Medicaid expansion remains deeply unpopular with Mississippi voters, as recently released polling from Mason-Dixon finds and as Tuesday’s Republican primary results certainly did not dispel. 

This is perhaps surprising, given that many people don’t know much about Medicaid. This lack of knowledge has allowed politicians and others to try to sell Medicaid expansion as a cure all for many of Mississippi’s problems. To set the record straight, Medicaid is not a very good parachute for rural hospitals. It’s also not a very good way to boost the state’s economy. Medicaid is not even going to improve health care outcomes for the working poor. Medicaid expansion is going to be far more expensive than anyone predicts. It is also going to squeeze out funding for other priorities, like K-12 education and roads.

In order to understand what Medicaid is, we need to understand who benefits from it. One would think Medicaid most benefits the patients enrolled in it. The academic research indicates otherwise. To understand why, we have to acknowledge that merely holding a Medicaid insurance card does not guarantee health care. Medicaid is not health care; it is a government-subsidized health insurance plan. Compared to private insurance, however, Medicaid insurance is not very good. To begin with, it’s expensive: not for the people on Medicaid, but for the taxpayers who subsidize it. Second, many doctors don’t accept Medicaid because it pays less than private insurance and, sometimes, less than self-paying patients. 

The Affordable Care Act (Obamacare) made a very expensive bet that one group, in particular, would benefit from expanding Medicaid. As it turns out, this bet was wrong. It’s instructive to realize who the ACA did not expand Medicaid coverage to. Not low-income children, who are already covered under a program called CHIP. Not disabled people, many of whom are languishing on home and community based Medicaid waiting lists. Not the elderly, who are already eligible for Medicare. Rather, the ACA expanded Medicaid to able-bodied, working-age adults earning up to 138 percent of the federal poverty level.

Every one of these people already have access to health care, thanks to a federal law called EMTALA, which requires hospitals to treat anyone who enters an emergency room, regardless of ability to pay. Substituting Medicaid coverage for EMTALA coverage will not change the quality of care for most of these patients. Thus, researchers have found that Medicaid expansion “increased the use of health-care services,” but “had no statistically significant effect on physical health outcomes.” In turn, the same team of Ivy League researchers concluded that the primary beneficiaries of Medicaid expansion are hospitals. 

Basically, Medicaid expansion is a backdoor mechanism Mississippi hospitals hope to tap into to pay for the unfunded mandate that is EMTALA. The trick for the hospitals is that Medicaid does not pay very well. Thus, their goal is to steer Medicaid patients toward lower-cost services that will provide a larger profit margin. For some hospitals, this will work. For others, it won’t. The hospitals are willing to roll the dice on Medicaid expansion, but Mississippi voters are not.   

Recent polling by Mason-Dixon found that 55 percent of Mississippi Republican primary voters are less likely to support a candidate who votes for Medicaid expansion. This number soars to 70 percent when voters realize that Medicaid expansion will compete for funding with other priorities, like K-12 education, roads and bridges, and the state retirement system. I believe these voters intuit that Medicaid expansion is a bad bet – not because they don’t care about low-income adults or rural hospitals or poor children (who, again, are already covered by SCHIP!).

Mississippi voters care about all these issues, they just think there are more targeted ways to help each of these groups. Consider that the best way to help the working poor is to encourage them to obtain a good job. Yet, nationwide, more than half of Obamacare Medicaid recipients are not working.

Is it any surprise, then, that Medicaid expansion has been far more expensive than expected in the states that have tried it? According to analysis by Jonathan Ingram and Nicholas Horton, “States have consistently and grossly missed their expansion enrollment projections, already signing up more than twice as many able-bodied adults than they anticipated would sign up at any point in the future.” As a result, Medicaid is squeezing out other state budget priorities, consuming “one out of every three dollars in state budgets.” This includes Indiana, whose 2.0 “reform” cost more in year one than a traditional expansion would have cost and is forcing lawmakers to find new sources of revenue via tax and fee increases. It also includes Arkansas, whose Medicaid expansion cost almost twice as much as predicted, far more than traditional expansion, and whose attempts to rein in costs with a work requirement have been nullified in court.

If state lawmakers want to help rural hospitals, they should craft a credible plan to do so. Likewise, there are many ideas – ranging from deregulating charity care to encouraging nonprofit hospitals to do their fair share – that could increase health care access for low-income, able-bodied adults. Throwing Medicaid money at these problems would be a lazy, foolish, and expensive gamble. Mississippi voters know better.

This column appeared in the Clarion Ledger on August 11, 2019. 

The Reeves/ Waller and Fitch/ Taggart battles aren’t the only runoffs for Republican nominations on August 27. There are a number of runoffs in legislative races, many including incumbents who are hoping to be back for another term.

Here is a look at the runoffs for incumbents:

Senate District 1: Sen. Chris Massey of Nesbit received the most votes with 45 percent. He will face Hernando alderman Michael McLendon, who finished second with 30 percent, in the runoff.

House District 88: Rep. Gary Staples of Laurel finished second, winning 34 percent of the vote. Ramona Blackledge, the longtime Tax Assessor/ Collector in Jones County, led the field with 47 percent. 

House District 95: Rep. Patricia Willis of Diamondhead received 31 percent of the vote. Jay McKnight, a small businessman, led with 38 percent.

House District 105: Rep. Roun McNeal of Leakesville finished second with 37 percent of the vote. He trailed Dale Goodin, a longtime public school teacher and administrator, who received 42 percent of the vote.

House District 106: Rep. John Corley of Lumberton received 31 percent of the vote. Jansen Owen of Poplarville, an attorney, led the pack with 41 percent. 

House District 114: Rep. Jeffrey Guice received the most votes at 43 percent. Kenneth Fountain, the Chairman of the Jackson County School District Board, finished second with 35 percent.

Three Republican incumbents have already been defeated in the House: Reps. Greg Snowden, who is also the Speaker Pro Temp, Jeff Smith, who is the Ways & Means chairman, and William Shirley.  

Additional legislative runoffs in the Republican primary for open seats: