Tying annual increases of K-12 education spending to the price of consumer goods for urban consumers, depending on which measure is used, could become very expensive for taxpayers.

Increasing K-12 education spending commensurate with the 18 percent cumulative rate of inflation suggested by public education advocates would’ve added up to $1.042 billion in additional spending between 2007 and 2017. These figures include federal, state and local revenue.

Synchronizing increases in K-12 spending to the Consumer Price Index from the U.S. Bureau of Labor Statistics (21.9 percent cumulative rate of inflation) would’ve hit taxpayers with $1.228 billion in additional spending during that time.

The Consumer Price Index measures the average change, over time, in prices paid by urban consumers for various goods and services, including food, beverages, health care, insurance, housing, and energy. 

That includes electricity rates and gasoline prices.

Mississippi, according to data from the U.S. Census Bureau, has 51.2 percent of its total population living in rural areas.

The furor over inflation and whether K-12 spending needed to be more closely tied to it came out of a report issued by state Auditor Shad White’s office. 

The report by the auditor’s office showed that the growth in K-12 spending on administrative and other non-classroom costs from 2007 to 2017 outpaced the increase in the amount spent in the classroom. 

According to the report, administrative costs increased 17.67 percent during the decade, while instruction costs increased 10.56 percent.

The amount of money being spent overall (federal, state and local) on K-12 education in Mississippi increased 12.89 percent from 2007, when it was $4.9 billion, to 2017, when it was up to $5.5 billion.

This inflationary data might not be applicable to government spending on K-12 education, except in a few cases. 

According to BLS data, the annual rate of increase for food and beverage prices for urban customers averaged 2.3 percent.

Diesel is needed to fuel school buses and national retail prices, according to data from the U.S. Energy Information Administration, averaged $3.17 per gallon due to five years of prices of $3.80 and higher in the South. 

Diesel prices from 2013 to 2017 decreased from $3.92 to $2.65, a drop of 32.39 percent.

White’s report isn’t the first time that alarms have been sounded over increasing administrative costs. 

The Joint Committee for Performance Evaluation and Expenditure Review (PEER) released a report in 2015 that showed spending from 2005 to 2015 on instruction decreased by 3.2 percent while that spent on administration increased by 13 percent.

According to data from the state’s Legislative Budget Office, federal and state taxpayers have spent about $3.426 billion on average in the last four years for K-12 education, which averages about 16.3 percent of the state’s total budget when all revenues (general fund, special funds and federal funds) are considered.

These figures don’t include local property taxes and other revenue, such as 16th section land lease income.

Mississippi recently hosted its largest pro-life walk yet. 

Three-hundred and fifty eight registered walkers and 52 partner churches raised over $70,000 for The Center for Pregnancy Choices Metro Area at their first annual LifeWalk. This exceeded their goal by over $20,000. 

Due to generous local business partners underwriting the event, 100 percent of LifeWalk proceeds will go to serving the women of Hinds, Rankin, and Madison counties facing unplanned pregnancies. 

The CPC Metro Area offers free and confidential medical-quality pregnancy tests, high-quality sonograms, options counseling, literature, parenting classes, referrals to community services, infant supplies, and prenatal vitamins. They are funded solely from the generosity of local Mississippians, their businesses, and their churches. 

The two clinics in North Jackson and Fondren are staffed with registered nurses and trained decision specialists. Their medical capabilities are made possible by their medical director, two volunteer radiologists, and a pharmacy that provides prenatal vitamins. 

Truly, the Jackson area community makes their mission possible. 

Each of the 52 participating churches had a Walk Ambassador who assembled their own walk teams. Each walker raised their own sponsorship in their respective spheres of influence and set personal goals accordingly. Highland Colony Baptist Church stands out as a church that went above and beyond, raising the most funds of any participating church. Nine families raised $1,000 or more for the clinics, while 22 others raised $500 plus by their own accord. First Baptist Church in Raymond formed the largest team, with 32 walkers. A young woman from Clinton raised over $2,700 as an individual. Funds poured in from Madison, Ridgeland, Jackson, Flowood, Brandon, Pearl, Terry, Florence, Raymond, Clinton, Star, and Pelahatchie.

It is abundantly clear—Mississippi is a pro-life state. We are ready to put our money where our mouth is. We are literally walking the walk we talk. Following Gov. Phil Bryant signing our Heatbeat Bill this session, recently halted by a court order, we see that Mississippians will not wait for courts to catch up with our progress. 

Neither the state nor federal government fill the gap for the women of Mississippi quite like The CPC Metro Area does. 

Voluntary associations and local philanthropy show us that private institutions and individuals support women in crisis. 

It’s common knowledge that Mississippi receives plenty of negative coverage in the news. Whether it's fair or not, Janelle Hederman and her brother, Will, are working to change that. 

They view their Airbnb property as a place that provides a positive, engaging, Southern experience for those visiting; a counter to the less than favorable image some have of the state. That’s a good thing.

Janelle and Will have been hosting for five years now. They split the work of the Airbnb half and half. Will, who resides in Texas, handles the online element and bookings, while Janelle restocks the property with necessities and takes care of the things that can’t be done via computer. 

The property sits up against the reservoir in Rankin county. Wood paneling lines the walls of the house of this house with a very 60s feel about it. The Hedermans bought the property, which had been in the family, from their cousins six years ago. They knew that such a peaceful location shouldn’t be wasted, but at the time, neither lived in the state. The Hedermans did not want a long-term renter and the property was already furnished so it seemed more economical and efficient to sign on with the then-up and coming Airbnb. 

The big question was who would vacation in Rankin county. Over 150 bookings, 600 people, and five years later, that question has been answered. 

Guests have ranged from in-state, California, Nebraska, Minnesota, and Kansas, to the United Kingdom and France. They even come from minutes away as in the case of two medical students who initially came for a month to study. They ended up staying for two. The Hedermans have also hosted students and their parents, bass fishermen, softball and soccer teams, family reunions, and wedding rehearsal dinners. They’ve even had people come film music videos and documentaries on the property.

When asked what the draw is about Airbnb, Janelle thinks that it comes down to how economical it is. The Hedermans property has bedding for 12 people, however, it can accommodate more. The sports teams have brought the most in, consisting of 15 or 16 people. In addition to the economy of Airbnb, entertainment is provided. The Hedermans have fishing poles, john boats, and canoes all ready to be taken out on the reservoir, along with plenty of space for kids to run around the yard. It’s all part of the welcoming experience.      

While the city of Jackson considers regulations that would drive most Airbnb operators out of town, the Hedermans have already had to fight for theirs. Two years ago, Pearl River Valley Water Supply tried to put an end to Airbnb in the area. In the end, PRV did not succeed in eliminating Airbnb properties, but the issue did bring up concern regarding property rights. Janelle says many neighborhoods already have covenants that address whether residents can rent their property out or not and thinks it should be left that way. 

There’s no need for any overhead government or government agency to come in and tell neighborhood residents what they can or can’t do. 

According to Janelle, Airbnb is in the middle of a Southern clash; on one hand, Mississippians are friendly and want the comfort of knowing everyone in their neighborhood without strangers coming and going. On the other hand, companies like Airbnb can have a significant impact on economies, which Mississippi needs.

As a resident of Belhaven, Janelle believes Jackson’s economy itself could use a facelift. As to concerns about strangers coming and going, Janelle says Airbnb is based on the premise of the Golden Rule. The company has a system in place to hold everyone accountable. Just like guests have the ability to rate a property and leave a review, hosts can do the same for guests. Once you have a bad review as a renter, there’s little chance a host will be willing to take you on again. 

In Janelle’s experience, the majority of Airbnb users are good, honest, hardworking people looking to have a good time and a good experience in a quiet place. Ultimately, Janelle is convinced that the concern of not knowing one’s neighbors should give way to the economic factor.

Janelle is confident that having Airbnb makes people more comfortable in coming to the state, and once they are here, an opportunity to show them all the good happening throughout the state, opens up. 

Possibly changing negative minds about Mississippi. 

Gov. Phil Bryant has signed legislation that creates a first-in-the-nation tax credit for targeted investments in Mississippi’s foster care system. 

Sponsored by Rep. Mark Baker (R-Brandon), The Children’s Promise Act (HB 1613) will provide concrete assistance to nonprofit organizations working on diverse problems around the state, including human trafficking, opioid addiction, and autism.

Dr. Jameson Taylor, Vice President for Policy with the Mississippi Center for Public Policy explains why this legislation is so important: “No one person or entity has all the answers when it comes to foster care. This tax credit will crowdsource the solutions by inviting new donors to support the development of much-needed services to children and families in crisis.”

According to the National Council of Nonprofits, tax incentives for charitable giving generate as much as a 5 to 1 return. Some of the Mississippi nonprofits eligible for this credit receive no government money, meaning that every child they divert from foster care saves money for the state. 

One of these is Baptist Children’s Village. Others, like Canopy Children’s Solutions, are leveraging modest grants into multimillion dollar savings for the state. In addition, these nonprofits are generating significant long-term savings by helping to break cycles of abuse, poverty and welfare dependency.

“Due to changes in federal funding, foster care providers are being forced to reorient their services,” said Taylor. “Some of them are closing certain facilities, others are facing closure altogether. The Children’s Promise Act creates an innovative funding model that will help foster care nonprofits proactively work with the Department of Child Protection Services (CPS) to continue to address the challenges raised by the Olivia Y lawsuit.”

In 2018, the legislature passed a $1 million tax credit for individual donations made to nonprofits working with foster care kids, disabled children, and low-income families. This program was based on a successful model in Arizona. HB 1613 expands this individual credit to $3 million. The Children’s Promise Act also creates a $5 million business tax credit targeted toward nonprofits working directly with CPS. Mississippi is the first state in the country to enact a business tax credit for donations to foster care providers. 

“This new law will encourage game-changing investments in foster care,” concluded Taylor. “Mississippi is continuing to lead the way in transforming lives and communities by passing best-in-the-nation welfare reform and, then, empowering the private sector to work alongside government in addressing generational poverty.”

The Children’s Promise Act is endorsed by the Mississippi Center for Public Policy, the Mississippi Association of Child Care Agencies, and the Governor’s Faith Advisory Council.

A report by State Auditor Shad White’s office says that despite decreases in both the number of K-12 students and teachers in the last decade, spending on administration and non-instructional costs grown faster than classroom costs.

Administrative costs have ballooned by 17.67 percent ($822 million to $968 million), while instructional costs have grown in comparison by 10.56 percent, increasing from $2.2 billion in the 2006-2007 school year to $2.4 billion in 2016-2017. 

Administrative costs are defined by the report as including superintendent and district spending, principal and school office costs not related to instruction, operations and maintenance of district offices, non-student transportation, supervision and training of non-instructional staff and information services.

This increase in non-instructional spending has occurred despite a large decline in enrollment in Mississippi’s public schools. There were 494,135 students enrolled in the 2006-2007 school year and that shrunk to 481,428 in 2016-2017, a decrease of 2.5 percent. 

That decline is even more pronounced this school year, as there are now 4.75 percent fewer students enrolled in Mississippi public schools as compared with the 2006-2007 school year.

The number of teachers has also declined 8 percent, going from 34,390 in 2007-2008 to 31,662 in 2016-2017.

According to the report, if the amount of federal, state and local money spent on outside the classroom spending decreased every year at the same rate of the decline in the number of students, Mississippi taxpayers would be spending $358 million less annually on these costs. 

Doing this would’ve increased the percentage of K-12 spending in the classroom from 57 percent to 63 percent of all education spending.

Just keeping these costs the same as 10 years before would’ve meant there’d be $285 million more to spend annually on instruction or teacher pay hikes.

A decade ago, taxpayers spent $10,597 per student in public schools, with $4,608 spent per student outside the classroom. In 2016-2017, that amount was up to $12,390 per student, with $5,411 of that spent on non-classroom expenditures. That represents an increase of $803 per student.

The biggest percentage increase in the outside the classroom spending accounts were administrative staff services (up 113 percent) and information services (103 percent).

One example of this administrative bloat is in the Jackson Public School District. This district has earned an F grade in the Mississippi Department of Education’s annual accountability grades in the last two years, yet the state’s second largest school district has 265 central office employees or 96 per each of the district’s more than 25,000 students. 

DeSoto County, the state’s largest school district with 34,000 students, has a central office with 141 positions or about 241 students per administrator.

There are student enrolled in the Mississippi Prepaid Affordable College Tuition Program and heading off to college that are the same age as the plan’s net deficit: 17 years old. 

According to the most recent report by State Treasurer Lynn Fitch’s office that was released in June 2018, the unfunded liability of part of the plan is $127 million and growing at the rate of 6.3 percent per year. The plan, if the deficit continues, will be insolvent before the end of fiscal 2028.

The problem for taxpayers is that they will be on the hook for the deficit, as the plan is guaranteed by the full faith and credit of the state.

One of the reasons for the plan’s financial woes is the rapid increase in the cost of attending college.

According to the latest report from the College Board, the national average tuition and fees at a public four-year school have increased 69.93 percent from $6,020 in 1998-99 to $10,230 this year. The plan assumes a 5.5 percent annual increase in the cost of attendance in its financial projections, which about 2.2 percent more than the national average cost increase.

MPACT is what is known as a 529 plan, which have tax advantages are designed to encourage saving for future educational costs. There are two types of these plans: prepaid tuition plans and educational savings plan. MPACT is the former and parents pay into the plan, which then covers tuition and other expenses.

In 2012, the board that manages MPACT voted to stop accepting new enrollees because of the plan’s financial woes. After an audit in 2013, the plan was split into two plans: Legacy and Horizon and began accepting new enrollees.  

As of June 2018, the Legacy plan has $278 million in assets, but has $405 million due in the form of tuition and expenses to be paid to plan participants. 

MPACT does have investment income, but like with pension funds, the decade-long bull market hasn’t generated enough returns to smooth over the annual shortfall. A 2016 study found that the plan would be insolvent by 2025 and that date has been pushed back three years thanks to better-than-expected investment returns.

Legacy plans were those purchased from the plan’s creation in 1996 by the legislature until 2012. Despite an expected rate of return on investment of 6.8 percent, the plan is only 69.67 percent fully funded. 

Those numbers will likely get a lot worse, since Legacy plans are closed to new enrollees.

According to 2016 projections, the Legacy plan will have a $401 million deficit by 2032 and a $628 million hole by 2038. 

The Horizon plans were those purchased since 2015. These plans are fully funded, up to a rate of 113.08 percent. Those plans have $35 million in assets and $29.4 million due for tuition and fees. The Horizon plan assets will not be used to pay Legacy benefits and vice versa.

MPACT was nearly fully funded as recently as fiscal 2007, when it was 95.2 percent. That fell to 84.3 percent as MPACT’s market value dropped from $207 million to $192 million.

There are differences in the plans that are designed to help the plan’s long-term financial health. For one, the Horizon plans are anywhere from 60 to 90 percent more expensive than their corresponding Legacy equivalent.

Legacy plans pay 100 percent of public in-state undergraduate tuition rates and mandatory fees. For out-of-state or private institutions, MPACT pays a rate equivalent to a weighted average of tuition and fees at Mississippi public colleges and universities. 

Horizon contracts are the same as Legacy ones for in-state public community colleges and universities and the weighted average for out-of-state or private institutions. Where Horizon contracts differ are specialty courses of study. If the specialty course of study exceeds the standard undergraduate tuition rate at the institution, MPACT won’t cover all of it.

Also, Legacy plan holders have 10 years to use their benefits from their projected college enrollment date. Horizon contracts are allowed up to eight years.

If the plan was eliminated by the legislature, any qualified beneficiary that was accepted by either a state university or community college or a private, accredited institution either in state or out of state and within five years of enrollment would be entitled to the complete benefits of the program.

Any other contract holders who didn’t meet the above criteria would receive a refund of the principal paid into the program, plus interest.

Today is a day to celebrate, if that’s the right word, as it is represents how long Americans have had to work in 2019 to pay the nation’s tax burden. It is now known as Tax Freedom Day. Congratulations, you are now able to keep the rest of the money you earn.

In 2019, Americans will pay $3.4 trillion in federal taxes, according to the Tax Foundation, and $1.8 trillion in state and local taxes. Income taxes, federal, state, and local, take the longest to pay, followed by payroll taxes, sales and excise taxes, and property taxes. 

While Tax Freedom Day came before February 1 one hundred years ago before steadily moving later in the year throughout the 20th century, it has been moving in the right direction over the past few years. It was April 24 in 2015. 

And on another bright side for Mississippians, we have actually been free since last week. New Yorkers, on the other hand, won’t be free until May 3. 

That greedy, no-good 1 percent

Who pays most of the taxes in America? Though it makes a good talking point, the “1 percent,” or the rich in our country, don’t get by with paying little to no taxes while the working man or woman has to foot the bill for everything. Higher income earners don’t pay lower rates as some like to claim.

These comments might win you the Democratic nomination for president, but we can look at the actual data provided by the federal government and see the true story. 

In 2016, the top one percent of income earners paid 37 percent of federal income taxes despite earning less than 20 percent of the total adjusted gross income in the country, and, obviously, being just one percent of earners. The top one percent also paid a federal tax income rate of 26.9 percent. 

Ninety-seven percent of income taxes were paid by just half of all taxpayers. Meaning the bottom 50 percent of earners paid just three percent of total income taxes. They also had the lowest tax rate of 3.7 percent. 

That is because America has a very progressive tax structure. The more you make, you don’t just pay more in taxes proportional to your earnings, you also pay a higher percentage as a reward for your hard work.

So celebrate your Tax Freedom Day, maybe you can go and get a drink, and don’t worry about that 7 percent sales tax and the 1-3 percent local sales on top of that.