A few years ago, the Mississippi legislature adopted a cottage food operators law, bringing the industry, those who bake goods at home and then sell to the public, into the light.

Cottage food operators, who have annual gross sales of less than $20,000, are given the freedom to sell goodies they bake in their own home, without the government inspecting their kitchen or providing a certificate.

Because of this law, those who had long been baking without asking government now had permission from the state. However, the law is limited. Many states don’t have limits on sales. Mississippi does and such limits are artificially low. Additionally, cottage food operators aren’t allowed to post images of their products for sale on Facebook, Instagram, or anywhere else on the web. These are just two of the many restrictions.

As a result of the internet exclusion, the Department of Health has sent cease and desist letters to the rogue operators who posted pictures of their creations online. The legislature attempted to mend this peculiar prohibition this year.

A bill sailed through the House that would have permitted online postings of food you bake at home. It also slightly raised the cap for gross sales to $35,000. It quietly died in the Senate without a vote.

Who could be against these entrepreneurs trying to earn a living or perhaps making extra money at home? Naturally, the established food industry. The Mississippi Restaurant Association, on their own website, has called the cottage food industry “problematic,” citing “widespread abuse creating an uneven playing field.”

They like to point to the fact that cottage food operators aren’t regulated by the government. That is true. But it that a bad thing? Instead of the cookie police, bakers are best regulated by the free market. An individual who sells an awful-tasting cookie or cake won’t be in business long.

This isn’t much different than the fight to limit food truck freedom. During much of 2018, the city of Tupelo debated restrictions on food trucks that were operating, and thriving, in the city. Were consumers unhappy with the food they were receiving? No, it was the brick-and-mortar restaurants who were unhappy.

The Tupelo city councilmen who were pushing for restrictions acknowledged they were interested in protecting established restaurants. Never mind the fact that any thriving downtown should welcome and encourage food trucks, it is simply not the business of government to prefer one industry, or one sector of an industry, or one participant, over another.

If the residents in Tupelo didn’t want food trucks, there would be no food trucks. All food trucks are doing is responding to market demands. In doing so, they are serving a consumer niche the way any prospering entrepreneur will. Fortunately, the city council relented and didn’t adopt burdensome regulations that would have driven food trucks out of business.

The legislature could have adopted statewide regulations that would have pre-empted local ordinances limiting food trucks, but they, again, decided it was not something they wanted to do.

The legislature also, once again, passed on a bill that would have allowed intrastate sales of agricultural products directly from the producer to consumers and would have prevented local governments from restricting those sales. This would have also opened the door for the legal sale of raw milk for human consumption.

Again, there was a much larger segment of the industry that didn’t want to see small farmers providing competitive pressure. And they won.

Whenever new entrepreneurs enter the arena, whatever that arena might be, the response from the established interests are generally the same. It doesn’t matter whether it’s restaurants not liking food trucks or cottage food operators, the fight waged against Uber and Lyft by the taxi monopolies, or the fight against Airbnb by the hotel lobby, incumbents will always seek government partners to protect their positions. We should recognize it when we see it.

Every incumbent industry will portray their request for protection as merely seeking fairness or consumer safety. But taxpayers are not simpletons; they are on to this game. They understand that much of these regulatory hurdles are about defending the insider’s market.

Unfortunately for consumers, too often the response by lawmakers is to agree to protect the established interests rather than letting the market choose the winners and losers. That was certainly the case this year.

This column appeared in the Commercial Dispatch on March 20, 2019.

According to a study, wading through Mississippi’s morass of regulations would take 13 weeks to absorb its 9.3 million words and 117,558 restrictions.

Even with 40-hour workweeks and some breaks, that’s not exactly light reading.

The Mercatus Center at George Mason University’s James Broughel and Jonathan Nelson wrote a policy snapshot of Mississippi’s regulatory state as part of a national project to analyze regulatory burdens nationwide.

“We’ve really been pleasantly surprised with all of the interest by state policymakers and state think tanks in finally having some numbers they can apply to regulations on the books,” Broughel said. “There wasn’t any knowledge of how much regulation was in place, so this is one of the first times we’ve cast light on that.”

These regulations can impose huge costs as businesses are forced to comply with them and can also become anticompetitive devices, since many of them are written by the industries that are being regulated.

The two economists used an interesting methodology to study Mississippi and 32 other states so far, with the goal of all preforming an analysis for each of 50 states.

The Mercatus duo downloaded all of the state’s regulations and used a platform called State RegData designed by Mercatus economist Patrick McLaughlin to mine the data by reading and counting it faster than any human reader could.

This tool allows researchers to identify the most-regulated industries by using what are known as restrictive word counts such as shall, must, may not, prohibited and required. In terms of government subdivisions, the biggest regulator, by far, is the Department of Health, with more than 20,000 regulations. That is followed by the Department of Human Services with over 12,000 regulations, and 10,000 plus regulations for state boards, commissions, and examiners.

The most regulated industries in Mississippi in terms of restrictions are:

• Ambulatory healthcare services – 12,981.
• Administrative and support services – 5,513.
• Mining (except oil and gas) – 3,138.
• Hospitals – 2,381.
• Social assistance – 2,306.

Broughel said that Mississippi is roughly mid-pack in the amount of its regulatory framework.  Some states such as New York have a lot more regulations. It would take 31 weeks to read all 22.5 million words in the New York Codes, Rules and Regulations, which has 307,636 restrictions.

The time that it takes to read Mississippi’s regulations is dwarfed by the three years it’d take to read the 112 million words in the U.S. Code of Federal Regulations. Sixty-eight percent of those regulations, Broughel said, have never been amended, which means they’ve never been re-evaluated for relevancy or economic impact.

This number highlights a problem with regulations at both the national and state level.

British Columbia’s government has enacted a law that forces provincial regulatory bodies to eliminate two rules for every rule they write and Broughel said that’s one way for governments to get a handle on regulations that have outgrown their effectiveness. He said states should also consider limiting the total amount of regulations that can be in effect at one time.

Ultimately, states need to figure out how to reduce the regulatory burden to help boost economic growth.

“What we see in Washington and across the states is that we don’t have very good procedures for reviewing regulations,” Broughel said. “The states have administrative procedure acts, the federal government has an administrative procedure act that created procedures for creating regulations.

“But we don’t have very good procedures for reviewing regulations or moving regulations or measuring the effectiveness of regulations. At some point, having more rules becomes counter-productive and it becomes impossible to comply.”

Far too many candidates for office, Republicans and Democrats, believe long-term prosperity can be achieved from increased government spending and centralized programs and plans. But the evidence doesn’t support such claims, no matter how passionately or eloquently the campaigner insists.

If prosperity is our goal, we should follow the lead of high-growth, low-tax states in the Southeast that have lower taxes, lighter licensure and regulatory burdens, and a more limited government.

What does that look like?

There are several policy proposals that we would encourage any candidate for governor, lieutenant governor, or the legislature to support.

Eliminate burdensome licenses 

Burdensome regulations hurt our economy and reduce employment opportunities. All totaled, there are 66 low-to-middle income occupations that are licensed in Mississippi. According to the Institute for Justice, Mississippi has lost 13,000 jobs because of occupational licensing and the state has suffered an economic value loss of $37 million.

While licenses are necessary for a few industries, the state should expand the use of voluntary certifications, adopt automatic sunsets on all licenses, and allow the Occupational Licensing Review Commission to review current, not just newly proposed, licenses. The reality is that we’ve allowed occupational licenses to become the tool for market incumbents, with lobbying apparatus, to build moats around monopolies and limit free-market completion.

Expand education scholarship account program

Mississippi became a national leader in 2015 in implementing an ESA program. Through this program, families are allowed to use the funds associated with their child’s education (i.e., their tax dollars) to choose the best educational setting for their child. For the first time, families in Mississippi, albeit a limited number of families, had a choice in their child’s education, regardless of their income.

Yet, the program is only available to students with special needs, and it serves less than 500 students per year. We should make this program available to every student in the state. By doing so, we’d be following the overwhelming empirical data that shows the benefits of school choice, saving taxpayer dollars, and putting parents back in control of their child’s education.

Cut red tape

Mississippi has more than 117,000 regulatory restrictions in the state rulebook, according to new analysis from the Mercatus Center. Why is this a cause for concern? There is considerable evidence that regulations slow economic growth and have a negative impact on investment, productivity, wages, and overall prosperity.

To reduce red tape, Mississippi should implement a regulatory cap that orders the removal of two olds rules each time a new one is added. A thriving economy is one with fewer regulations, a lighter government touch, and more freedom for small and mid-sized businesses.

Support the innovative economy

When ridesharing companies entered the market a few years ago as disruptors to the taxi monopoly, the unfortunate response from local governments was largely to regulate and limit the ridesharing economy. The legislature made the correct move in enacting statewide policy that preempts local regulation, and allows Uber, Lyft, and others to provide this new service to customers.

When it comes to other disruptors such as Airbnb or mobile food trucks, local governments are again working to protect the status quo and limit market-driven innovation. The state, through the legislature, should protect consumer choice and ensure that local governments cannot stifle competition.

Provide incentives to all businesses by lowering taxes

Mississippi, like many other states, has taken the approach that the only way to attract businesses to the state is by offering targeted taxpayer “incentives.”

Rather than offering tax breaks to a few, allowing the government to play favorites, and requiring business owners to subsidize their competition, we should lower the tax rates on all businesses and make Mississippi the most attractive state for businesses of all sizes and types.

Do not expand Medicaid

Despite the claim of expansion advocates, there is no pile of money sitting around that states are “leaving on the table” when they choose not to expand Medicaid. The fact is that any expansion adds to our federal debt and will cost the state hundreds of millions of dollars.

Medicaid is already a broken system. Adding more patients to the system will exacerbate things, and the patient outcomes will only worsen the poor quality of care currently being provided to the elderly, disabled, and poor. Furthermore, an expansion of Medicaid will certainly crowd out the essential funding needs for schools, roads, and public safety.

We believe these policy proposals represent the path to long-term, sustainable economic growth. Based on the evidence, public policies of economic freedom, individual liberty, free markets, and limited government will allow the state to experience business growth, entrepreneurship, higher labor productivity and wages, and, as a result, greater economic prosperity for all Mississippians who are ready and willing to prosper.

This column appeared in the Clarion Ledger on March 20, 2019. 

The leader of Mississippi’s Medicaid program warned taxpayers Monday that the long-term health of the program is in jeopardy absent reform.

Drew Snyder is the Executive Director of the state Division of Medicaid and he told the Stennis Capitol Press Forum that the national program is unsustainable long term unless “we continue to refine our approach.”

He also cited data from the federal Centers for Medicare and Medicaid Services that says if nothing is done by 2026, one of every five dollars spent in this country will be on health care.

One of the reasons for these increasing costs is that 36 states have expanded Medicaid under the Affordable Care Act. Since the ACA dictates that the federal government cover 90 percent of the costs for expanding eligibility to all individuals earning less than 138 percent of the federal poverty level, the impact to the program’s bottom line is worsening.

Medicaid costs for expansion adults only, according to the CMM, were expected to be $855 billion in new federal spending between 2017 and 2026. That would add up to more than 10,000 F-35 fighter aircraft ($85 million flyaway cost).

Expanding Medicaid eligibility in Mississippi has become a campaign issue in the gubernatorial race, as Lt. Gov. Tate Reeves opposes it and all of the Democratic contenders, including Attorney General Jim Hood, support expansion.

One problem is that Medicaid expansion will cost state taxpayers more than expected. The state Institutes for Higher Education did a study in 2015 that said that it’d cost the state $159.1 million per year by 2025 if 95 percent of the eligible population participated in the expansion (310,039 enrollees).

“A number of states that expanded Medicaid have all made estimates and they’ve all been wrong,” Snyder said. “Louisiana was more than expected. Virginia had more enroll than expected. The numbers vary pretty significantly.”

According to a report by the Louisiana-based Pelican Institute, the state expected 306,000 new enrollees when it expanded Medicaid eligibility, but that number has ballooned to 502,647 according to recent data from the Louisiana Department of Health.

Right now, the federal government pays 76.6 percent of most medical costs and anywhere from 50 to 90 percent of administrative costs. In Mississippi, the program covers 674,000 enrollees, with 56 percent of them children and less than 10 percent of them able-bodied adults. Medicaid covers costs on 67 percent of all births in the state.

Under Synder’s leadership, the agency won’t ask for a deficit appropriation from the legislature for the first time in three years and overall state spending on Medicaid is down 9.4 percent less than it was three years ago.

In fiscal 2016, the state spent more than a billion dollars on Medicaid. This fiscal year, which starts July 1, the agency asked for an appropriation of more than $938 million.

Synder says that one reason for that is decreased enrollment in the program due to an improved economy. He said his division has also eliminated non-critical conducts, come up with a more precise budgets, provided better oversight over vendors and aggressively sought to cut excess spending in the program, including decreasing the division’s workforce by four percent.

A new report outlines the continued generosity of Mississippians.

While many complain that Mississippi is usually first on the bad lists and last on the good lists, Mississippians have always been recognized for their generosity. Another report confirms this.

The Fraser Institute’s Generosity Index measures charitable donations as recorded on personal income tax returns in Canada and the United States.

Because the Fraser Institute  is based in Canada, this report tracks donations from Canada’s 10 provinces and three territories, as well as the 50 states and the District of Columbia. The data is from the 2016 tax year.

The repot calculates the percentage of tax filers donating to charity, the percentage of aggregate income donated to charity, and the average annual charitable donation.

Mississippians gave 1.67 percent of their income to charity, which was good enough for 10th among the 64 states and provinces. Utah was first at 3.18 percent, followed by Georgia (2.31), Arkansas (2.07), Alabama (1.86), and Idaho (1.78).

The average annual charitable donation was $7,135, which was good enough for 13th. Wyoming was first with $12,991, followed by Arkansas ($10,935), Utah ($10,165), South Dakota ($10,020), and Tennessee ($8,644).

The report also showcased the noticeable differences between giving in the United States and Canada. The 13 Canadian provinces and territories took 13 of the bottom 14 spots when it came to percentage of aggregate income donated to charity. West Virginia’s 0.74 percent was slightly below Manitoba’s 0.76 percent.

But on average annual donation, the Canadian provinces and territories took the bottom 14 places.

Gov. Phil Bryant joined officials from Kohler Industries Tuesday to celebrate a $20 million expansion of the Wisconsin-based company’s Hattiesburg facility.

Just a few miles away, both the Forrest County Board of Supervisors and the Hattiesburg City Council held separate meetings before the governor’s news conference.

The two government bodies met to approve a settlement with Kohler that will require the county and city to reimburse it for $1.2 million in tax payments, according to a story in the Hub City Spokes.

According to Tammy Craft from the Mississippi Development Authority, Kohler will receive $2.6 million to relocate equipment and $300,000 for workforce training from state taxpayers. The city and county are providing tax exemptions and assistance for infrastructure improvements.

The company says it’ll be consolidating its North American manufacturing operations from Wisconsin to Hattiesburg, where the company will lease an additional 300,000 square feet where failed solar panel manufacturer Stion was located.

The company will continue to manufacture small, twin-cylinder engines for use in zero-turn and residential lawn mowers and the new facility is supposed to create 250 full-time jobs. The state incentives alone add up to $11,600 per job.

Stion closed its Hattiesburg operation in 2017 and still owes state and local taxpayers more than $93 million in incentives.

Kohler, Forrest County and the city of Hattiesburg reached a deal in 1996 to lure the company, which built a small engine manufacturing plant in the Forrest County Industrial Park. The city and county denied a Kohler an exemption on its taxes in the 2010 tax year after honoring it from 1998 to 2009.

Kohler sued in 2014, asking for a full refund on the taxes the company paid since 2010. The agreement says the taxpayers will pay for the settlement, interest free, over a 10-year period.

The company asked for $2 million in its lawsuit.

Few items can unify Americans more than a universal disdain for the government.

A recent Axios Harris Poll tracked the reputation of the most visible brands in America to find who is the most liked, and the most disliked. The scores were broken down into several categories: affinity, ethics, growth, products/ service, citizenship, vision, culture, character, trajectory.

Wegmans, a supermarket chain in the Northeast and mid-Atlantic, topped the list. They were followed by Amazon, Patagonia, L.L. Bean, and Walt Disney.

On the other end of the spectrum? The U.S. government, coming in dead last, behind a tobacco company, a bank with a fake accounts scandal, a bankrupt retail chain, and the Trump organization.

And there is no partisan divide. Republicans ranked the government 95, Democrats ranked it 98, and independents ranked it dead last. Among category scores, the government came in between 96 and 100 on each. Although to be fair, the growth rating of 98th is a little low. If there is one thing the government is doing, it is growing.

The survey represents a national sample, and was conducted from November through January. The first group, 6,118 adults, was asked to identify two companies they believe have the best and worst reputations. Then, the 100 “most visible companies” were ranked by a second group of 18,228 adults.

Wednesday was the fourth big deadline in the Mississippi legislature for general, non-revenue, bills to be approved by the entire opposite chamber.

The next deadline for legislation is Tuesday, the final day for floor action on appropriations and revenue bills from the other chamber.

Here are the some of the bills that survived and others that died:

Still alive

House Bill 1352 is sponsored by state Rep. Jason White (R-West) and is known as the Criminal Justice Reform Act. The bill would clear obstacles for the formerly incarcerated to find work, prevents driver’s license suspensions for controlled substance violations and unpaid legal fees and fines, and updates drug court laws to allow for additional types of what are known as problem solving courts.

The bill passed the Senate by a 49-2 margin. The bill will have to go to conference with the House to iron out the differences between the original and the altered version that passed the Senate.

House Bill 1205 would prohibit state agencies from requesting or releasing donor information on charitable groups organized under section 501 of federal tax law. The bill, sponsored by state Rep. Jerry Turner (R-Baldwyn), was passed by a 32 to 18 margin in the Senate margin after being amended to include all organizations covered by section 501 of federal tax law.

SB 2781, known as Mississippi Fresh Start Act, is sponsored by state Sen. John Polk (R-Hattiesburg). This bill would eliminate the practice of “good character” or “moral turpitude” clauses from occupational licensing regulations, which prohibit ex-felons from receiving an occupational license and starting a new post-incarceration career.

The bill was amended with a strike-all that made it identical to the original House bill. The bill was passed by the House by a 114-2 margin and was amended twice more on the floor, meaning the differences between the present guise of the bill and the original will have to be settled in a conference committee later in the session.

SB 2901, known as the Landowner Protection Act, would exempt property owners and their employees from civil liability if a third party injures someone else on their property.

The bill is sponsored by state Sen. Josh Harkins (R-Flowood). The bill has been returned to the Senate for concurrence. If the Senate doesn’t agree with the changes by the House, the two sides will have to settle their differences with the bill in a conference committee.

SB 2603 would reauthorize motion picture and television production incentives for out-of-state firms that expired in 2017.

The bill sponsored by state Sen. Joey Fillingane (R-Sumrall). The bill was passed by the House on March 7 by a 101- 16 margin and has been returned to the Senate for concurrence.

HB 1612 would authorize municipalities to create special improvement assessment districts that would be authorized to levy up to 6 mills of property tax (the amount per $1,000 of assessed value of the property) to fund parks, sidewalks, streets, planting, lighting, fountains, security enhancements and even private security services. The tax would require the approval of 60 percent of property owners in the district.

The bill is sponsored by state Rep. Mark Baker (R-Brandon) and passed the House 93-22 Thursday after failing to get a two-thirds majority on its first pass on the floor. It’s been referred to the Senate Finance Committee.

HB 1204 would allow a municipality or county to execute the winning bid in a sealed bidding process if a judge hasn’t ruled on a protection request for bids within 90 days. The bill is sponsored by state Rep. Turner and was passed by the Senate on Tuesday.

More dead than fanny packs

HB 702 would’ve allowed cottage food operators to increase their maximum sales to $35,000 and advertise their products on the web. The bill was sponsored by state Rep. Casey Eure (R-Saucier) and didn’t get a vote in the Senate despite passing the House by a 117-0 margin.

HB 1268 would’ve clarified state law regarding constitutional challenges to local ordinances. With local circuit courts acting as both the appellate body for appeals on specific decisions (such as bid disputes) and the court of original jurisdiction, there’s been confusion among judges regarding the law that governs challenges of local decisions, which are required within 10 days.

City and county attorneys have used this 10-day requirement on decisions to get new constitutional challenges — which are new lawsuits and not appeals of decisions — thrown out of circuit courts. This law would’ve added language that would prevent application of the 10-day requirement to constitutional challenges.

The bill was sponsored by state Rep. Dana Criswell (R-Southaven).