The quest by Rep. Mark Baker (R-Brandon) to reauthorize administrative forfeiture in Mississippi is gaining national attention. And not necessarily for the right reasons.
Last week, a coalition of numerous conservative organizations, in Mississippi and nationally, including Mississippi Center for Public Policy, Mississippi Justice Institute, American Conservative Union, Empower Mississippi, FreedomWorks, Institute for Justice, and Right of Crime sent a letter to Gov. Phil Bryant, Lt. Gov. Tate Reeves, and Speaker Philip Gunn asking them to oppose the reauthorization.
“Conservatives rightly understand that private property rights are the bedrock of a free society, and the bar must be high for a government to seize property from its citizens and transfer ownership to the state through forfeiture litigation,” the letter reads. “Civil forfeiture is controversial because it often means innocent people losing their property to the state in processes that are complex and divorced from the prosecution of the crime that was the basis for the initial seizure.”
One of the preeminent Constitutional scholars in the country has also weighed in.
“Mississippi legislators should think hard before reinstating the controversial and questionable practice of administrative (sometimes called “civil”) forfeiture,” Ilya Shapiro, Senior Fellow at MCPP and the Director of the Robert A. Levy Center for Constitutional Studies at the Cato Institute, said. “This is a practice that allows state agents to seize property they allege to have been involved in a crime without so much as a court order. And since these are considered civil actions, property owners get few of the protections typically enjoyed by criminal defendants.
“In many past forfeiture cases, property was stripped away without any conviction, and sometimes without charges being filed at all—and then people had to petition the court and pay exorbitant legal fees to get their stuff back. Administrative forfeiture is simply at odds with basic American principles of fairness, justice, and due process. Reinstating it in Mississippi would be a step backwards, especially when many other states are reforming their laws to bolster property rights, not undermine them.”
In 2017, Mississippi became the 19th state in the country to make reforms to civil asset forfeiture in the past half-decade when the state mandated a searchable forfeiture database. That number is now up to 29 states.
If House Bill 1104 becomes law, this would be a rare instance where a state is actually walking back from reforms.
Film incentives are one of the few programs that are largely popular among legislators regardless of party, while they universally provide a poor return on investment for taxpayers.
There was a time when most states had some kind of incentives for the film industry, but that trend has quickly changed. While 44 states had incentives a decade ago, today just 31 do. Others, like Mississippi, have quietly scaled back their program.
For the past two sessions, the Senate has killed attempts from lawmakers in the House to extend the non-resident payroll portion of the incentives program. This previously allowed for a 25 percent rebate on payroll paid to cast and crew members who are not Mississippi residents.
Two incentives remain on the books. One is the Mississippi Investment Rebate, which offers a 25 percent rebate on purchases from state vendors and companies. The other is the Resident Payroll Rebate, which offers a 30 percent cash rebate on payroll paid to resident cast and crew members.
House Bill 1128 would bring back the non-resident rebate. Lawmakers should proceed with caution.
A terrible return on investment of taxpayer dollars
A 2015 PEER report shows taxpayers receive just 49 cents for every dollar invested in the program. That means that for every dollar the state gives to production companies, we see just 49 cents in return. If you or I were receiving that return on our personal investments, we would fire our financial advisor. Of course, no one spends his or her own money as carefully as the person to whom that money belongs.
For those looking at a bright side, we are actually “doing better” than many other states. This includes our neighbors in Louisiana, who recover only 14 cents on the dollar. They also have one of the most generous programs in the country; it was unlimited until lawmakers capped it a couple years ago. (Other reports show the Pelican State recovering 23 cents on the dollar, but either way it’s a terrible investment.)
Beyond Mississippi and Louisiana, film incentives are a poor investment throughout the country. Numerous studies have been conducted on film incentives. All sobering for those worried about taxpayer protection. Here is a review of the return per tax dollar given, from 2008 through 2013. In these third-party studies, covering 12 different states, there was not a program that returned even 50 cents on the dollar.
Source: John Locke Foundation
Since this chart was published, studies on similar programs in Florida, Virginia, and West Virginia have shown similar results. No program had a positive ROI.
We have to do it if other people are
One of the commonly prescribed reasons for why need film incentives is it’s “good” for the state to have movies filmed here. As is often the case in government, we focus on the inputs. How many films are made here? What movie star was in Mississippi? That is nice, but the focus should be on outcomes.
The other common argument is that other states are doing it. Throughout the country, producers hold states hostage and threaten to move without incentives. Producers in Mississippi have raised the same point. Again, that is not good reason to essentially throw taxpayer money away.
Simply because another state is wasting money does not mean Mississippi should join them, or continue this practice.
In a comprehensive list of state film production incentives compiled by the National Conference of State Legislatures (NCSL), we see states that do not have incentives for producers but offer tax breaks to everyone, without partiality. For example:
Alaska: No film incentive program. Effective July 1, 2015, the film production incentive program was repealed. Alaska has no state sales or income tax.
Delaware: No film incentive program. However, the state does not levy a sales tax.
Florida: This program sunset on June 30, 2016. It has not been renewed. The state does not levy a state income tax.
New Hampshire: No film incentive program. The state has no sales and use, or broad base personal income taxes.
South Dakota: No film incentive program. There is no corporate or personal income tax in South Dakota.
Our goal should be for Mississippi to have the most competitive business climate in the country. The tax breaks that a few chosen industries or companies receive should be made available to all.
When we do that we will remove the need for taxpayer funded incentives.
When Mississippi law enforcement agencies want to keep property they have seized from a property owner, they now have to prove to a judge that the property is connected to crime.
In a deeper analysis by the Mississippi Center for Public Policy of the state’s asset forfeiture database, 135 of 315 seizures listed in the first 18 months of the database had neither proximity to drugs or distribution of paraphernalia or funds directly traceable to the drug trade. That means 42.9 percent of all forfeitures were considered to be catch-all violations of the state’s Controlled Substances Act without any of the above justifications.
Right now, the state only has civil asset forfeiture which requires judicial oversight, but that could change.
House Bill 1104 is authored by state Rep. Mark Baker (R-Brandon) and it would bring back administrative forfeiture that expired on July 1. This type of forfeiture was for property valued at $20,000 or less and required only a notification to the property owner without any judicial oversight.
The bill will likely make it to the House floor out of the committee Baker chairs, the Judiciary A Committee.
Gov. Phil Bryant has already tweeted his support for the bill, saying that he is “standing with law enforcement.” He said if the bill makes it to his desk, he’ll sign it.
There are procedures provided under the law for forfeiture.
One of those procedures is that, when an agency seizes a vehicle, cash, a weapon or other property, they have to provide the property owner a Notice of Intent to forfeit that property. Most law enforcement agencies use a boilerplate form with six boxes that give a general reason for the forfeiture.
Without doing public record requests for specific incident reports from the law enforcement agencies, these NOIs provide the best view of the justification underlying most forfeitures.
The boxes on the standard forfeiture form include:
- Vehicle is subject to forfeiture under the state law since it was used to transport or facilitate the transport, sale, receipt, possession or concealment of controlled substances or property. The database has 54 vehicles that were forfeited under this provision.
- Money was found in close proximity to forfeitable substances.
- Money was found in close proximity to forfeitable drug manufacturing or distribution paraphernalia.
- Money was found in proximity to forfeitable records of the importation, manufacture or distribution of controlled substances.
- Deadly weapon or money is was used or intended for use in violation of state law.
- Said property subject to forfeiture since it was used or intended for use in violation of state law.
- Money or property being forfeitable since it was the proceeds or derived from proceeds traceable to exchange in violation of the state law.
According to the analysis, 180 of all seizures or 57.14 percent at least had one box checked that included proximity to drugs or distribution paraphernalia or funds directly traceable to the drug trade.
As for the breakdown:
- There were 148 or 46.9 percent of the 315 forfeitures that were in direct proximity to drugs.
- Only 72 forfeitures or 22.8 percent had directly traceable drug proceeds.
- There were 51 seizures or 16.19 percent involving proximity to paraphernalia for distribution.
- Only 27 seizures, or 8.5 percent, had all three: proximity to drugs, distribution paraphernalia and traceable funds.
The Mississippi State Medical Association and numerous other groups want to see cigarette taxes increased in Mississippi. They are certainly free to advocate for that point. However, they should stop their argument at “smoking is bad for you” because their strawman arguments are vague and weak on actual data.
We agree that long-term smoking is a bad health choice. The evidence is overwhelming. Yet, our policy position on the tax issue is based on reason, evidence, and data. We reach these conclusions without bias because our only motive is representing the citizens and the Constitution.
In the response to our policy view, the MSMA authors repeatedly said that every time cigarette taxes have been raised, revenues have increased.
Yes and no. Adjusted for inflation, Mississippi is receiving the same net collections from cigarette taxes as we were in 1975. The overall revenue has increased along with the 500 percent increase in taxes during this time, but real numbers are flat. New York is collecting significantly less, adjusted for inflation, in cigarette tax revenue than they were in the 1970s. Same story in Illinois. In real numbers, revenue is down significantly in those two high-tax states.
The MSMA authors also brushed aside data on cigarette smuggling. But what do we know?
Through statistical research, we can determine Mississippi’s smuggling rate would explode to 35 percent for a state surrounded by low-tax states, something the author did not dispute. As our op-ed authored explained, “The estimate is built around a statistical model, which measures the difference between smoking rates published by the federal government for each state and legal paid sales. There are often yawning gaps between the two — the amount of cigarettes that should be smoked based on sales and the amount of smoking that actually occurs — and that difference is likely explained by smuggling.”
Simply claiming that revenue will continue to increase is not an accurate statement and doesn’t erase the numerous negative side effects that will follow such a large black market. Quoting a report from two scholars on the subject, which was published by the Mercatus Center, “Cigarettes aren't illegal, but governments have artificially raised the price of the product to such a degree that their sale and purchase now is tinged with many of the consequences of full alcohol prohibition. Thanks to "prohibition by price," people commonly smuggle cigarettes across borders, usually illegally, to evade excise taxes.”
The MSMA authors also said higher taxes result in less people smoking.
According to the CDC, while consumption of cigarettes decreased 32.8% from 2000 to 2011, consumption of loose tobacco and cigars increased 123.1% over the same period. As a result, the percentage of total combustible tobacco consumption composed of loose tobacco and cigars increased from 3.4% in 2000 to 10.4% in 2011. The data suggest that certain smokers have switched from cigarettes to other combustible tobacco products, most notably since a 2009 increase in the federal tobacco excise tax that created tax disparities between product types.
The truth is people often confuse a decline in legal cigarette sales with quitting. The number that stop smoking is smaller than that reflected in official cigarette sales precisely because of smuggling and a switch to less expensive tobacco products.
And the MSMA authors said cigarettes are addictive and they kill
We agree with the evidence. And given that, perhaps the appropriate public policy action is to lead a push to ban cigarettes, not make them more expensive? As we know, it is mostly the poor and the middle class who will end up paying this regressive tax.
And should we really use the tax code to punish people for legal behavior that the state objects with? If so, why do we limit it to only one unhealthy/risky behavior? Why not include alcohol, sugary sodas, fatty foods, and risky activities like downhill skiing and playing tackle football before age 14? The reason is that we long ago decided that a free society is made up of citizens who agree to take personal responsibility for their choices and actions. Parents are responsible to teach their children about the dangers of high places, hot stoves and sharp objects; they should also be responsible to each about the dangers of alcohol, cigarettes, and drugs.
Is there a possible free-market option to improving our health and reducing harm for consumers who still want to smoke?
In fact, there are multiple products coming online across the world that are considered “harm reducing” for consumer who still wish to legally “smoke.” In addition to e-cigarettes and vaping products, there is a product on the market in over 20 countries that “roasts” the tobacco and eliminates the combustion. The early data shows it has been highly effective at converting combustion cigarette smokers without attracting new smokers. That product is currently before the FDA seeking approval now in the U.S.
This column appeared at Y'all Politics on January 25, 2019.
Cities in Mississippi have been known to continue to collect taxes even after the tax has expired. And the legislature has supported this.
The city of Baldwyn, located between Tupelo and Booneville on U.S. 45, had its 2 percent tourism tax on restaurants and hotels expire on July 1. Despite notification from the Mississippi Department of Revenue, city businesses continued to collect the tax and have collected $11,983 from it so far this year.
When a tourism tax expires, businesses have the option of refunding customers or continuing to collect the tax and remitting it to the DOR, who then puts it in the general fund.
House Bill 653 would not only reauthorize the tax for another three years, but it’d allow the city to retroactively collect the proceeds from the now-dead tax if it is signed into law by Gov. Phil Bryant.
If HB 653 is signed into law, it’ll be the fourth time in the past three years that a reauthorization for a tourism tax also contained a provision allowing the city to retroactively collect from an expired tax.
Last year, both Southaven and Horn Lake had their tourism taxes expire. Both had provisions in the bills that reauthorized them to allow both cities to collect the tax retroactively and Gov. Bryant signed both into law.
In 2017, Senate Bill 2941 reauthorized the city of Byhalia in north Mississippi to collect its 2 percent hotel tax. The tax actually expired in July 2016, but the city continued to collect it for a year before SB 2941 allowed it to retroactively keep the proceeds.
In Mississippi, tourism taxes start as a local bill in the Legislature. These bills usually benefit a city or county in a legislator's district and are one of the last chores the Legislature wraps up before leaving town at session's end.
Once the local bill is passed, a referendum of local voters is required before the tax can go into effect. The tourism taxes usually have an expiration date of three years from passage.
The same rules that govern the passage of general and appropriation bills apply to the local bills. A three-fifths majority of both chambers are required to pass a new tax, which are pitched as temporary taxes by local leaders.
But they are often reauthorized by a new bill when they expire after three years without input from local voters.
Mississippi Center for Public Policy is excited to announce that Ilya Shapiro will lend his voice and expertise as a Senior Fellow and as the Chairman of the newly formed Advisory Board of the Mississippi Justice Institute.
Shapiro, who clerked for U.S. Fifth Circuit Judge E. Grady Jolly in Jackson, is the Director of the Robert A. Levy Center for Constitutional Studies at the Cato Institute and is regarded as one of the preeminent Constitutional scholars in the country.
“It has long been an American tradition to engage the citizenry in public discussion of the important matters of the day,” said Jon Pritchett, President and CEO of Mississippi Center for Public Policy. “It is a vital component of a functioning republic. Today, we often refer to this as ‘thought leadership’ and I can think of no more thoughtful leader in today’s debates about our liberty than Ilya Shapiro. I’m absolutely delighted and honored that he has joined with us and the other members of the MCPP Contributing Fellows.”
“As Washington is evermore polarized and paralyzed, new ideas will have to come from the states,” Shapiro said. “MCPP and MJI have been developing policy solutions and legal arguments that benefit Mississippians’ daily lives. I look forward to helping with that great and necessary work.”
Shapiro is the co-author of Religious Liberties for Corporations? Hobby Lobby, the Affordable Care Act, and the Constitution (2014), and editor of 11 volumes of the Cato Supreme Court Review (2008-18). He has contributed to a variety of academic, popular, and professional publications, including the Wall Street Journal, Harvard Journal of Law & Public Policy, Washington Post, Los Angeles Times, USA Today, National Review, and New York Times Online, and he regularly provides commentary for various media outlets. Shapiro has also filed more than 300 “friend of the court” briefs in the U.S. Supreme Court.
You can read his full bio here.
As Chair of the MJI Advisory Board, Shapiro will work with MJI Director Aaron Rice to provide input and expertise on the selection and legal strategy for cases in which MJI defends constitutional rights.
“We are thrilled to have Ilya join as the Chairman of the Advisory Board of the Mississippi Justice Institute,” Rice said. “Ilya is nationally respected for his thoughtful and reasoned analysis of constitutional issues, and we are excited to bring his expertise to bear to defend the constitutional rights of Mississippians.”
Along with Shapiro, MCPP has assembled an outstanding and diverse cadre of Contributing Fellows. MCPP Contributing Fellows are a group of academic and private sector individuals who are dedicated to the ideas of personal, economic and religious liberty, limited government, and market-based policy solutions and contribute to these ideas through their research, teaching, speaking and writing.
The inaugural group of Contributing Fellows at MCPP includes:
Matt Allen, Counsel at Brunini Law Firm, and PhD student in Criminal Justice at the University of Southern Mississippi.
Anja Baker, Community Relations Coordinator at the Center for Pregnancy Choices.
J. Brandon Bolen, Assistant Professor of Economics at Mississippi College.
Brandon Cline, the John “Nutie” and Edie Dowdle Associate Professor of Finance at Mississippi State University and Co-Director of the Institute for Market Studies.
Sterling Kidd, Shareholder at Baker Donelson.
Ed Tiryakian, Associate Professor of Corporate Finance and Business Economics at Duke University in Durham, North Carolina.
Claudia Williamson, Associate Professor of Economics and the Drew Allen Endowed Fellow at Mississippi State University and the Co-Director of the Institute for Market Studies.
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MCPP is an independent, non-profit organization that works to advance the ideals of limited government, free markets, and strong families by influencing public policy, informing the media, and equipping the public with information and perspective to help them understand and defend their liberty.
MJI is the legal arm of MCPP, representing Mississippians whose state or federal Constitutional rights have been threatened by government actions.
If you asked most Mississippians whether the state should be able to confiscate cash and property from a person who was never charged with, much less convicted of a crime, the answer would be a resounding “no.”
Yet this is exactly what occurs every day under a practice known as civil forfeiture.
Right now, if Mississippians are accused of a crime, they are tried in a criminal proceeding. But if their property is seized by law enforcement, it instead goes into a civil proceeding, which lacks many meaningful safeguards.
The forfeited property does not even have to belong to the person suspected of criminal activity. Innocent property owners can easily become ensnared in this system. A parent who lets their teenager drive the family car may be surprised to learn they may never get the car back if the teenager is pulled over with drugs in the car, if the parent cannot prove they had no idea about the drugs.
Proponents of civil forfeiture argue that it is an important tool in combating drug trafficking throughout our state. This is a worthy goal, and should be pursued. But it should be pursued in a way that is consistent with basic American principles of fairness and justice. Those include the presumption of innocence and the protection from punishment for those not convicted of a crime under a fair and impartial process.
Returning to these principles would not require police to change any of their current practices. Police officers would still be able to take property they believed to be connected to crime. The only difference would be that prosecutors would actually need to charge and convict the property owner before the state could keep the property. If anything, requiring criminal convictions for forfeiture cases would likely increase the number of criminals who were charged, convicted, and taken off the streets.
Even if our elected officials are not willing to require a conviction before property is forfeited, they should at least ensure that the current civil forfeiture process has as many safeguards as possible. But this is anything but the case.
By far, the most problematic aspect of civil forfeiture is the seizure of low value property, because it usually does not make economic sense for the property owner to contest. If the state took a $4,000 car from you, and it would cost you $10,000 to hire an attorney to fight to get your car back, would you pursue it? If you won, you’d lose.
Yet rather than offering additional protections for innocent owners who have low value property seized, until recently state law created even more risk for low value property to be unfairly confiscated. Under a practice known as “administrative forfeiture,” the government was allowed to take and keep property valued at under $20,000 without even having the forfeiture approved by a civil court. The burden was on the owner to sue if he or she wanted to contest the forfeiture.
Fortunately, last year, the legislature allowed the law that authorized administrative forfeitures to expire. However, lawmakers are already promising to bring the law back this year. The data shows that they shouldn’t.
The legislature recently required a publicly accessible database to be created, providing some basic information about every seizure that occurs. This law has now been in effect for 18 months, and the initial data confirms that administrative forfeiture is a bad idea.
According to an analysis by the Mississippi Center for Public Policy, the database includes forty-seven seizures in which the state pursued administrative forfeiture. The average value of this seized property was only $2,988. Forty-seven percent of the seizures were valued at less than $1,000. Eight seizures involved property worth $250 or less.
Moreover, the data indicates that, far from being used exclusively to take large quantities of drugs and cash from drug mules and cartel affiliates, trivial personal valuables are often taken under administrative forfeiture. The database includes items like an Apple Watch, multiple seizures of individual iPhones, and a Makita power drill. In two instances, agencies seized as little as $50 in cash. All of this gives the appearance that administrative forfeiture is sometimes used for roadside wallet and pocket emptying.
Whether guilty or innocent, it makes no sense for anyone to pursue legal action over these types of seizures, especially if the potential of criminal charges is hanging over their head. The result is a system in which the government can confiscate personal property with virtually no expectation of having to justify its actions.
Mississippians want to combat drug trafficking. But we also respect the property rights of innocent owners, and we expect our government to as well. The two are not mutually exclusive. Our lawmakers should look for ways to separate criminals from their ill-gotten gains, while ensuring adequate protections for the law abiding public.
This column appeared in the Clarion Ledger on January 24, 2019.
The Mississippi House has passed legislation that will allow cottage food operations to expand in the state.
House Bill 702 would help cottage food operators by increasing the maximum annual gross sales to $35,000 and authorize them to advertise online. Both are now headed to the Senate for committee assignment, likely the Senate Agriculture Committee.
Cottage food operators are defined by the Mississippi Department of Health as those who sell non-perishable foods made in their home kitchens such as candy, cookies, pies, cakes, dried fruit, trail mix, jams and jellies and popcorn.
Right now, cottage food operators are limited to $20,000 in gross annual sales. They were removed from state regulations by Senate Bill 2553 in 2013.
HB 702 was authored by state Rep. Casey Eure (R-Saucier) and passed 116-0, with one present vote.
According to a 2018 report by the Center for Health Law and Policy Innovation at Harvard University Law School, Mississippi ranks in the middle tier among states when it comes to cottage food sales.
Mississippi allows direct sales to consumers, but not indirect sales (to restaurants, retail and wholesale).
Twelve states allow both indirect and direct sales to consumers.
Mississippi is in the lower tier at present for annual sales limits and would move up to the next tier (annual sales of $30,001 to $50,000) if Gov. Phil Bryant signs HB 702 into law.
Arizona, Arkansas, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Massachusetts, Montana, Nebraska, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Virginia, West Virginia and Wyoming don’t have any annual restrictions on cottage food sales.
The bill would also remove the prohibition on advertising their products online, allowing operators to run a website or post pictures on social media.
The other food-related bill of the day, HB 793, would prohibit producers from labelling any food produced or cultured from animal tissue and plant- or insect-based food products as meat.
State Rep. Bill Pigott (R-Tylertown) wrote HB 793 and it also passed 116-0.
Meat grown in a laboratory, according to a July report by the Associated Press, could be on the market by 2021. A Dutch company, Mosa Meat, said it had the funds to get the product — which is made from a small sample of cells taken from a live animal and fed nutrients so they grow into strands of muscle tissue — into stores.
According to the story, the company claims it could make up to 80,000 quarter pounders from a single sample.
In a little more than a week, the legislature approved a bill that supporters hope will bring broadband internet to every corner of the state.
It was a pace usually reserved for resolutions honoring high schools for winning the state championship. Or for the contributions an individual made to society.
The difference is there are high expectations for the Mississippi Broadband Enabling Act. Between most of the reporting and comments from the public, broadband will be available tomorrow or by next week at worse.
That’s a slight exaggeration, though not much of one, but the bill essentially has one key feature. And it’s a good one. The state will no longer prevent electric cooperatives from providing broadband. Removing a government regulation on any entity is always a good thing.
After that, numerous questions remain.
The first is, who will actually be served? Again, the common belief is that everyone will soon have broadband speeds at home. But we don’t know if every EPA will want to be involved in the broadband game. And if they do, we don’t know if they will serve every member in their co-op. There’s quite a difference, and cost, between bringing broadband to a suburban subdivision, that likely already has broadband from an investor-owned utility, and to the person that lives a couple miles from their nearest neighbor.
The reason AT&T, Xfinity, and C Spire have yet to enter these markets is because the business model does not work. The market does not lie.
EPAs can’t simply flip a switch and make broadband appear. Where will the money come from? While there is nothing in the bill this year, taxpayers will likely bear the burden in the future.
Most of the talk has centered about federal subsidies, which are still tax dollars even though we have this disconnect on where money in Washington comes from. And beyond that, there is the strong probability that the state will also need to be involved financially. And potentially ratepayers.
There are many bills the legislature could rush through at a similar pace. They could eliminate red tape for businesses caused by numerous government regulations, make it easier for entrepreneurs to earn a living with fewer burdensome licenses, allow parents more options in the education of their children, and lead Mississippi on the path to prosperity most states in the South have experienced.
Fortunately, they still have plenty of time.