This column appeared in The Daily Signal on August 31, 2018.
Tiger Woods is taking heat from the media for just wanting to play golf and not taking their bait.
USA Today columnist Christine Brennan was highly critical of Tiger Woods earlier this week for his refusal to weigh in on the politics of the day.
Brennan, along with several reporters at Tiger’s press conference following a recent tournament, seemed upset because he would not opine on the subject of Donald Trump and race relations, particularly “as a man of color.”
It’s as if every athlete now has an obligation to share personal views on every subject.
The constitutional right to free speech gives Tiger the right to say nothing at all. Perhaps he has a different view or a less popular one. Perhaps he voted for Trump. Maybe he didn’t vote at all. Regardless, he is not required to provide his views on politics or society.
Woods has said that to expect him to have a say on everything having to do with blackness in America because his father was black is disrespectful to his Asian mother. Because his mother is Asian, is Tiger compelled to weigh in on trade relations and Harvard’s admission policies?
Maybe Tiger just wants to talk about golf. Maybe golf fans just want hear him discuss golf. Rather than criticize Tiger for refusing to weigh in on political matters, he should be thanked for having the discipline and the good sense to let everyone enjoy the sports they like.
The USGA, PGA, LPGA, and their fans appear to understand golf is a sport, not a political weapon. Why doesn’t the rest of the sports world?If we are in the mood for political commentary, we can switch the channel to any number of networks that dedicate 24 hours every day to the subject.
It seems the governing bodies of golf understand something fundamental: The sports industry relies on fans, spectators, viewers, and players. Without attendees and viewers, the business models fall apart. Like any healthy business, the customer is at the center.
The NBA and NCAA’s boycott of North Carolina over the transgender bathroom bill and the NFL’s handling of the national anthem issue are recent examples of leagues alienating fans by involving themselves in politics.
With this is mind, why would a sports league attempt to use its sport as a weapon for politics? Sports fans come from all political persuasions. Why jeopardize your relationship with the customer over political issues?
We’ve been asking that question of ESPN, NBA, NFL, NCAA, and other sports organizations of late. Using the resources of a sports organization or the resources of a media company to advance an agenda seems a flawed strategy, and there is data emerging to support this.
In nearly every measured television market, center right-viewers are leaving ESPN. Deep Root, a TV data service, analyzed 43 markets across the US and compared 2015 audiences with 2016 audiences. In 36 of the 43 markets, ESPN viewership had become more liberal—between 5 percent and 27 percent more liberalin 2016 than in 2015.
In other words, center-right viewers left the network.
Those of us who want our sports delivered free of political commentary salute Tiger Woods and the sport of golf. Now please have a talk with your organizational cohorts at the NFL, NBA, and NCAA. We sports consumers/fans would like to have our sports back.
Sports have always been a common denominator in our culture. Regardless of race, age, sex, education, or political affiliation, sport is a unifier. That needs to be respected.
With all of the balkanization that exists in the other parts of our lives, let’s leave sports alone. We’ve already surrendered higher education, arts, music, media, and filmmaking to progressives. They can’t have sports, too.
New York Gov. Andrew Cuomo is in hot water after saying that America “was never that great.” Cuomo is furiously trying to walk back this remark because all reasonable Americans understand that our country, while still struggling to live up to its ideals, has always been the greatest country known to the world. Politicians who do not understand this basic truth should plan to keep their day jobs.
But what made America so great?
When the Declaration of Independence was adopted on July 4, 1776, America was a fledgling experiment in self-government, which the rest of the world expected to fail miserably. All of the wealth and power was in the Old World, with its palaces, empires and powdered wig-wearing aristocrats. America was considered the boondocks, full of log cabins and fur cap-wearing farmers, trappers and frontiersmen.
A few years later, America had fielded a Continental Army that defeated the largest military power in world history and had become the freest and most prosperous country in the world.
A limited government and an empowered citizenry
America became great because the Constitution limited the power of government and empowered individuals to lead their lives as they saw fit. The framers of the Constitution did not know what America would look like 230 years in the future, but they knew they were tired of being subject to the whims of a king. They carefully constructed a government that had just enough power to impose civil order, protect citizens from foreign invaders and secure individual rights to life, liberty and the pursuit of happiness, but not enough power to violate those rights itself. To achieve this, the framers confined the powers of the federal government to those specifically listed in the Constitution and divided that power among three branches of government.
The framers also took a belt-and-suspenders approach to protecting the rights of the people. They added a Bill of Rights to the Constitution to ensure that certain important rights were never violated, even though the framers themselves said that the Constitution had not granted the federal government the power to violate those rights to begin with. Additional amendments were later added to the Constitution to extend its protection of rights to all people, regardless of race or gender, and to keep state and local governments from violating the people’s rights.
If you don’t recognize this strictly limited government, you would be forgiven. Today, politicians say they can do just about anything they want, except what is explicitly forbidden by the Bill of Rights, and even that is up for debate. When asked where the Constitution authorized a proposed law, one congressman admitted, “I don’t worry about the Constitution on this, to be honest.”
Every detail of our lives is subjected to government rules
The rest of Congress appears to feel the same way. The Federal Register, which contains all proposed and final regulations issued by federal agencies, has published over 3.2 million pages. If it were printed and stacked, it would be taller than the Washington Monument. This does not take into account all the laws passed by Congress or by state and local governments.
Because of all these rules, the cost of doing business in America is staggering, and startups and small businesses are at a competitive disadvantage to big businesses that can easily afford it. Those large companies can also afford to pay lobbyists to convince lawmakers to pass even more laws that keep new competitors at bay. All the while, countless Americans are prevented from pursuing their version of the American dream.
Where did we go wrong?
The framers envisioned the judiciary as the guardians of individual rights. But over time, the courts have become more interested in picking and choosing which rights to protect or neglect. In the process, they have invented government powers that do not exist. The result is that our government is far more powerful than the founders ever intended.
You may have heard the term “activist judges.” We certainly don’t need those, but we do need an engaged judiciary that takes seriously its role in the system of checks and balances so carefully designed by the framers.
The good news is that we can all play a part in restoring the American vision. Courts will only take our constitutional rights seriously if we do. We need citizens who are willing to stand up for their rights and attorneys who are willing to advocate for those people, simply because it is the right thing to do. At the Mississippi Justice Institute, we have made that our mission.
This column appeared in the Clarion Ledger on September 2, 2018.
The first – and hopefully last – special session of 2018 is now over.
The Legislature passed three bills: a $200 million infrastructure bill; a lottery bill; and a bill to distribute BP settlement money throughout the state. We reviewed the infrastructure bill earlier in the week, and it has been signed into law by the governor.
The lottery bill did not pass without drama. In fact, the most interesting part of session was that it almost did not pass at all. On Monday night, the House stunned many observers by rejecting the lottery conference report. After “sleeping on it,” several members changed their vote the next morning. The initial vote on the conference report was 53 for and 61 against. The do-over vote was 58 for and 54 against. Up until the end of the special session members who had voted “No” during the do-over were switching their vote to “Yes.”
Mississippi's path to a lottery
Once Gov. Phil Bryant came out in favor of the lottery, lawmakers began to feel it was inevitable. Long gone are the days when Gov. Ray Mabus (D) lost his re-election bid partly because of his support for the lottery. As Jake McGraw over at Rethink Mississippi details, the lottery was unconstitutional in Mississippi between 1868 and 1992. (Public opinion about lotteries seems to ebb and flow as ebbs and flows the controversy and corruption lotteries tend to facilitate.)
In 1992, voters cleared the way by amending the state constitution to allow for a lottery, but it took another 26 years before the lottery actually became law in Mississippi. One might wonder at this delay, but there is something to be said – said by James Madison, in fact – that public opinion often benefits from guidance, refinement – and delay. This refinement – owing to the divided form of government we all enjoy – is what distinguishes representative democracy from the tumult of purely majoritarian rule.
Mississippi becomes the 45th state to legalize the lottery, and our citizens will presumably no longer be crossing the state line to buy tickets in Louisiana, Arkansas and Tennessee. This phenomenon – that people are buying lottery tickets in other states – was one of the primary motivations to pass a lottery here. It is interesting, however, that the two states immune to this argument – Alaska and Hawaii – do not have lotteries. Just maybe these folks believe it’s bad policy.
BP money
Before going home on Wednesday, lawmakers were also forced to decide how to distribute $750 million in BP settlement funds – gotten from the 2010 Deepwater Horizon oil spill. Bickering over how to divvy up the windfall has preoccupied the Legislature for at least the past two sessions. The Senate bill proposed sending 75 percent of the money to the coast and 25 percent to the rest of the state. The House agreed, fending off several amendments and letting everyone go home Wednesday afternoon. Legislative leadership clearly wanted to avoid sending the bill to conference, where it would have become even more of a “Christmas tree.”
It has been reported that the 75 percent in settlement money will go to six counties: Hancock, Harrison, Jackson, Pearl River, Stone and George. The bill does not exactly say this. Rather, it stipulates the money will be used for programs and projects in the Gulf Coast region “as defined in the federal RESTORE Act, or twenty-five miles from the northern boundaries of the three coastal counties.” ... So which is it? The RESTORE Act’s definition of the “Gulf Coast region” goes well beyond six counties. Which definition governs how the money is to be used? The language is a bit confusing (but I ain’t a lawyer, only a Ph.D.). This confusion could spawn more squabbling – if not a lawsuit or two.
Several states have unfunded liabilities that can only be fixed with major reforms. Unfortunately, politicians find it easier to ignore the problem.
Unfunded public-pension liabilities are not a fun subject, and most politicians do all they can to avoid it. Nobody wants to be the sober one in a room full of drunks — but the party can’t go on forever, and eventually someone will have to clean up the mess.
According to a comprehensive survey by the American Legislative Exchange Council (ALEC) of 280 state-administered public-pension plans, the unfunded liabilities of state-administered pensions now exceed $6 trillion. The number increased by $433 billion in the last twelve months. An April report from Pew Charitable Trusts shows that state-pension debt has increased for 15 consecutive years. While this growing gap is a major concern for current public-sector employees and retirees, it should also worry the rest of us.
As the costs of providing current pension benefits begin to weigh on city and state budgets, other public services are getting crowded out. This is putting pressure on many pension-plan managers to seek greater returns by buying riskier assets. Decades of underfunding adds to the pressure, as governments scramble to meet unrealistic return targets and pay out promised benefits at a level the private sector moved away from decades ago. This all points to the growing possibility that many states will need to raise taxes to keep the party going. But without major pension reform, we may soon see the day when taxpayers in fiscally responsible states are asked to bail out those states that just couldn’t, or wouldn’t, stop partying.
A few examples of what some of the party favors look like will help explain why the clean-up phase will be so infuriating. The retired head of the Oregon Health & Science University takes home a pension of $76,111 — each month! Fifty-eight percent of police and firefighters in Scranton, Pa., are on disability pensions; the average retirement age of a Scranton police officer is just under 45 years old. In Nevada, the average full-career state worker will receive more than $1.3 million in lifetime pension benefits. In five states (California, West Virginia, Oregon, Texas, and New Mexico), a retiree can receive an annual pension income that exceeds his last yearly salary.
In Mississippi, the unfunded pension picture is not a pretty one. We have total unfunded liabilities of over $80 billion. On a per capita basis, that means each Mississippian is responsible for roughly $27,000 of the debt. We only have 24 percent of these promises currently funded. But this issue affects states of all sizes and politics, and from all regions.
The states with the largest per capita debt are somewhat surprising: Alaska, Connecticut, Ohio, Illinois, and New Mexico. So are the states with the smallest per capita share of debt: Tennessee, Indiana, Nebraska, Wisconsin, and North Carolina.
However, perhaps the most important measure for a state’s pension health is its funding ratio. This is the percentage of the total pension obligations that is currently funded. The states that are the least funded to meet obligations include Connecticut (20 percent), Kentucky (21 percent), Illinois (23 percent), Mississippi (24 percent), and New Jersey (26 percent). In other words, Connecticut has saved $1 for every $5 of known debt obligation it has for current and future state system retirees. The states in the best shape: Wisconsin (62 percent funded), South Dakota (48 percent), New York (46 percent), Tennessee (46 percent), and North Carolina (45 percent).
What do the data tell us? For starters, note the strong correlation between states that have managed their pension programs responsibly and states with pro-growth economic policies that favor free-market solutions over government ones. Note that each of the five states with the highest funding levels are also states that rely less on the government to sustain their economies. In none of these states does government control more than 45 percent of the economy, which puts these states in the top half of that measure.
On the other end of the spectrum, 57 percent of Kentucky’s economy is controlled by government, while the public sector controls 55 percent of Mississippi’s economy. Obviously, states such as New Jersey and Illinois suffer from powerful public-employee unions that resist any attempts to adjust spending, renegotiate bad contracts, or move new employees to 401(k)-type retirement accounts that require self-financing of retirement programs (as with the tens of millions of workers in the private sector). But even in states without public-sector unions, such as Mississippi, lawmakers have been hesitant to make necessary changes.
The party is over. This is an easy math problem that, unlike the financial crisis from ten years ago, everyone can see coming. Let’s turn the lights on in state capitols and city halls everywhere and get the cleanup started.
This column appeared in National Review on August 29, 2018.
Several years ago, former New York City Mayor Michael Bloomberg made headlines when he attempted to ban soft drinks over 16 ounces. After several years of legal challenges, New York City exhausted their appeals and people in the city were free to drink from a 17 ounce cup.
Despite that setback, the nanny state is alive and well, particularly in large metropolitan cities and coastal states. But take heart, these rules and regulations are for your own good. At least that is what we often hear.
Lawmakers are particularly concerned that you don’t know how to parent, especially when it comes to educating your child. While many states, Mississippi included, have parent-friendly homeschool laws, others make it a little more difficult to educate your own child in your own house.
In Pennsylvania, you must meet educational qualifications to homeschool, file a notarized affidavit, which includes evidence of immunization and an outline of proposed objectives by subject area, meet the required number of days or hours of instruction, including the required subjects, maintain a portfolio, which includes work samples and standardized testing, and then have your child evaluated each year with a certification that must be submitted to the local school superintendent.
Before children reach school age, we have seen parents seek out new options for preschool, including cooperatives. Here, parents volunteer in the classroom and help run the school, helping to lower the costs of a traditional preschool. Now that this is working well for families, Virginia is looking to require 30 hours of training for parents before they help with activities such as sweeping the floors and passing out snacks.
After all, are those snacks healthy?
The government is here to help you decide
The city of Baltimore recently banned restaurants from including soft drinks or other sugary drinks on kids’ menus. Now, milk, 100 percent fruit juices, water, and flavored or sparkling water without added sweeteners are what the city of Baltimore will allow you to purchase. Not to be outdone, California is now interested in protecting your children from your bad parenting. A proposed law will require restaurants to serve only water or flavored milk to children, sorry fruit juices.
But don’t ask for a straw with your milk or water when you are in California. Numerous municipalities have enacted bans, but Santa Barbara is taking the war on straws to the next level. In the coastal city, outlaws who use straws can be fined up to $1,000 and sent to prison for six months. To be fair, cutting down on waste in a good thing. But let’s not pat ourselves on the back for making up some statistics you received from a nine-year old and then passing laws that will do absolutely nothing for the environment.
Just make sure that milk isn’t raw. Nineteen states, including Mississippi, ban the sale of raw milk, though Mississippi does allow the sale of raw goat milk. But California takes it a step further. They actually deploy “food confiscation teams” to raid the homes of people who purchased bootleg milk. And don’t think about calling nondairy milk, milk.
Regulating competition in the name of consumer protection
The Food and Drug Administration is considering regulatory action that will prohibit almond milk and soy milk from calling their products milk. All because you and I are unaware that Almond milk does not come from a cow. This move is being cheered by the dairy industry, which is looking to use political favor to stifle competition. Sound familiar?
This is what we have seen from the taxi industry in response to Uber and Lyft or the hotel industry in response to Airbnb. Incumbents seek protection from government when a disruptor enters their industry, rather than making changes in products or services in the free-market. They do this because the allocation of resources towards government has worked in far too many places – thus encouraging unnecessary and often silly rules and regulations.
What is next?
And while we can’t have straws or sugary drinks, at least we still have balloons. For now. The anti-balloon movement appears ready to build on the anti-straw movement and do away with the common practice of releasing balloons. Even though, as the AP admitted, balloons are a “very small part of environmental pollution.”
Thirty-two years ago President Ronald Reagan said, “The nine most terrifying words in the English language are: I'm from the Government, and I'm here to help.” Over the years and decades, we have seen our government continue to grow, giving government regulators more power every day. And as we do that, we continue to lose just a little bit more of our freedoms and liberties.
Be very cautious next time you hear a politician sell you on a promise that what he or she is doing is for your own good.
This column appeared in the Clinton Courier on August 29, 2018.
The House of Representatives changed course on Tuesday, voting in favor of a state lottery. They did this less than 24 hours after rejecting the lottery conference report. Five Republicans and three Democrats switched from a "No" vote to a "Yes" vote. Two Democrats and one Republicans switched from a "Yes" vote to a "No" vote.
With approval from the House, the lottery is on its way to Gov. Phil Bryant for his signature.
This is a historic day in Mississippi. Lawmakers rose to the occasion and passed the last part of a sustainable infrastructure funding mechanism that will also provide additional money for public education.
— Phil Bryant (@PhilBryantMS) August 28, 2018
The Mississippi Infrastructure Modernization Act
In addition to creating a state lottery, lawmakers also created the Mississippi Infrastructure Modernization Act.
This new law provides more than $1 billion in infrastructure funding over the next five years. The legislation is the result of two years of negotiation and compromise between the House and Senate, seeking to find a fiscally responsible way to provide sustainable and reliable roads funding.
Here are the details on the Mississippi Infrastructure Modernization Act:
- Provides $200 million annually for roads and bridges. Funding will reach $1.1 billion over five years. This money will come from $300 million in new bonds/debt, internet sales tax revenue from the 7 percent online sales tax, a new annual tax ($75 to $150 annually) on hybrid and electric vehicles, and sports betting revenue.
- Of note, raising the gas tax was never part of this package.
Problems with initial bill
The initial lottery bill also left much to be desired, exempting the new lottery board from state public records and open meetings laws. The House addressed this problem by adding transparency language. A House amendment to leave the door open to video gaming also slowed the bill down. This change was opposed by casino operators as well as the faith community, which had thus far voiced muted opposition to the lottery.
A decades-old debate, Mississippi will become the 45th state to enact a lottery. A lottery board, appointed by the governor, will also serve as the board of the Mississippi Lottery Corporation. It would act as a private corporation domiciled in Mississippi. The lottery is expected to generate about $80 million in annual revenue, with 35 percent of total proceeds going to the state. The remaining 65 percent will go toward administrative costs/paying vendors and prize payouts.
A new report from a libertarian think tank shows personal and economic freedom is growing in Mississippi though we are still in the bottom 20 percent.
Cato Institute’s Freedom in the Fifty States tracks freedom based on fiscal policy, regulatory policy, and personal freedom. Mississippi came in at 40th overall, a five spot jump from 2014, though still lower than our peak of 32 in the early-2000s.
So what are we doing well?
Our regulatory policy is in the top 10, and is moving in the right direction. Two years ago, lawmakers adopted a new law that will require all new licensing regulations to be approved before they take effect, ensuring new attempts to stifle competition will be reviewed before they are finalized.

On land use freedom, health insurance freedom, labor market freedom, lawsuit freedom, and occupational freedom, which all encompass our regulatory policy, Mississippi is in the top half of all states in each category.
Where can we improve?
That was the good. But when it comes to fiscal policy, we have much room for growth. And it appears we are only moving backwards.

Fiscal policy includes state and local taxation, government consumption, investment, employment, and debt. Essentially, how much are you being taxed and how much of our economic activity is controlled by government?
“Mississippians’ overall tax burden is a bit above average nationally at 9.9 percent, but local taxes are quite low. This fiscal centralization goes along with a lack of choice among local government (less than 0.4 per 100 square miles). Debt is much lower than average, but government employment and consumption are far higher than average. State and local employment is 17.7 percent of private sector employment,” the report notes.
Policy recommendations? Reduce spending on health and hospitals, where we are the third most liberal spending state, and on education and public welfare, where we spend well more than the national average as a share of the economy. Make government smaller, and reduce state taxes.
Two years ago the legislature eliminated the 3 percent income tax bracket, permitted self-employed individuals to deduct half of their federal self-employment taxes, and removed the franchise tax on property and capital when fully implemented. That will help our future rankings.
And while fiscal freedom has been going in the wrong direction, we are on the right course in personal freedom, largely due to the criminal justice reforms lawmakers have begun to make. We currently came in 34th. To move in to the top half, we need to continue on the right path with those reforms.
How are our neighbors doing?
Among our four border states, we were the only state below 31st overall. Alabama, Louisiana, and Arkansas were rated 28th, 30th, and 31st respectively. The outlier- in a good way- was Tennessee at 7th.
| State | Overall | Fiscal | Regulatory | Personal |
| Mississippi | 40 | 46 | 7 | 34 |
| Alabama | 28 | 19 | 23 | 49 |
| Arkansas | 31 | 33 | 14 | 47 |
| Louisiana | 30 | 22 | 32 | 30 |
| Tennessee | 7 | 3 | 10 | 45 |
As we mentioned, regulatory policy is our strength and Mississippi’s 7th place ranking topped all neighboring states, including Tennessee. Personal freedom was a wash, only Louisiana enjoyed a rating higher than our 34th.
It comes back to fiscal policy. Arkansas is ranked 33rd, Louisiana is 22nd, Alabama is 19th. Tennessee? 3rd. So what are they doing? “The Volunteer State lacks an income tax, and both state and local tax collections fall below the national average. We show state-level taxes falling from 5.1 percent of adjusted personal income in FY 2007 to 4.3 percent in FY 2014 and then back up to 4.5 percent in FY 2017. Local taxes have also fallen a bit since 2006, from about 3.7 to 3.3 percent of income. State and local debt is low, at 17.2 percent of income, and so is government consumption and investment, at 9.7 percent of income. Government employment is only 10.7 percent of private employment, a big drop since 2010 as the job market has recovered,” the report mentions.
Over the past several years, Mississippi has made improvements in several areas. Only five states made greater gains over the past four years. Still, 40th isn’t where we want to hang our hat. By moving our fiscal policies closer to our neighbors, we will begin to enjoy a freer, and more prosperous, state.
“No one is leaving this special session without getting something.” … Mississippi Legislator
Update: The House has changed course and voted in favor of a lottery Tuesday afternoon, sending the conference report creating a state lottery to the governor.
The 2018 special session took a surprising turn on Monday as the House voted down the state lottery conference report (SB 2001) by a bipartisan vote of 54 to 60. Moments later, the same lottery bill passed the Senate 31 to 17. The conference report was necessary because the Senate declined to agree to a House amendment that left the door open to video gambling. Democrats, led by House Minority Whip David Baria, were also disappointed that the bill does not directly allocate money for K-12 education.
The lottery bill has been held on what is called a motion to reconsider. This means that when the House reconvenes at 12:30, lottery supporters will have another chance to get a majority vote. If the motion is tabled (i.e., defeated), the lottery is likely dead for this special session.
Status of BP money
With the defeat of the lottery bill in the House, it has become clear why the special session call has not yet been expanded to include the so-called BP money. At issue is approximately $700 million in BP settlement funds. Options for the money include allocating a majority of the funds to either 3 (or 6) coastal counties. Or at least some of the money could be sent to all 82 Mississippi counties. Many observers predict a 70%/30% split between the two blocks.
The promise of getting more BP money or the threat of getting no BP money will be used by lottery supporters eager to flip the House vote. Whether this threat has any merit remains to be seen. But it would seem that Democrats have more to gain from delaying the lottery because they can use the issue next year to both advocate for more K-12 funding. They can also fault Republicans for cutting taxes and not spending more on infrastructure. Moreover, while the lottery remains popular statewide, pockets of resistance in conservative areas are fierce. It may even be enough to get some members “primaried.”
Problems with initial bill
The initial lottery bill also left much to be desired, exempting the new lottery board from state public records and open meetings laws. The House addressed this problem by adding transparency language. A House amendment to leave the door open to video gaming also slowed the bill down. This change was opposed by casino operators as well as the faith community, which has thus far voiced muted opposition to the lottery – and this morning may be wondering if they should have done more to oppose the bill.
A decades-old debate, Mississippi would become the 45th state to enact a lottery if the House approves. A lottery board, appointed by the governor, would also serve as the board of the Mississippi Lottery Corporation. It would act as a private corporation domiciled in Mississippi. The lottery is expected to generate about $80 million in annual revenue, with 35 percent of total proceeds going to the state. The remaining 65 percent will go toward administrative costs/paying vendors and prize payouts. It is MCPP’s contention that this 35 percent of revenue is essentially a tax and that the lottery bill is primarily a revenue bill.
The Mississippi Infrastructure Modernization Act
Also on Monday, the House sent HB 1 on to the governor.
HB 1 provides more than $1 billion in infrastructure funding over the next five years. The legislation is the result of two years of negotiation and compromise between the House and Senate, seeking to find a fiscally responsible way to provide sustainable and reliable roads funding. The Mississippi Infrastructure Modernization Act:
- Provides $200 million annually for roads and bridges. Funding will reach $1.1 billion over five years. This money will come from $300 million in new bonds/debt, internet sales tax revenue from the 7 percent online sales tax, a new annual tax ($75 to $150 annually) on hybrid and electric vehicles, and sports betting revenue.
- Of note, raising the gas tax was never part of this package.
There is a common assumption that we often hear about Mississippi government. It is that the government is too small and we have reduced taxes too much. Therefore, revenues are down, and we have less money to spend on key government responsibilities, and that is the reason we trail much of the country in various rankings.
This makes for an easy soundbite, and at first glance it might appear to make sense. But of Mississippi’s many problems, the size of government is not one of them. Indeed, we have relied too much on government to grow the economy rather than enact market based policies that have allowed other states to prosper.
As Mississippi was experiencing minimal growth for more than two decades, other states in the middle of the country were prospering. They grew because of policies that emphasized economic freedom and limited government.
Mississippi has the fifth largest government share of state economic activity, and that is due to state and local spending, not federal funds. While there is a large contingent who would want to see the government spend more, it would actually be pretty difficult.
When the government grows, the state has increased ownership and the private sector shrinks. And economic freedom, which is based on free markets and voluntary exchange, individual liberty, and personal responsibility, wanes.
According to the most recent Fraser Institute Economic Freedom of North America report, which measures government spending, taxes, and labor market freedom, Mississippi was ranked 45th among the 50 states. Similarly, Cato Institute’s Freedom in the Fifty States, which measures economic and personal freedom, placed Mississippi 40th in their most recent rankings.
What is the correlation between economic freedom and prosperity? The freer states are more prosperous, have higher per capita incomes, more entrepreneurial activity, and lower poverty rates. We have the model. We need to just look at what similar states have done for economic growth. And it is important to know the difference between the reality of economic growth and the practice of economic development; those can be very different things.
Government incentives, often in the name of economic development and being ‘business-friendly,’ attempt to lure businesses to the state through financial benefits, such as site preparation, infrastructure, job training, or special tax breaks. The only reason these incentives are necessary is because of higher taxes or policies that burden businesses. Instead of special incentives for a few, Mississippi should work to provide a favorable climate for every business. And let the market decide where a business locates or expands. An economic development officer can sell low taxes and low regulatory burdens to a company looking for a great location like Mississippi. What’s more, the data shows us that such policies allow existing businesses already in our state to expand and grow from a small employer to a large employer without getting any incentives from the taxpayers. That’s economic growth.
Being business friendly isn’t based on who can seek the most favors, it is based on how free your state is.
To their credit, state leaders have attempted to improve the economic climate of Mississippi, most notably through tax and regulatory reform. In 2017, the legislature adopted a new law that will require all new licensing regulations to be approved before they take effect, ensuring new attempts to stifle competition will be reviewed before they are finalized.
And the Taxpayer Pay Raise Act in 2016 will eliminate the 3 percent income tax bracket, allow self-employed individuals to deduct half of their federal self-employment taxes, and remove the franchise tax on property and capital when fully implemented. Even though Mississippi’s overall tax burden is still above the national average, this will move Mississippi closer to a flatter income tax and make our business climate more competitive.
These reforms weren’t easy, but showed forward thinking to align us closer with neighboring states. Making the case for spending more money on your favorite government program is not what is needed to prosper. We need to think much bigger than that. If we want to do better than the bottom ten in categories like per capita income, it starts with doing better in categories like business friendliness, regulatory practices, and tax rates.
This column appeared in the Commercial Dispatch on August 25, 2018.
