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U.S. Fifth Circuit Court of Appeals Reinstates Freedom of Conscience Law, HB 1523
Today, a three-judge panel of the Fifth Circuit Court of Appeals reinstated the “Protecting Freedom of Conscience from Government Discrimination Act,” more commonly known as HB 1523.
Passed by the Mississippi legislature in 2016, HB 1523 is intended to limit government action against people who believe marriage is a sacred relationship between a man and a woman. It provides protection for photographers, florists, and other wedding vendors who believe a wedding is a religious ceremony and that they shouldn’t be forced to participate in a ceremony that violates their deeply-help religious beliefs.
Today’s ruling did not address the merits of the law, including the question of its constitutionality. The ruling was limited to the question of whether the plaintiffs were qualified (known as “having standing”) to challenge the law in court. The Court said the plaintiffs did not have standing, because the law never went into effect and had caused them no injury except that they were offended by it. “Injury in fact,” not merely being offended by a law, is a prerequisite to having standing in federal court.
The court called the basis of the legal challenge “quite radical” because it would abandon long-held rules for standing which “are essential to preserving the separation of powers and limited judicial role mandated by the Constitution.” The Court also observed, “HB 1523 does nothing to compel the behavior of these plaintiffs; it only restricts the actions of state government officials.”
After HB 1523 was signed into law by Governor Bryant in April of 2016, it was ruled unconstitutional by U.S. District Judge Carlton Reeves on June 30, just minutes before it was to take effect. Attorney General Jim Hood refused to appeal that ruling, so Governor Bryant engaged pro bono counsel to represent him in appealing the decision.
Maine Governor Paul LePage and eight Republican attorneys general filed an amicus brief in support of the law. As they point out, “The law addresses marriage and does not even mention sexual orientation… HB 1523’s plain purpose is to protect individual rights to free expression and the free exercise of religion in our pluralistic society - a laudable goal that governments in this Nation have pursued since the Founding.”
2017 Legislative Recap
Highlights from the Mississippi Legislature's Regular Session
MCPP's top priority for 2017 was a major welfare-to-work bill, which was signed into law (see HB 1090, the first item below). We also worked on bills to reduce the regulatory burden on entrepreneurs, a major one which passed and others which made surprising progress in their first year to be considered. In addition we continued our efforts to revise the graduation test in U.S. History to include the nation’s founding.
As always, we assisted lawmakers on numerous bills by analyzing them based on the principles in our Governing by Principle booklet. We also suggested amendments to bills that could be improved and, in one of our more important roles, encouraged the killing of bills that were inconsistent with those principles.
Below is a summary of most of the significant bills and issues addressed (or not) during the 2017 Regular Session, which began on January 3 and ended on March 29, four days before the anticipated SINE DIE of April 2. Several important bills, such as those regarding school funding and road construction, did not pass and will likely come up again in 2018. A special session has been called for June 5, 2017.
NOTE:
MCPP did not take positions or otherwise work on all these bills. This is a list of the most significant legislation considered by the 2017 legislature, or bills which we thought you would be interested in.
| Bill Trivia |
| Bills Introduced: 2,854 (1,786 House, 1,068 Senate) |
| Signed by Governor: 308 (incl. 100 agency appropriations bills) |
| Became Law without Gov.’s Signature: 6 |
| Vetoed: 4 |
| Partially (Line-Item) Vetoed: 3 |
| * 11% of introduced bills made it through the whole process and became law. That drops to less than 8% if agency appropriations bills (which are required annually) are not included. |
| * 78% of bills that were introduced died without being considered at all. |
| * 44% of House-passed bills died in the Senate; 30% of Senate-passed bills died in the House. |
Significant Legislation Passed
and Signed into Law:
Welfare-to-Work Reforms (HB 1090): Otherwise known as the HOPE Act, HB 1090 will save an estimated $40 million per year for Mississippi taxpayers alone, and four times that much for federal taxpayers, once it is fully implemented over the next two years. It is designed to remove dead people and non-Mississippians from our welfare rolls and to restore the Clinton-era work requirements that have been waived by previous administrations. It also ends our being the only state in the country in which Medicaid and other welfare agencies don't share eligibility information on applicants. According to an independent review of the law, HB 1090 moves "Mississippi to the forefront of states in overall benefits integrity and the move from reliance on benefit programs to employment." MCPP-supported policy.
Regulation
Occupational Licensure Reform (HB 1425): This law is among the first in the nation to respond to a recent U.S. Supreme Court anti-trust ruling. It requires the state to use the least restrictive method of regulating certain professions so that the public
is protected, but competition is not stifled. The regulatory options that may be taken are listed from least to most restrictive, ranging from "market competition" (no license needed) to licensure, with several steps in between. A commission, made up of the governor, attorney general, and secretary of state, will review regulations to ensure
compliance with the law. MCPP-supported policy.
Acupuncture Licensing (SB 2214): This law incrementally lifts current restrictions on acupuncturists that require practice under a supervising physician.
Elimination of Inactive Boards (SB 2572 and HB 1330): These two laws eliminate nearly 20 inactive boards and commissions.
Deregulation for small breweries (HB 1322): This law allows small "craft breweries" to sell a limited amount of light wine or beer products for consumption on or off property. It also increases the amount of beer that a brewpub (a restaurant or bar that produces its own beer) may produce and allows sales for off-premises consumption.
Law Enforcement
Asset Forfeiture Transparency (HB 812): In 2016, MCPP supported efforts to increase transparency regarding how state and local law enforcement agencies seize assets from citizens. Instead, the legislature elected to create a task force to study the issue. (MJI's Mike Hurst served on that task force.) This year, HB 812 implemented their recommendations. It requires law enforcement agencies to give back property they seize unless they obtain a warrant for seizure within 72 hours. It also requires details and documentation regarding forfeited property to be reported on a state website. MCPP-supported policy.
Hate Crime Penalties/Back the Badge (SB 2469): This law provides an enhanced "hate crime" penalty for crimes that specifically target a law enforcement officer, firefighter, or emergency medical technician (EMT). These groups join the other protected classes of "race, color, religion, ethnicity, ancestry, national origin or gender." This is the first time in state law that a class has been defined by occupation, rather than biology or deeply held belief.
Limiting Sanctuary Cities/Campuses (SB 2710): This law says state and local entities may not limit cooperation with federal authorities in reporting a person's immigration status. The essence of a "sanctuary city" is the refusal, often at the city or county jail level, to detain illegal aliens due to immigration status. This law only very weakly prohibits this practice, if at all.
Death Penalty Clarification (HB 638): In the event Mississippi's current method of capital punishment, lethal injection, becomes unavailable (by court ruling or the non-availability of the necessary drugs), this law provides for the alternatives of nitrogen gas (an option in 5 other states), electrocution (8 states) or firing squad (2 states).
Prescription Drug Monitoring (HB 1032): This law requires all healthcare providers allowed to prescribe drugs to participate in the current Prescription Monitoring Program, which tracks prescriptions for controlled substances in an attempt to prevent a patient from being prescribed the same controlled substance by multiple
doctors.
Family
Abused Children, Abused Spouse, Divorce (SB 2680): SB 2680 was originally written to clarify the legal options for placing abused and neglected children with relatives rather than in the foster care system. Those provisions remained in the bill, but when the bill came out of a conference committee, a provision had been added to clarify that spousal domestic abuse is included under the "Habitual Cruel and Inhuman Treatment" ground for divorce. This occurred after other divorce bills died in the House after passing the Senate.
Campaign Finance Changes (SB 2689): This law disallows the use of campaign contributions for personal use, including conversion of campaign funds to personal use upon retirement, beginning January 1, 2018. (These uses are currently allowed.) The new law prohibits a wide array of expenditures, ranging from rent to funeral expenses to clothes to automobiles. It also requires credit card transactions of $200 or more to be reported individually. (It is common for payments to credit card companies to be reported, but not the individual transactions. Candidates are not required – and will not under the new law – be required to submit credit card statements or any other documentation of their expenditures. The Ethics Commission will now have limited jurisdiction to enforce the law.
Election Code Revisions (HB 467): This law makes several changes to the state's election code. What is more interesting, perhaps, are election-related bills that died. In particular, HB 228, which passed the House but died in the Senate, would have allowed early voting to occur 14 days prior to an election. HB 373 (online voter registration for first-time voters) and HB 1054 (to study franchisement for nonviolent offenders) also passed the House but died in the Senate.
Procurement Reform (HB 1106/ HB 1109/ SB 2354): These new laws create more transparency and accountability for purchases made by state agencies. In addition to implementing an electronic, interactive bidding option, and providing clearer definitions in the law, these bills reform the procurement process by: 1) consolidating oversight of both product and service contracts under a Public Procurement Review Board; 2) requiring contracts in excess of $75,000 to be approved by the board; and 3) providing for more transparency regarding sole-source contracts.
Healthcare & Health Insurance
UMMC Healthcare Collaboratives (HB 926): This law will enable the Univ. of Miss. Medical Center (UMMC) to enter into "cooperative arrangements" with public or private health-related organizations, including community hospitals. It exempts UMMC from certain state purchasing/procurement laws under certain conditions. Advocates of the law argue that it provides needed flexibility for UMMC to attract new doctors/researchers and that it will increase access to care. Opponents argue that it gives UMMC, as a governmental entity, the ability to enter into partnerships that will either crowd-out the private sector or result in unwise investment.
Education
Teaching Children to Write in Cursive (SB 2273): The federally driven Common Core standards do not require cursive instruction, so many states simply stopped teaching it. SB 2273 requires instruction so that students know how to write in cursive by the end of fifth grade.
School Choice Expansion for Dyslexic Students (HB 1046): Mississippi currently offers a very limited school choice scholarship for children with dyslexia. (This is separate from the Education Scholarship Accounts (ESAs) for students with special needs.)The current program, which serves 159 students in three participating schools is only available to students in 1st through 6th grade. HB 1046 expands that to 1st through 12th grade.
School Suspensions/Expulsions Review Process (HB 1413): This law clarifies due process rights for suspended or expelled students, but only for those suspended for more than 10 days (i.e., two weeks of school) or expelled for the year. It defines the standard of proof that must be used in evaluating such cases. Currently, such students have undefined appeal and due process rights, a defeat which remains for students suspended less than 10 days.
Taxes
First-Time Home Buyers Tax Break (HB 1601): This law excludes from gross income, for tax purposes, up to $2,500 per year ($5,000 for a married couple filing jointly) deposited into a first-time homebuyer savings account to be used to purchase a home in Mississippi.
Agricultural Land Tax Cut (HB 1340): Currently, agricultural land appraisal values are determined by a formula that allows for an up or down valuation of 10 percent over the previous year. This law reduces the potential variation to no more or less than 4 percent, providing for more tax predictability for land owners. The law also makes changes to the appraisal process related to ground leases connected to the state port at Gulfport.
Restaurant/Hotel/Tourism Tax Bills (SB 2941 and many others): Every year, the Mississippi legislature almost automatically extends numerous optional local taxes, primarily sales taxes on restaurants and hotels. They are often sold to the public as temporary tax increases that must be approved by local voters before going into effect. But when the legislature extends the authority to levy the tax, no local referendum is required, no matter how many times that authority is extended. The Byhalia tourism tax (SB 2941) is noteworthy because the tax, passed in 2010, expired on July 31, 2016. The town continued to collect the tax, a practice SB 2941 retroactively condones and extends to the year 2021.
Miscellaneous
Faith-Based Initiatives Council (SB 2514): The purpose of this law is to create an advisory council to the governor with the goal of empowering the faith-based and community nonprofit sectors to address systemic problems in Mississippi. The law is based on a successful Florida program in place since 2006.
Capitol Complex (HB 1226): This measure authorizes the Miss. Department of Finance and Administration (DFA) to develop and administer infrastructure improvement projects within a "Capitol Complex Improvement District" within the city of Jackson. The projects are to be funded by diverting up to 6 percent of state sales tax revenue collected in Jackson. This is in addition to the 1 percent sales tax (on top of the state 7 percent rate) that was approved in 2014 to pay for infrastructure improvements.
Bonds for "Economic Development" Projects and Programs (SB 3033): This law authorizes the state to issue bonds to borrow $20 million to assist local economic development and infrastructure projects, and $45 Million for Huntington-Ingalls Shipbuilding, if Ingalls first invests at least twice that much in the improvements to the shipyard it leases from the state.
Local Taxpayer Subsidies for Nonprofits (HB 1747, HB 761 and many others): Every year, the legislature authorizes certain cities and counties to donate taxpayer funds to numerous nonprofits. Among this year's winners are Vicksburg Family Development Service and unnamed Rankin County "nonprofit organizations that provide recreational and/or sports opportunities, for the purpose of constructing or maintaining recreational and sports facilities."
Became Law Without Governor's Signature
Suffrage Restoration Bills (HBs 612, 742, 1475, 1750 and SBs 2107, 2951):
If the governor does not sign or veto a piece of legislation, it automatically becomes law without his signature after a certain number of days. Gov. Bryant refused to sign or veto any of the six bills the legislature passed to restore voting rights to specific individuals. They became law on April 20.
Partially Vetoed Bills
Line-item vetoes (HB 1502/SB 2956/SB 3015): The governor is allowed to veto portions of appropriations bills he signs. This is known as a line-item veto. Gov. Bryant vetoed an earmark in the Department of Education appropriations bill, HB 1502. He also vetoed a section of SB 2956 because it had the effect of changing a general law, which appropriations bills are not supposed to do. In SB 3015, he vetoed an item that would have provided $50,000 for a project for which a no-cost option is available.
Significant Legislation that
Did Not Become Law:
Modernizing the School Funding Formula (HB 878/SB 2607): While a handful of bills related to school funding were introduced, lawmakers never saw a final bill that overhauled the state's current education funding formula, known as MAEP (Mississippi Adequate Education Program), which has been in place since 1997. The legislature hired a consulting firm, EdBuild, to recommend changes to the formula. The initial recommendations would not have generated enough support in the legislature, so they remain on the drawing board. If a satisfactory solution is devised, lawmakers could consider a funding formula bill in a special session.
More Funding for Roads (HB 480/SB 2939/HB 1732): One of the hot button issues over the past few years has been whether to allocate more money for road and bridge repair, rebuilding, and maintenance. This year, the House approved a bill (HB 480) to fund such work by requiring out-of-state companies with no presence in the state to collect a "use tax" (similar to a sales tax) on internet sales. The U.S. Supreme Court has said it is unconstitutional for states to require such companies to collect such taxes without specific approval by the U.S. Congress. HB 480 died in the Senate, but the House later approved an amendment to an unrelated bill (SB 2939) that would have allocated money collected from an internet tax if companies collect and remit the tax voluntarily (as Amazon is already doing), or if the Supreme Court reverses its ruling, or if Congress approves such an action. The House amendment would have diverted the expected windfall from the Amazon internet sales tax agreement to a special fund for road repair. Finally, HB 1732, sponsored by Speaker Philip Gunn, would have borrowed up to $50 million for county/local bridge repair.
Lawmakers did not reach an agreement on the annual appropriations bill for the Mississippi Department of Transportation (MDOT) and will return to the Capitol on June 5, supposedly to pass that and an appropriation for the Attorney General's office. This must be done by July 1, which is the beginning of the state's fiscal year. If there is agreement on other road and bridge funding, that could be added to the special session by the governor. (The governor dictates what the legislature considers in a special session.)
Lottery (HB 804): A House committee completely gutted an unrelated bill and inserted provisions that would have implemented a state lottery. It was never taken up on the House floor, but if it had been, it would have been struck down under House rules intended to prohibit the method used by the committee to change the purpose of a bill. Speaker Philip Gunn has called for a study of the lottery, saying any money spent buying a lottery ticket is money not spent at private, job-providing businesses.
Multipurpose Bond Bill (HB 1734/SB2281): Every year, many bills are introduced to borrow money for a variety of projects by issuing state bonds, but only one or two "bond bills" are approved, usually combining some of the projects that were in the individual bills, along with building construction/repair requests regularly made by state colleges and universities. This year, both houses passed their own versions, which is common. But ultimately, no agreement was reached between the houses, in part because of the question of whether to borrow money for road and bridge maintenance. As a result, no additional debt will be added this year for such projects for taxpayers to repay in future years. However, see SB 3033 regarding bonds for "economic development" projects.
Expanding DOR Debt Collection Activities (HB 687): Mississippi law currently allows state universities to collaborate with the Department of Revenue in withholding tax refunds to pay off educational loans issued by the state. This bill would have expanded DOR's debt collection activities to include community/junior colleges. What killed the bill was an amendment to allow hospitals to have the same ability to use DOR as their debt collectors. The measure ultimately died in conference.
State Agency Lobbying Reform (SB 2632/SB 2843): Both of these measures would have banned agency lobbying while leaving agency employees free to share technical and factual information with lawmakers. SB 2632 passed the Senate and a House committee, but was never taken up on the House floor.
Teaching the Constitution (HB 433): For Mississippi high school students, the U.S. History "subject area test," which they must take before graduating, starts in the 1870s, with the result that prior historical periods (for instance, the Founding and the Civil War) are neglected. This measure would have required the State Board of Education to implement a test identical to the civics test given to immigrants who want to become U.S. citizens. Fifteen states currently have a similar requirement. The civics test's 100 questions cover some current facts, such as the name of the president, but most of it is a good smattering of questions that cover the whole span of U.S. History. This bill died on the House calendar but the sponsor received assurances from the state Department of Education that a review will be done in their already-scheduled review of history curriculum.
Vetoed Bills
Even Righter on Crime (HB 1033): Promoted by a coalition of local and national conservative organizations (including MCPP) known as "Right on Crime," as well as unusual allies on the center and left, this bill built upon reforms enacted three years ago aimed at using a cost-effective, safe and humane approach to right-sizing Mississippi's criminal justice system. This year, HB 1033 was designed, among other things, to make it easier for ex-convicts to obtain and retain a job, thus enabling them to take care of their families and making them much less likely to return to criminal behavior. For example, the bill would have allowed those on probation or parole, if they have a job, to use FaceTime or Skype (or similar) to check in with parole or probation officers, making it unnecessary to leave, and possibly lose, their jobs. The governor vetoed the bill due to a last-minute addition that would have permitted habitual nonviolent offenders to be eligible for parole after serving only 25 percent of their sentence, as currently allowed for non-habitual nonviolent offenders.
Emergency Service Telephone Fees (SB 2861): This bill was vetoed by the governor because of a technical error that made it inoperable.
Payment of Damages to a Private Citizen (SB 2349): This bill would have allowed Forrest County to donate more than $100,000 to various private entities, as do other bills for other localities. But this one was vetoed because it also included a $45,000 payment to an individual for damages that were litigated decades ago, which were ultimately dismissed by a court in 1982.
Municipal Qualified Resort Areas (HB 1447): Among other things, this bill would have enabled entire municipalities to become qualified resort areas, which in turn, would allow these areas to sell alcoholic beverages. The governor vetoed the bill because it indirectly overturns the current Local Option Alcoholic Beverage law, which allows individual communities to regulate such sales.
Mississippi's Legislature took a little-noticed but very important step this session in amending the law to make it easier for our residents to get jobs. With the vision of an independent group headed by Federal District Judge Keith Starrett, and the hard work of Rep. Andy Gipson and Sen. Sean Tindell, the Legislature addressed a number of provisions in the state criminal code that have, over the years, prevented people from gaining or keeping jobs and prevented employers from hiring the people they need.
House Bill 1033 is a significant piece of legislation that helps individuals who have committed misdemeanors and other nonviolent crimes, as well as certain people leaving prison, reenter the workforce. The goal of HB 1033 is to remove barriers to employment that exist in the criminal code. Whenever possible, it's in the best interest of Mississippi for those who are incarcerated to become law-abiding, productive, taxpaying members of the workforce. The bill accomplishes these goals with several provisions.
First, it encourages recently released offenders to pay off the fees and fines they owe to the state. It reduces our reliance on incarceration for those who are unable to pay fees and fines, while providing judges the ability to establish payment plans and punish those who willfully choose not to pay. The bill promotes work by ensuring that inmates have opportunities to work off their debts while incarcerated.
Second, it moves more eligible individuals back into the workforce. The bill provides the state's Parole Board with additional discretion to grant parole to nonviolent offenders who are a low risk to public safety and good candidates for employment. The Parole Board, which is appointed by the governor, would maintain discretion about which individuals are good candidates, and monitor and supervise them as they return to the community. House Bill 1033 provides them additional tools to supervise individuals, with the goal of improving the quality of supervision and public safety. These provisions will also protect taxpayers by saving the state more than $20 million in incarceration costs, in addition to boosting tax revenue generated by increased employment.
Finally, the bill creates several avenues for research and reporting. All of the decisions about how to implement these reforms is guided by data and statistical evidence to support its effectiveness. This bill furthers those interests by gathering better information on sentencing and incarceration. This information will be vital to guide the state's criminal justice policies going forward.
The Legislature supported this bill overwhelmingly, and it passed both the House and the Senate unanimously. Gipson deserves enormous credit for his authorship of the bill and his leadership on this issue. House Bill 1033 is a step forward for public safety, accountability in state spending, and data-driven policymaking for the state of Mississippi. We urge Gov. Bryant to sign HB 1033 so that Mississippi can continue to lead the way in criminal justice reform and increase employment in our state.
By Mike Hurst
Recently, while most Mississippians were busy working, raising families and just trying to get by, the state of Mississippi held a little noticed hearing to consider imposing taxes on a significantly larger number of our residents. This occurred after the Mississippi Legislature had already left town, leaving no opportunity for our elected officials to publicly debate this important issue at the state Capitol or cast votes on it. Rather, as has unfortunately become a fact of life in our day and age, unelected bureaucrats in a state government agency, with little fanfare and even less explanation, began a process to expand regulations that will require many Mississippians to pay more taxes with minimal public input and even less accountability.
A few months ago, the Mississippi Department of Revenue filed a notice with the Secretary of State's Office, signaling that DOR would be amending several of its existing regulations. One of these revised regulations would expand the definition of hotels and motels to include rooms in people's homes, as listed on popular internet websites like Airbnb or VRBO. Another proposed DOR regulation expanded the application of local tourism taxes.
These regulatory changes proposed by DOR come on the heels of another recent attempt by DOR earlier this year to require out-of-state companies to collect taxes on sales made to Mississippians over the internet, despite the fact that the U.S. Supreme Court has clearly stated this is illegal and DOR's own commissioner has admitted that what DOR is doing is "probably unconstitutional."
State law requires DOR to timely notify the public of proposed rule changes. DOR did not do so. State law also requires DOR to issue a statement showing the impact of proposed rules on the economy. Again, DOR failed to do so. State agencies are required by law to prepare such economic impact statements when adopting significant amendments to existing regulations. However, in the 11 years since such statements have been required, DOR has never issued one!
The most troubling aspect of all of these proposed regulations is that DOR's actions represent a trampling of the doctrine of separation of powers in our form of government. This unelected bureaucracy is unconstitutionally commandeering authority from our legislative branch to make laws, rather than simply implementing them.
Regarding DOR's proposed tax on people's homes, bills were introduced in both houses of the Legislature during the 2017 legislative session to change the definition of hotel and motel under the local tourism tax to include short-term rentals of residential properties.
None of these bills became law.
Despite our elected representatives choosing not to change the law, this unelected state agency is now attempting to legislate by regulation. The same thing happened with internet taxation, as the Legislature considered and rejected changes to state law to allow DOR to tax out-of-state sellers like Amazon. Again, notwithstanding our elected officials opting not to enact such a law, DOR is proceeding with regulations to do it anyway.
This silent and gradual encroachment into our lives by an unelected and unaccountable Fourth Branch of government is deeply troubling for our form of government and the future of liberty. This governing by regulation is not what our founders intended, not what was written into the Constitution, and not what our government was built upon. Our elected officials need to step up and put a stop to this regulatory tyranny. But we the people also need to let our voices be heard by getting more involved in the rule-making process and challenging bad rules in court.
The only way unaccountable agencies are going to change is if we make them do so.
By Dr. Jameson Taylor
Every year my aunt sends me $5 worth of lottery tickets for my birthday. One year I won $2; another year $1; this year, I won an additional ticket, which also proved a loser. The closest I have come to recouping my aunt's investment is the year I won $4. I was thrilled, but not as thrilled as I would have been had she sent me cash instead. I just don't have the heart to tell her that her birthday present is little more than a tax receipt printed on fancy, scratch-off paper.
A lottery is only good for one thing: concealing the creation of a new tax. We've all heard the stories of how much revenue a lottery could generate. Governments generate revenue in essentially three ways: taxes, fees and fines. According to the Tax Foundation, the legal definition of a tax is that its primary purpose is to raise revenue. A fee, on the other hand, is "a charge imposed for the primary purpose of recouping costs incurred in providing a service" while a fine is "imposed for the primary purpose of punishing behavior." Based on these distinctions, the Tax Foundation concludes, "The lottery is in part a tax ... the classic definition of a tax, upheld in nearly every federal and state court."
The North American Association of State and Provincial Lotteries boasts that 27 cents of every $1 spent on lottery tickets goes back to the government. This payment is not to be confused with taxes generated from winnings. In other words, state-run lotteries impose a 27 percent tax on the mere act of purchasing a lottery ticket.
It is irrelevant that buying the ticket is voluntary. Taxes are imposed on all sorts of voluntary activities, ranging from using a phone to going to the movies. What is unique about a lottery is that it is a state-run monopoly on a nonessential service -- very different from natural monopolies, like water and electricity provision, with high startup costs. The purpose of the lottery monopoly is not to provide for a public need or to protect the public welfare, but to generate revenue. It's a tax.
Moreover, the lottery is a bad tax. It's inefficient, with much higher administrative costs than other forms of taxation, and it encourages nonproductive, if not downright destructive, behavior.
Let's look at a similar case: the ongoing debate over marijuana legalization. Economists believe marijuana legalization could generate billions of dollars in tax revenue. In 2016, Colorado collected $200 million in taxes on $1 billion in "legal" marijuana sales. That's a lot of money that could be used to fund roads and education. But at what cost? As with the lottery, some people would become addicts. As with the lottery, sales would drain money from other, likely somewhat more productive, purchases and activities. As with the lottery, lower-income, less educated users would consume a disproportionate share. In the case of marijuana legalization, the government would be condoning and profiting from a questionable activity. In the case of lottery legalization, the government would be initiating, advertising, promoting and bolstering a questionable activity.
While lottery advocates claim "people from all walks of life play the lottery,” they often sidestep the question of who plays the lottery most frequently. (As I mentioned, even I "play the lottery" once a year on my birthday.) Research shows that those in the lowest income bracket play 2.5 times more than everyone else and that "increased levels of lottery play are linked with ... males, blacks, Native Americans, and those who live in disadvantaged neighborhoods." A recent 10-year analysis of the New Jersey lottery confirms the typical player has a below-average income and lacks a college degree.
Those who tend to play the lottery most often, it seems, are either poor or think of themselves as poor. In this respect, the lottery is a tax on false hope. And while it may not be the government's business to tell people what or who to hope in, government shouldn't be monopolizing and encouraging such deception.
We already have enough taxes in Mississippi, and we already have enough false hopes. Let's not add anymore with a lottery.
You won today! And Mississippi won today too!
Thanks to you, we were able to help pass what one Mississippi senator referred to today as "the most ambitious welfare reform" in the country. In supporting our work, you are helping thousands of Mississippians move from dependency to dignity, from poverty to prosperity, and from welfare to work.
- Requires able-bodied adults to get off SNAP (food stamps) and get back to work.
- Removes millionaires and mansion owners from food stamps by restoring federal income and asset tests.
- Tracks out-of-state spending to stop welfare fraud and abuse (think: ATMs at Walt Disney World).
- Protects Medicaid and other welfare programs for those who are truly eligible by giving state employees new tools to eliminate fraud.
- Saves Mississippi - and federal - taxpayers millions a year by removing fraudsters and identity thieves from our welfare rolls.
Honor System for Welfare Not Working
Trust, but verify. Seems like commonsense. Unfortunately, government programs are often lacking in common sense. According to the Miss. Department of Human Services, self-verification is the method used to determine eligibility for Food Stamps, also called the Supplemental Nutrition Assistance Program (SNAP). The director of Fraud Investigation with the department acknowledges: “The application process for SNAP is based on an ‘honor system,’ trusting that applicants truthfully submit their income and number of dependents.” It should come as no surprise that some people aren’t telling the truth about their identity or residency or income when applying for welfare, whether it be Food Stamps or Medicaid. What is surprising, unbelievable really, is that the state is not really verifying who people are, where they live, and whether they are actually in need. The result is millions of taxpayer dollars lost to fraud, waste and abuse. This is savings that could be going to help the nearly 8,000 Mississippians with disabilities and other serious needs on a waiting list for Medicaid’s Home and Community Based Services. It is savings that could be going to patch holes in our Medicaid budget, or state budget.
A bill (HB 1090) moving through the state legislature would require Miss. welfare programs to use a verification service to check for things like identity and residency. Using databases easily accessible in the private sector, this service would discover whether a Social Security number is being fraudulently used. When Illinois ran a similar audit they found 14,000 dead people on their Medicaid rolls. The eligibility review would also check things like whether someone on Mississippi Medicaid is paying property taxes in another state – a likely sign the recipient is not a Mississippi resident. It would check incarceration status and death records and immigration status – all the things any reasonable voter assumes are already being verified to protect the integrity of our welfare programs.
HB 1090 also includes commonsense reforms like expecting SNAP enrollees to cooperate with a fraud investigation. The bill would track where welfare benefits are being accessed and spent. When Maine ran such a check, they found $3.5 million worth of transactions in Florida, including hundreds of thousands of dollars in withdrawals from ATMs near Walt Disney World. When the state of Florida ran such a check, they found 3,500 of their Food Stamp recipients were also receiving Food Stamps in at least one other nearby state, including Mississippi.
Those who claim welfare fraud is not a problem in Mississippi are mistaken. It is so much of a problem that in 2015 the Mississippi Department of Human Services (DHS) was awarded a $1.9 million federal grant to help eliminate fraud. It is so much of a problem that the state auditor has found millions in questionable TANF costs and warned that the “failure to maintain supporting documentation for eligibility as well as not monitoring and reducing benefits” as required could result in the state having to repay federal funds.
Similarly, we have seen recent arrests for welfare fraud in several counties. According to news reports, DHS has been “knocking, one door at a time, looking for people who’ve applied for food stamp benefits that aren’t entitled.” Instead of going door-to-door, we can harness the power of technology to catch a good bit of that fraud with the click of a button.
It is no accident that the states most committed to a robust social safety net are also rooting out fraud most aggressively. The first state to proactively verify its Medicaid rolls was Pennsylvania, which launched its own program in 2011. They identified 160,000 ineligible welfare recipients in the first 10 months and saved the state nearly $300 million. Illinois, Minnesota, and Massachusetts soon followed. Altogether, those four states are seeing a combined savings of $1.3 billion annually. We estimate Mississippi would save $40 million annually, based on a fraud rate of 10 percent.
If we want to protect our Medicaid and other welfare programs for those who are the poorest of the poor, the disabled, the elderly, we need to eliminate fraud and waste. We owe it to all Mississippians – including those who are truly eligible to receive these benefits – to be good stewards of these programs.
Jameson Taylor, Ph.D.
Vice President for Policy, Miss. Center for Public Policy