(JACKSON) – The Board of Directors of the Mississippi Center for Public Policy (MCPP) has named Jon L. Pritchett as its new President and CEO. Pritchett is a native of North Carolina and comes to MCPP from the Tar Heel state’s John Locke Foundation, one of the nation’s oldest and most respected free-market, public policy think tanks, where he was Senior Vice President. Pritchett replaces MCPP's longtime president, Forest Thigpen. Before working in public policy, Pritchett spent nearly three decades in the private sector in a variety of leadership positions. Among other executive roles, which included investment banking, public relations, and sports marketing, Pritchett was CEO of AstroTurf USA. MCPP Board Chairman, Mike Dawkins said, “Jon Pritchett understands that the purpose of a free-market think tank is to guide policy, not based on political party affiliation, but based on principle. Jon will have a broad appeal to Mississippians across ideological lines. He communicates well with people with whom he may not agree because he respects their perspectives, while still holding to principles that will create a better place for all Mississippians. He challenges the mindset that a 'conservative' lacks compassion for the economically disadvantaged. Jon has succeeded as a business person and as an emerging leader in the free-market movement. Our board believes we have found an outstanding leader to guide MCPP.” “Jon Pritchett is the consummate professional,” remarked John Locke Foundation Board Member, Theodore Hicks. “He loves liberty and is willing to fight for her, but always as a well-articulated, gentleman. Our loss is Mississippi’s gain. With Jon at the helm of MCPP, there’s no doubt that freedom in Mississippi will expand,” added Hicks. When asked why she thought Pritchett was the right person to lead MCPP, MCPP Board Member, Gloria Walker responded, “We are beyond delighted that Jon and his family are moving to Jackson. We welcome the experience, passion, and energy that he brings to the position of President and CEO, because these skills are necessary for us to be successful in our mission to increase transparency at all levels of government. We look forward to working with Jon and are confident that he will bring a respect for traditional values that many Mississippians hold so dear. MCPP is very much alive and ready to start a new chapter.” Pritchett will join the organization at the beginning of April. According to Pritchett, his immediate goals are focused on communications and fundraising. “The excellent work of MCPP and its talented staff is not as well-known across the state of Mississippi as it should be. Mississippians need to know about the vital work MCPP and the Mississippi Justice Institute do to fight the enemies of liberty, to enhance freedom, to limit government, to ensure choice and competition, and to promote the foundational principles of a thriving society, including individual responsibility and strong traditional families. And this work cannot be done in a robust and meaningful way without raising funds from individuals, foundations, and businesses,” said Pritchett. Unlike most 501(c)3 non-profit organizations, the Mississippi Center for Public Policy takes no money from government sources at the local, state or federal level. Pritchett continued, “I’m honored to have the opportunity to work with our staff and board to build onto the substantial foundation developed over 25 years by Forest Thigpen." Jon is no stranger to Mississippi. When Jon was CEO of AstroTurf USA, Mississippi native Archie Manning served as AstroTurf''s spokesperson. Manning remarked, “I’ve known Jon since 2007, when I became involved with AstroTurf. He’s a strong leader, and I’m excited for Mississippi and for Jon.” In addition to his role as a leader, manager, and fundraiser, Pritchett also writes op-eds on a variety of public policy issues, including corporate social activism, business regulations, culture wars, the business of sports, and leadership. His work has been published in the Wall Street Journal, Forbes, The Federalist, and Washington Examiner, among others. He has appeared on the Fox Business Network, the YES Network, and on the BBC. Pritchett also co-hosts a weekly podcast called Head Locke, which is a unique look at current news, culture, sports, business, and public policy. Read Jon Pritchett's Bio HERE Download Jon Pritchett's Head shot HERE #### The Mississippi Center for Public Policy (MCPP) is an independent, non-profit, public policy organization based in Jackson, MS. MCPP works to promote and protect the concepts of free markets, limited government, and strong traditional families.

Ron Matis, Gov. Phil Bryant and MCPP VP for Policy Dr. Jameson Taylor

Victory for charter schools in Mississippi

Mississippi Justice Institute and other defendants protect constitutionality of charter schools according to trial court

 (JACKSON) – Hinds County Chancery Judge Dewayne Thomas ruled today in the lawsuit challenging the constitutionality of charters schools in Mississippi. Judge Thomas ruled in favor of the charter schools and their parents, and against the Southern Poverty Law Center.

Mississippi Justice Institute (MJI) Director Shadrack White, who represents the parents of charter school students, said, “This is a critical victory for the parents and their children who attend charter schools in Mississippi. Judge Thomas saw that the constitution does not trap my clients in their traditional public schools when public charter schools provide a better option. These parents know what’s best for their children.”

The charter lawsuit turned on whether the Mississippi Constitution allowed funding from state and local governments to be spent at charter schools. “Our case was simple,” said White. “My clients pay taxes, so they should have the right to take that money to a public charter school if that is a better option for their children. These schools are making their lives better. The plaintiffs in this case, however, had an extreme argument: that the funding for charter schools, agricultural schools, some alternative schools, and other types of non-traditional public schools should be barred.”

“As this case marches forward, I am going to continue thinking about all the good that charter schools have done for my clients, like Gladys Overton and her daughter Drew,” said White. “When we started this case, Gladys told us that, in her old school, Drew experienced nonstop bullying and a difficult classroom environment. Drew moved to ReImagine Prep, a charter school in Jackson, and today she is thriving. She was the most improved student in her class last year and, like every other student at ReImagine, is learning computer coding skills to prepare her for the workforce.”

“Students like Drew are who we fight for,” added White.

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One benefit of doing the right thing is that it just works better. We know that innovation and choice are good for parents and kids, but the economic and social impacts can also be a game changer for our state.  School choice for Mississippi can help create jobs, lower the crime rate and reduce welfare dependency. School choice works and will help average Mississippians get back to work.

The following is the abstract from a new study released by the Institute for Market Studies at Mississippi State University titled Mississippi’s Game Changer: The Economic Impacts of Universal School Choice in Mississippi.

Mississippi has a unique opportunity to improve its future economic condition through implementing a fully universal Education Savings Account (ESA) program. We forecast the economic impacts of such a program accrued through decreased criminal activity, increased high school graduation rates, and increased lifetime earnings. Our models assuming a higher rate of program participation find:

● Mississippi would pass West Virginia in 14 years on per capita personal income, and the advantage would grow to around $2,300 per person by the year 2036.
● Mississippi’s streets would have 9,990 fewer felons and 13,824 fewer misdemeanants by 2036, leading to a reduction of over $384 million in costs to society.
● Mississippi would have 7,798 more graduates by 2036, leading to social benefits in excess of $1.6 billion.

Our models assuming moderate rates of program growth find:

● Mississippi would pass West Virginia in less than two decades on per capita personal income and the advantage would grow to around $700 per person by the year 2036.
● Mississippi would have 6,191 fewer felons and 8,566 fewer misdemeanants by 2036, leading to a reduction of over $238 million in costs to society.
● Mississippi would have 5,338 more graduates by 2036, leading to social benefits in excess of $1 billion.

Read the full study HERE

Lotteries tend to be popular with the public because they conjure up dreams of easy money and the good life. Indeed, Mississippi voters approved the concept of a state lottery in 1992 when they repealed a constitutional ban on lotteries. That same year, Mississippi’s first dockside casino opened. While many forms of gambling are now legal in Mississippi, state law still prohibits the operation of a lottery and the in-state purchase of lottery tickets. 

In evaluating whether Mississippi should legalize the lottery, lawmakers should realize, first and foremost, that the lottery is a kind of tax – and that, in particular, it is a regressive, or unfair, tax that has negative social impacts.

The Lottery is a New Tax

The primary purpose of a state-monopolized lottery is to generate revenue for the state. This reality is not well understood. There are essentially two types of lotteries: those operated by private vendors; and those controlled by government. Because private lotteries have historically been plagued by corrupt practices (and not infrequently government-run lotteries as well), states have sought to control their own lotteries.

Currently, all but a handful of states have state-controlled lottery monopolies. These monopolies are unique insofar as they are not “natural monopolies.” Road building, sewerage provision, and until recently, mail delivery, are examples of natural monopolies typically presumed to be properly controlled by government. In the case of the lottery no overriding financial or logistical reason justifies a government monopoly.

The state’s monopoly over the lottery allows it to charge a price for the lottery ticket that is well above what a private lottery might charge. This excess charge is essentially a tax. The tax is around 27 percent, but it varies in every state. This 27 percent surcharge is what in gambling parlance is called “the vig.” It’s what “the House” gets regardless of the outcome. In the case of the lottery, the House is the state – and it has a big edge. After the government gets its take, the rest of the money generated by the lottery will go toward winnings and administration. Then, the actual winner has to pay state and federal income taxes on top of that.

It might seem strange to think of the lottery as a tax. The Tax Foundation explains:

Lottery revenue meets all three tests for defining a tax. Current U.S. Supreme Court Justice Stephen Breyer laid out the criteria for defining a tax when he decided the San Juan Cellular case for the First Circuit Court of Appeals in 1992. Breyer argued that a judge should consider who imposes the assessment, who pays the assessment, and what the revenue is spent on.

In the case of a lottery, the Mississippi legislature would be imposing the assessment – just like any other tax, as opposed to a targeted fee imposed by a state agency. Likewise, lottery ticket buyers represent “a broad swath of the public,” rather than a “narrow group that benefits from a particular government service.” In its application, the lottery thus functions like a tax, rather than a fine or fee. Finally, lottery revenue is generally fungible, or at least spent on a “broadly defined benefit.” In short, the lottery meets all three legal tests for defining a tax.

The following statements by lottery proponents confirm this conclusion:

“The Legislature is not passing any revenue (tax increase). That (lottery revenue) is money available for education – should be spent on education.” – Mississippi Attorney General Jim Hood

“When you’re looking at some of the challenges that we’re having and you see a revenue bill that would generate somewhere between 50 and 60 million dollars – just an estimate – I think that's something that needs to be taken seriously by the members of both the House and the Senate.” – Mississippi Governor Phil Bryant

“I think it should go to education. But in as much as when we earmark money, sometimes we take that money from that department, so with that in mind, the best thing would be to just put it in the general fund.” – State Rep. Alyce Clarke

In summary, the lottery is a “revenue bill” that will be passed with the intention of generating money for the General Fund, or at least, for a broadly defined purpose, such as education. In other words, it meets the legal definition of a tax.

Lottery proponents often balk at defining the lottery as a tax, asserting that buying a lottery ticket is voluntary. Because the state would hold a monopoly over the lottery, however, the tax is not voluntary at all. In order to purchase a lottery ticket, consumers must pay the lottery tax. True, participating in the lottery is not mandatory, but neither is purchasing a car, earning income, or doing all manner of things that are taxed. As long as the primary purpose of the lottery is to generate revenue, and as long as a significant portion of lottery profits are collected as revenue, the lottery is a tax.

Under Mississippi’s joint legislative rules (rule 18), all bills generally related to revenue must be accorded a 3/5 vote by the legislature. Because the lottery is a tax (and, at a minimum, related to raising revenue) any bill that would create a state-controlled lottery must pass by a 3/5 vote in the Mississippi legislature. Otherwise, the lottery will be challenged in state court.

Because the lottery is a tax, its fiscal impact must also be evaluated in light of other forms of taxation. While all taxes influence behavior in some way, economists generally agree taxes should have low compliance costs, be fairly applied and minimize negative social impacts.

The Lottery is a Bad Tax

In comparison to other taxes, the lottery is particularly bad policy. To begin with, the lottery is an inefficient tax with high administrative costs. Observes economist Dr. Roy Cordato: “To raise a dollar’s worth of state revenue through a lottery could cost anywhere from 20 to over 50 times more than it would cost to raise the same dollar through other forms of taxation.” These administrative costs are thought to range between 15 percent and 20 percent and go toward advertising and paying retailers who sell lottery tickets.

In addition, the lottery is an unfair, or “regressive” tax. Generally speaking, “a regressive tax imposes a greater burden (relative to resources) on the poor than on the rich.”

In 2015, Americans spent $73 billion on lottery tickets. That’s about $630 for every household in the United States. It’s also about the same amount spent on the SNAP (Food Stamps) program annually. According to the Associated Press, Americans spend more on the lottery than on “movies, video games, books, music and sports tickets combined.” 

Every American household, however, is not spending $630 on the lottery. Generally, the poorest one-third of Americans buy more than half of all lottery tickets. Even the North American Association of State and Provincial Lotteries, an industry association group, acknowledges 25 percent of lottery players earn less than $25,000 annually.

A report from Harvard’s Shorenstein Center on Media, Politics and Public Policy reviews some of the academic literature demonstrating the regressivity of the lottery tax:

A 2012 report in the Journal of Gambling Studies finds that “those in the lowest fifth in terms of socioeconomic status (SES) had the ‘highest rate of lottery gambling (61%) and the highest mean level of days gambled in the past year (26.1 days).’”

A 2011 study, also in the Journal of Gambling Studies, concludes the “poor are still the leading patron of the lottery.”

A 2010 report in the Journal of Community Psychology observes that “lottery outlets are often clustered in neighborhoods with large numbers of minorities, who are at greatest risk for developing gambling addictions.”

Likewise, a 2009 survey commissioned by the South Carolina lottery found that those earning less than $40,000 a year constitute the majority of lottery players, even though they make up less than one-third of the state’s population. Another 10-year study that looked at lottery sales data in 39 states found “a strong and positive relationship between sales and poverty rates” (but not a similar relation between poverty and movie ticket sales, movies being an alternative form of inexpensive entertainment). The authors, however, conclude that “the poor are relatively more likely to see the lottery as a financial investment, and relatively less likely to play for entertainment.” Similarly, other research suggests lottery ticket purchases are financed by forgoing basic necessities. Generally, the breakdown is a 3 percent reduction of spending on food; and a 7 percent reduction on rent and other items.

Again, all this is to say that the lottery is a regressive tax disproportionately paid by low-income people.

In terms of tax policy, it’s also helpful to consider what kind of behavior a lottery tax encourages or discourages. The real question here is whether a state lottery would encourage more gambling or whether it would merely capture gambling that is already occurring via other lotteries in neighboring states.

The answer is complex. Clearly, Mississippi is hoping to both capture a market that exists (and is being diverted to other states) and also develop a new market. The strongest argument for a state lottery is that the state is losing lottery tax revenue to other states when Mississippi residents buy lottery tickets in other states. Interestingly enough, the two states immune to this dynamic – Alaska and Hawaii – do not have state lotteries.

Clearly, for many Mississippi residents, travelling to another state to buy a lottery ticket constitutes an investment of time and money – what economists call an “opportunity cost.” Some evidence suggests that, all things being equal, large jackpots are necessary to attract middle-class and out-of-state customers to buy out-of-state lottery tickets. When the jackpot is high enough, people will drive to another state to buy a lottery ticket. These same customers are more likely to play the lottery as a form of entertainment.

By contrast, low-income players disproportionately favor scratch-off (instant win) lottery cards; and the largest segment of lottery revenue (as high as 80 percent) comes from scratch-off games. For this reason, scratch-off cards represent the worst, and most regressive, form of lottery taxation. While the state is likely “losing” some revenue to players who cross the border to play scratch-offs, the spontaneous nature of such play suggests the loss is minimal. No doubt, a legalized lottery will see targeted advertising aimed at creating new players for these games. As in other states, much of this advertising will appear in low-income neighborhoods. As in other states, every year will see new marketing plans aimed at attracting new players. As in other states, new and more games will be developed with the hope of increasing frequency of play. In order to keep generating revenue from the lottery tax, the government will become the foremost proponent of gambling in Mississippi.

Some readers will note that this brief is silent about the ethics of a lottery. From an economic perspective, a lottery is destructive because it is a nonproductive activity. As stated above, the lottery, at best, is a form of entertainment; at worst, it is encouraging poor financial decisions by those who can least afford to gamble away their resources. In terms of tax policy, the lottery constitutes a high new tax with a regressive impact on the majority of players.