Mississippi’s real gross domestic product outpaced the national and Southeastern average for the second quarter of 2019.

Mississippi’s GDP grew by 2.3 percent compared to the first quarter of the year. This was part of a national trend that saw growth among all 50 states. The national average was 2 percent and the Southeast average, which does not include Texas, was 1.7 percent. Texas posted the strongest numbers in the country at 4.7 percent.

Professional, scientific, and technical services and real estate were two of the leading contributors to the GDP growth. Mississippi’s numbers, however, were below others in both sectors. Mining, which helped many western states see big gains, increased by 23.5 percent nationally.

A look inside Mississippi’s numbers reveals noticeable positives for the state, and areas that need improvement. 

• Mississippi outpaced the Southeastern average in agriculture (and related industries), utilities, construction, durable goods manufacturing, retail, and finance.
• Mississippi trailed the Southeastern average in real estate and professional, scientific, and technical services. 
• While wholesale trade was down nationally, Mississippi saw smaller loses than Southeastern and national numbers. 
• Mississippi had the 3rd highest growth in government, behind only Maryland and New Mexico.
• Mississippi’s percentage of the U.S. GDP has been 0.6 percent for the last six quarters. 

Percentage change in GDP, Southeast states

Mississippi led every Southeastern state in change of GDP. Florida was the only other Southeastern state above 2 percent. Kentucky had the lowest change, with a growth rate of 1 percent.  

In the first quarter of 2019, Mississippi’s GDP grew by 1 percent compared to the Southeastern average of 2.6 percent. 

Today’s technology has helped usher in what is commonly referred to as the sharing economy. This is a broad term we use for an economic system where services are provided in exchange for a fee, via a third-party facilitator. 

The most common examples of the sharing economy are ridesharing and homesharing apps, such as Uber, Lyft, Airbnb, or HomeAway. On the surface, escorting people around town in a car or renting out a spare bedroom aren’t exactly technologically advanced ideas.

It is the digital platforms or apps that have centralized the process and provided a certain level of comfort as a virtual middleman that has led to the explosion we are witnessing.  

We see this in many other areas of our life as well. Peer-to-peer websites or apps, whether it’s Yelp, Facebook, Google reviews, and others, do a better job of providing feedback to potential customers than any government inspector.

Sure, government grades restaurants, but most people make their decisions on where to eat based on feedback from past customers. If an establishment was dirty, you’d read about it there, rather than from a government grade. 

A common example of a profession that depends on positive feedback is home bakers, who are part of the rapidly growing cottage food industry. In deference to the incumbents who have paid a regulatory price, Mississippi limits what you can sell, where you can sell it, and how much you can make before you bow to the government and seek permission.

While many have attempted to warn us of the dangers of cookies or brownies baked at home in a non-government approved kitchen, we can find high-quality food via reviews from happy (or unhappy) customers. 

Once again, we’ve always had word of mouth reviews among friends, but technology has helped bring that to the masses, elevated peer reviews, and forced businesses to bring greater attention to customer satisfaction.

In fact, if you suffer from repeated negative reviews, you will no longer be able to rent your house on Airbnb, nor will you be able to drive for Uber.  

All of this is occurring naturally, rather than with the help of government. The response from those whose industry has been interrupted is not surprising. But it is unfortunate how government has attempted to intervene in the free market in too many instances.

When Uber first made its way to Mississippi, the reaction from many localities was to enact strict regulations. After all, the taxis had spent years building their industry cartel working alongside government. Now, you had a group doing it without government’s blessing.

One of the most egregious examples of an overzealous government was in Oxford, a college town who has a greater need for this service than most. They coordinated with the local taxi companies on regulations that effectively banned ridesharing options. 

Today, Uber and Lyft operate freely in Mississippi thanks to the legislature pre-empting municipalities and opening ridesharing statewide. It is clear that the legislature’s work is not done in supporting consumers and entrepreneurs in the face of local government interference.

A map of current Airbnb rentals is a good indicator of places people want to visit. One might assume those governments would want to welcome visitors, but we have seen Gulfport and Biloxi take adverse actions, with Starkville considering new regulations that would limit the number of nights you could rent your house and enforce a residency requirement.

Meaning, you can’t buy a house and rent it out, something relatively common in a college town with SEC football. The net result would be fewer options for visitors. 

The incumbent companies will complain that the playing field isn’t level with the new technologies. If that’s the case, we should regulate down, rather than up. We should make it easier for everyone to do business safely. Yes, it should be easy to rent out your house. Just like it should be easy to open a new hotel. 

All of these new technologies are inherently positive. They are positive for the entrepreneur, who may need supplemental income and flexibility with their job so they can pursue an education and/or care for family. Regulating up and making it harder for these services to exist will hurt the people who need jobs the most. And they are a positive for the consumer who now has new options in what they can choose.

This is voluntary exchange and we should be encouraging it. 

This column appeared in the Clarion Ledger on November 7, 2019.

Voters in Simpson county on Tuesday approved a referendum that will legalize alcohol sales countywide.

According to unofficial reports, 61 percent of voters supported the referendum, meaning Simpson county will soon become a ‘wet’ county. 

Mississippi has a hodge-podge of liquor laws as the 1966 law that repealed prohibition provided for local control over alcohol sales. According to PEER, Mississippi has 31 dry counties, with three additional counties that are partially dry. However, most of those counties have some have localities that have either wet municipalities or resort area status, allowing the legal sale of alcohol. 

Throughout Mississippi, there has been a strong move in that direction among dry counties as their numbers continue to dwindle. 

Proponents of the referendum in Simpson county submitted the necessary 1,500 certified voter signatures for the referendum this past August. Previous efforts had stalled due to lack of signatures. 

Dipa Bhattarai is suing the state so she can have the right to earn a living eyebrow threading without having to take hundreds of hours of irrelevant classes. She's not the only one having to jump through unreasonable hoops. Mississippi is one of the least economically free states according to an annual study by the Fraser Institute.

The Fraser Institute released its Economic Freedom of North America 2019 report Thursday and Mississippi was ranked 42nd with a score of 5.3 out of 10, ahead of only Kentucky, California, New Mexico, Oregon, Vermont, Alaska, West Virginia, and New York. 

The study measures economic freedom in terms of three categories: government spending, taxes, and regulations and uses data from 2017, the most recent year data was available for all jurisdictions. 

Mississippi ranked 44thin government spending, 36th in taxes and 40thin labor market freedom. 

According to data from the Bureau of Labor Statistics, 20.5 percent of those employed in the state in work for a division of government, be it federal, state or local. 

This figure outstrips manufacturing, retail, and food services.

The non-partisan Tax Foundation rated Mississippi 31stⁱn its annual Business Tax Climate Index, with the state having the 10thlowest corporate tax rate while having a mid-pack (27th) individual income tax rate. The state’s sales tax was 34th highest in the nation while the property tax rate was 37thworst.

According to the Mercatus Center at George Mason University, the state’s regulations contain 117,558 restrictions and 9.3 million words. It’d take an individual 518 hours (or about 13 weeks) to read the state’s administrative code. 

New Hampshire and Florida were the top two states in the Fraser Institutereport, which also uses the same metrics to measure economic freedom in states in Mexico and Canadian provinces.

Mississippi was ranked as one of the “Least Free” among the states by the Fraser Institute’s annual report, a place it has been all but two years since 1998. Mississippi’s 42nd ranking was the same as last year, when Mississippi scored a 5.2 out of 10. 

Mississippi’s neighbors are doing much better in the rankings, as Alabama was ranked 35th(5.8 total score out of 10), Arkansas 32nd (6.0), Louisiana was ranked 26th (6.3) and Tennessee was third in the study (7.6).

The study was authored by Southern Methodist University economist Dean Stansel; Caminos de la Libertad head of research Jose Torra and Fred McMahon, who is the resident fellow as the Dr. Michael A. Walker Chair in Economic Freedom at the Fraser Institute.

The Fraser Institute, a Canada-based free market group, has conducted the Economic Freedom of the Worldreport for the last 30 years. The primary conclusion of the reports was that “economic freedom is positively correlated with per-capita income, economic growth, greater life expectancy, lower child mortality, the development of democratic institutions, civil and political freedoms, and other desirable social and economic outcomes.”

In the most-free states and provinces in North America, the average per capita income in 2017 was 9.2 percent above the national average compared to 3.4 percent below the national average in the least-free jurisdictions.

The trend line for economic freedom in the U.S. isn’t positive, according to Fraser Instituteresearch. 

From 2003 to 2017, the average score for U.S. states in the all-government index fell from 8.23 to 7.92. 

New regulations went into effect today that will allow vegan and vegetarian companies to continue using meat product terms on their labels. 

In July, vegan food company Upton’s Naturals and the Plant Based Foods Association (PBFA) filed a First Amendment lawsuit challenging a Mississippi law that would have banned plant-based food companies from using meat product terms like “burger,” “bacon,” and “hot dog” on their packaging. Upton’s Naturals and PBFA were represented by the Institute for Justice and by the Mississippi Justice Institute serving as local counsel.

In August, the parties to the lawsuit advised the court that they were engaging in negotiations that might lead to the adoption of new regulations and the resolution of the case. Those negotiations ultimately led to the withdrawal of proposed regulations that would have implemented the ban, and the adoption of new regulations.

“These new regulations are a victory for free speech in Mississippi,” said Aaron Rice, Director of the Mississippi Justice Institute. “Consumers understand that products labeled with terms like ‘vegetarian burger’ are plant-based foods. Our clients can now continue using labels that are best understood by their customers without risking potential criminal prosecution.”

Under the new regulations, plant-based foods will not be considered to be labeled as a “meat” or “meat food product” if the label also includes “meat-free,” “meatless,” “plant-based,” “vegetarian,” “vegan,” or similar terms.

Because the new regulations adopted in response to the lawsuit will allow companies to continue using meat product terms on their labels, Upton’s Naturals and PBFA have dropped their lawsuit.

The new regulations can be found here. 

Mississippi food stamp work requirements have put program participants back in the workforce while reducing the number of residents dependent on government assistance.

A newly recently released report by the Foundation for Government Accountability says that work requirements have also saved taxpayers $93 million since Gov. Phil Bryant restored them in 2015 for able-bodied, childless adults who participated in the Supplemental Nutrition Assistance Program, which is also known as food stamps. 

Food stamp enrollment, according to the report, began to drop immediately in Mississippi and had fallen by 72 percent by October 2018. The drop isn’t unprecedented, as two states, Arkansas (70 percent reduction) and Florida (94 percent) posted similar numbers after instituting similar work requirements for SNAP.

Also, since 2016, the average amount of time spent in the SNAP program for able-bodied recipients in Mississippi has dropped by 60 percent.

The study shows that work requirements have decreased dependency on taxpayers by able-bodied, childless adults. According to data from the U.S. Department of Agriculture, 85 percent of these adults on food stamps weren’t working at all in Mississippi in 2015.

Those former SNAP recipients received jobs in 716 different industries and only 23 percent of them are still working in entry-level jobs such as fast food or retail. Their incomes grew by 64 percent within three months of leaving welfare. 

After a year, those incomes increased by 98 percent within a year and 121 percent for those who’d left the food stamp program 18 months before.

“Conservative policies are working, and Mississippi is continuing to reap the benefits of welfare reform,” Bryant said on Twitter. “After implementation of food stamp work requirements we have seen significant improvements.”

Bryant’s administration launched a study to track results of the work requirements, as the Mississippi Department of Human Services worked with the state Department of Employment Security, the National Strategic Planning and Analysis Research Center at Mississippi State University, and FGA to track wages and the industries entered by former welfare recipients.

Up until the mid-1990s, there had been little effort at the national level to end dependence on welfare.

In 1996, then-President Bill Clinton signed into law the Federal Welfare Reform Act. It transitioned a permanent entitlement program known as Aid to Families with Dependent Children to a temporary block grant program known as Temporary Aid to Needy Families or TANF. 

The new law also established work requirements for SNAP, which were later watered down as the federal government granted waivers for states to eliminate these rules for some segments of the population.

In 2015, Bryant restored the work requirements by ending the work requirement waiver. Those able-bodied childless adults who met the work requirements could stay on the program, but those who failed the meet the standard were terminated from the program starting in the first quarter of 2016.

More reforms for the state’s welfare system were still to come.

In 2017, Bryant signed into law House Bill 1090, also known as the Act to Restore Hope Opportunity and Prosperity for Everyone. Authored by state Rep. Chris Brown (R-Nettleton), the law required eligibility monitoring for Medicaid, TANF, and SNAP and required the state agencies to share eligibility data. It also enshrined the end of the state’s work requirement for SNAP into state law. 

It also mandates that state agencies administering welfare programs verify residency and immigration status and bans the use of the EBT cards at ATMs at liquor stores, strip clubs, casinos, and other questionable businesses.

In 2020, a West Virginia law will rescind the state’s ability to issue SNAP work requirement waivers. Wisconsin also passed a similar law.

Thirty states still have partial time limit waivers for the food stamp program, while Mississippi is one of 17 states that have no waivers.

Mississippi, like many other states, has a history of dolling out tax incentives to bring Hollywood film producers to the state. And, like many other states, the net return is generally an awful investment for taxpayers.

When lawmakers were engaged in an ultimately successful effort to revive dead film incentives this past session, the few opponents that could be found in the legislature would often cite a 2015 PEER report on the program in Mississippi. 

The report was mocked as being incomplete or inaccurate, or we were told of the other benefits that we couldn’t necessarily measure. Of course, proponents of film incentives didn't like what the program showed. 

The report from PEER shows taxpayers receive just 49 cents for every dollar invested in the program. That means that for every dollar the state gives to production companies, we see just 49 cents in return for the general fund.

Perhaps, this was a mistake. 

Maybe it was. Because, if anything, the PEER report was too favorable to Mississippi’s film incentive program. A 2017 study published by the Journal of Economic Geography by economists Mark F. Owens of Penn State University and Adam D. Rennhoff of Middle Tennessee State University looked at the impact of film incentives.

It found that Mississippi managed to return an abysmal 14 cents for every dollar of tax credit for film incentives. So, a third of what the PEER report found. 

But much like the PEER report, we again see that there are no instances where film incentives are actually a net positive for any state. It’s not that Mississippi is doing something uniquely wrong. It’s that film incentives are a bad deal for everyone. 

The question isn’t if we are losing money on film incentives, but how much. Because whether it’s 86 cents or “just” 51 cents, taxpayers should not be on the hook to subsidize Hollywood. 

Mississippi restaurant owners who would like to allow dogs on their outside patios are now allowed to do so. 

That is because of a Mississippi Department of Health rule change. 

“MSDH wants to support local businesses in their efforts to best accommodate their clientele. We’ve looked at other southern states – including Georgia, Tennessee and South Carolina – and have modeled our policy after theirs,” Jim Craig, MSDH Senior Deputy and Director of Health Protection, said in a news release that was reported by the Clarion Ledger. “We assessed the health risks and identified the types of outdoor dining settings that would present low, minimal or no risk to the public.” 

Earlier this year, the Clarion Ledger ran a story on pet-friendly restaurants in the Jackson metro area. The Mississippi Department of Health fired back saying that is illegal and that Mississippi code prohibits pets in restaurants, even outdoor areas.

MDH cited the Food and Drug Administration’s Food Code model, which is housed in the U.S. Department of Health and Human Services, for the prohibition. That model recommends prohibiting animals in food service establishments, save for service dogs. 

The state didn't have to follow the FDA model. Indeed, many states had already legalized dogs in restaurants before Mississippi. These laws generally do two things. They often allow local governments to enact ordinances if they would like and they allow restaurants to choose whether they would like to welcome dogs on their property. 

And with that, consumers can choose to bring their dog to a pet-friendly establishment, just as those who don’t like dogs can opt to go somewhere else. And the owner of the restaurant can decide what is better for his or her business. 

What path a restaurant chooses isn’t as important as the restaurant having the ability to choose. But the now repealed prohibition on dogs in restaurants is just one of the more than 117,000 restrictions in the state’s regulatory code.  

The biggest regulator in the state? As you would imagine, the same Department of Health that previously went after dogs in restaurants. 

And why does this matter?

Regulatory growth has a detrimental effect on economic growth. We now have a history of empirical data on the relationship between regulations and economic growth. A 2013 study in the Journal of Economic Growth estimates that federal regulations have slowed the U.S. growth rate by 2 percentage points a year, going back to 1949. A recent study by the Mercatus Center estimates that federal regulations have slowed growth by 0.8 percent since 1980. If we had imposed a cap on regulations in 1980, the economy would be $4 trillion larger, or about $13,000 per person. Real numbers, and real money, indeed. 

On the international side, researchers at the World Bank have estimated that countries with a lighter regulatory touch grow 2.3 percentage points faster than countries with the most burdensome regulations. And yet another study, this published by the Quarterly Journal of Economics, found that heavy regulation leads to more corruption, larger unofficial economies, and less competition, with no improvement in public or private goods. 

A prescription for lowering the regulatory burden on a state is the one-in-two-out rule, or a regulatory cap. In 2017, one of President Donald Trump’s first executive orders was to require at least two prior regulations to be identified for elimination for every new regulation issued. This is badly needed. We have gone from 400,000 federal regulations in 1970 to over 1.1 million today. 

Many years ago, British Columbia took on a similar mission. And in less than two decades, their regulatory requirements have decreased by 48 percent. The result has been an economic revival for the Canadian province. 

Whether it’s a sunset provision, where regulations expire and must be reauthorized after a period of time, or one-in-two-out policy, Mississippi should move in the direction toward a smaller regulatory state with more freedom. And if a regulation is truly important to our well-being, let the regulators prove why.

A decision by the state to allow dogs in restaurants is a positive step but it won’t change the trajectory of the state’s economy, for better or worse. Rather, we need a deep dive into the unnecessary and outdated regulations of each agency with a goal of removing unnecessary barriers and inhibitors to economic growth. 

Families who homeschool or send their children to private school provide a savings of more than $340 million to taxpayers. And that doesn’t even include local or federal savings, which likely doubles that number.

The state appropriated more than $2.58 billion for K-12 education this past year. This includes MAEP, general education programs, education enhancement funds, and a couple other programs. Last year, 470,000 students attended public schools, a number that will likely decrease when final enrollment numbers are released later this year.

That translates to an average of $5,500 per student, though those numbers vary. 

While we don’t have ‘official’ numbers on private school students or homeschoolers, estimates based on national data and Census numbers, generally put the numbers in the range of 40,000-50,000 students in private school and 15,000-20,000 who homeschool. 

Using the middle number for homeschool and private school students, those families save the state approximately $343 million. That number would be higher if we took into account local and federal funds, that make up a little less than half education funding in the state.

No tax credits or deductions

Nine programs in eight states allow families to receive individual tax credits and deductions for approved educational expenses, including private school tuition, books, supplies, computers, tutors, and transportation. Tax credits lower the total taxes a person owes; a deduction reduces a person’s total taxable income. 

The credits and deductions a family could receive differ among the states. Eligibility to participate also varies.

Source: EdChoice

Mississippi provides no credit or deduction for private or homeschool families.