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Mississippi Center for Public Policy recently added their name in support of the First Step Act.

The First Step Act will provide meaningful reform to our criminal justice system at the federal level, similar to what we have experienced in Mississippi. We know from a long history of being one of the nation’s top incarcerators that the blunt instrument of a long sentence does little to improve the conditions of our state’s communities.

The research shows that locking up low-level offenders does not produce better public safety outcomes than effective probation tools and workforce partnerships. We also know that time in prison breaks family bonds and makes it next to impossible for a person to hold down a job. That’s a bad outcome for all of us. Instead, we should be using what we know works to move people out of the system and toward productive, law-abiding lives.

Over the past three years, Mississippi has enacted a number of key reforms. During this time, the prison population has declined by more than 10 percent, driven by a reduction in prison use for non-violent offenses. At the same time, our state’s prisons are more focused on violent offenders, who now occupy 63 percent of prison beds, as opposed to 56 percent prior to reform. Today, the property crime rate has decreased by 5 percent, while violent crime has remained at a historic low.

Mississippi, like many other states, has seen the benefits of smart criminal justice reform policies. We are confident similar results can be found at the federal level.

Read the full letter to Senator Majority Leader Mitch McConnell (R-KY) here. 

Food truck regulations around the country continue to be challenged in court because they are indefensible from a legal perspective.

If Tupelo leaders continue to try to regulate these businesses in an effort to protect the brick and mortar restaurants, it is very likely the same scenario will play out in the city that gave us Elvis. The constitution specifically prohibits such economic protectionism. Our legal arm, the Mississippi Justice Institute, has already cautioned the City Council against such actions.

Rather than making the case by leveraging the consequences of a legal challenge, I would like to appeal to the leaders of Tupelo to consider the practical reasons why being on the side of economic liberty is the prudent choice. This is not a partisan issue. It is an issue of free enterprise, consumer choice, and the proper role of government in a system of capitalism.

It is not the role of government to protect any business, brick and mortar or otherwise, from competition. The free enterprise system operates correctly when consumer choice, not political blessing, is the basis of choosing the winners and losers.

From a practical standpoint, it is also a mistake to thwart a powerful economic trend like food trucks. These businesses are examples of entrepreneurs responding to market signals. In so doing, they are contributing to the local economy by serving a customer niche. Brick and mortar restaurant entrepreneurs can do the same, and many have. All of these entrepreneurs, new and old, are creating unique options and that work to build a more diverse and appealing food marketplace in Tupelo. In turn, this attracts more consumers to the downtown – creating a bigger, healthier and more prosperous local economy.

In a properly functioning economy in America, the success of a food company should be based on how good the food and service is; not on how well connected it is to the political class. In a system of capitalism, competitors respond to consumer trends with innovations and improved offerings, not by seeking government help to build a moat around their businesses. We should be encouraging entrepreneurs and risk-takers, not creating hurdles out of a misplaced sense of obligation to protect existing businesses.

In many ways, the food truck controversy is similar to those disputes we’ve seen around the country where local governments are determining how to regulate Airbnb and Uber. Rather than government looking to create new and restrictive regulations for these emerging businesses, they should be thinking about how to reduce the existing regulatory burdens on brick and mortar restaurants and hotels. The local economy would be the beneficiary of such actions and no one would argue against a policy that spurs economic growth – especially not in a state where we have struggled to experience sustainable growth in our private sector.

On behalf of customers, competition, and consumer choice, I hope this appeal to the political leaders of Tupelo does not land on deaf ears. Cites across the country are realizing these kinds of cases are very hard to defend. However, the City Council should not vote to keep the regulatory burden for food trucks low out of a fear of the legal consequences; they should do it because it’s in the best economic interests of Tupelo.

This column appeared in the Daily Journal on October 28, 2018. 

The city of Tupelo appears to have backed away from controversial regulations that would have prohibited food trucks from most high-traffic areas in the city.

But some city leaders continue their push for protections for brick-and-mortar restaurants at the expense of food truck operators.

During Monday’s work session, the city released the proposed regulations. According to the Daily Journal, this includes additional licensure and some limitations on parking but lacks the restrictions on setting up on Main and Gloster Streets, the two most prominent retails areas in the city, as originally discussed.

“We have not been protectionist and made any distance requirements between competing business,” Ben Logan, city attorney said.

Mayor Jason Shelton, a Democrat, added, “I want to be pro-business,” Shelton said. “I don’t think we need more restrictions on businesses. I think we need to look at restrictions to take away.”

New regulations have been in the works for some time now, with support for restrictions from both Democrats and Republicans.

Earlier this year, Councilman Willie Jennings said, in proposing the regulations, “I just want to make sure the established businesses are protected.” Another councilman, Markel Whittington, said brick-and-mortar restaurants have requested food truck regulations. While he didn’t feel food trucks posed a ‘threat’ to those restaurants, he believed it was appropriate for government to act ‘on behalf of select business interests.’

“I think we have to protect some of our taxpayers and high employers,” he said.

And even yesterday, Councilman Mike Bryan lobbied for brick-and-mortar restaurant protections, such as a ban on major roads. Another councilman, Buddy Palmer, also indicated his support for a ban.

“I feel like it is not fair to brick-and-mortar businesses to allow food trucks to park in front of their business,” Bryan said.

“I will always be pro-downtown businesses over food trucks,” Palmer said. “I am for brick-and-mortar businesses much more than I am for food trucks.”

When Tupelo leaders began discussing food truck regulations, Mississippi Justice Institute, the legal arm of Mississippi Center for Public Policy, sent a letter to the city warning of litigation if these regulations passed.

“The very regulation Tupelo is discussing—a regulation about how close a food truck should be to a restaurant—was found to be unenforceable just this past December in Baltimore. Food truck regulations around the country have been challenged over and over in court, from Louisville, to San Antonio, to Chicago, and many places in between. Cities ultimately realize that these kinds of cases are very hard to defend,” the letter said.

More recently, the city of Carolina Beach, North Carolina repealed its prohibition on out-of-town food trucks from serving the city after a lawsuit was filed by the Institute of Justice. Under the law that has since been scrapped, only brick-and-mortar restaurants that have been in business for more than one year could run a food truck.

“It is a shame that it took a lawsuit to convince the town to repeal such an obviously unconstitutional law,” Justin Pearson, senior attorney at IJ said. “I’m hopeful that this vote will signal the end to the town’s attempt to use the power of government to favor a handful of established businesses over the region’s entrepreneurs.”

Mississippi regulators are preventing small poultry producers from operating a sustainable business by severely restricting the sale of safe and healthy poultry products.

The consequence is more limited access to diverse food options for families, students, hospital patients, restaurateurs and chefs.

More specifically, Mississippi Department of Agriculture (MDAC) regulations prohibit all but direct farm-to-consumer sales by small-scale poultry producers. This is contrary to Mississippi law, which has adopted a federal exemption that allows small producers to sell to grocery stores, restaurants, hotels, hospitals and other institutions.

In conformity with federal law, Mississippi law technically incorporates the federal 20,000 bird exemption, which allows poultry producers who raise fewer than 20,000 birds a calendar year to sell these birds without being subject to daily inspection and other facility requirements. MDAC regulations, however, do not recognize this mandated exemption in any meaningful way.[1]

This means that Mississippi is forcing small poultry producers to follow federal requirements that were drafted with large-scale producers in mind. These requirements are onerous and expensive and address the unique problems created by large-scale poultry production.[2] It is not appropriate to subject small producers to these requirements, which is why federal law has always allowed for a small producer (20,000 bird) exemption. Unlike other states that recognize the federal 20,000 bird exemption, Mississippi prohibits all but direct farm-to-consumer sales for small farmers. This completely undermines the purpose of the exemption. Mississippi agricultural regulations ban small producers from selling to restaurants, grocery stores, hotels, schools and hospitals. As a result, small poultry producers are denied access to distribution channels currently open to large producers.

What is the solution?

State law should clearly define what a small-scale producer is (consistent with the federal definition of a 20,000 bird producer) and clarify that these producers are not subject to the same inspection requirements that large producers operate under. In particular, state law should clarify that small producers are not subject to mandatory daily inspection and other facility requirements. State law should also clarify that small producers may sell to restaurants, grocery stores, hotels, schools and hospitals. Alternatively, MDAC could issue new rules that actually conform to the federal 20,000 bird exemption and thus rectify the current contradiction between state law and agency regulatory practice.

More than 40 states have adopted the 20,000 bird federal exemption. Granted, not all of these states are actually implementing the full range of federal exemptions. In neighboring Alabama, for instance, farmers with the exemption may only sell in farmer’s markets, as well as direct from the farm. Louisiana, on the other hand, has fully implemented the 20,000 bird exemption and allows sales to retail outlets, restaurants and various institutions. Louisiana has also adopted the federal small enterprise exemption pertaining to the processing of dressed exempt poultry (see table below).

North Carolina stands out as one of the states with the best and clearest regulatory guidance. Their policy allows for the slaughter, processing and distribution of poultry without mandatory daily inspection. The regulations also spell out requirements aimed at protecting consumer health and safety. These include: sanitary standards and practices, detailed recordkeeping, and mandatory labelling that identifies the processor and provides for safe handling instructions. These requirements essentially follow federal law.

A win for small farmers and economic growth

North Carolina’s deregulation of small poultry producers has been a win-win for both small and large producers. The market for each of these products is different. For many consumers seeking farm-fresh chicken, the choice is not between purchasing small-scale or large-scale produced products. The choice is between purchasing small-scale produced chicken or no chicken at all.

North Carolina’s example is illustrative. While the state has more than 1,000 small-scale producers, Sanderson Farms recently opened a plant with the capacity to slaughter and process 1.25 million birds a week. Consider that Sanderson Farms’ stock has increased many times over, going from roughly $6 a share in 2000 to $100 a share today. Clearly, their business model can accommodate small-scale producers selling to a different customer base. In addition, it is often said that small businesses are a key economic driver. Small farms are small businesses. Freeing small farmers and entrepreneurs from onerous regulations that 40 other states do not have will help Mississippi’s economy grow.

Federal Poultry Exemptions

Table taken from eXtension Foundation as adapted from USDA FSIS guidebook.

[1]Cf. definition of “retail food establishment” at § 69-1-18: “‘Retail food establishment’ means any establishment where food and food products are offered for sale to the ultimate consumer and intended for off-premise consumption.” Under this section, MDAC rules at 100.04 require “all poultry products offered for sale at a retail food establishment” to be slaughtered and processed according to state/federal guidelines. Thus, “no retail food establishment’ may sell poultry provided by a farmer actually operating under the 20,000 bird exemption. Cf. http://www.sos.ms.gov/ACCode/00000093c.pdf

[2]In the late 1960s, under the Johnson administration, the federal government forced states to follow federal inspection guidelines, even for products not entering interstate commerce – that is, products produced and sold only within the boundaries of a single state. The “Meat Act” included various “personal use” exemptions for custom slaughterhouses. The “Poultry Act” also allowed for conditional exemptions for small producers and businesses – i.e., the 1,000 and 20,000 bird exemptions. Exempt operators are NOT exempt from all federal requirements. They are exempt from continuous bird-by-bird inspection, and accordingly, the daily presence of a federal inspector. In other words, the 1,000 and 20,000 bird allowances exempt the processor from mandatory inspection. Federal law also permits a small enterprise exemption that allows a restauranteur, for instance, to purchase live chickens and then slaughter, dress and sell them to customers. It is unclear whether Mississippi allows this practice. For more information from FSIS, see the PowerPoint presentation by Robert Ragland, “Poultry Exemptions Under the Federal Poultry Products Inspection Act.”

As the sharing economy expands, consumers win thanks to greater options and lower prices.

It is the free market working as it should. An individual has a service they can offer, they sell it on the market via a mobile app, and they are rated on their performance by the user. Other users can then make decisions based upon whether previous users had a great experience, a poor experience, or something in the middle. It is the definition of accountability, and doesn’t require government involvement.

But, of course, government must involve themselves. Solely in the name of consumer safety, because you or I apparently cannot make a decision without the government’s blessing.

However, we know those decisions are usually centered around the government’s interest in protecting the established monopiles. Those monopolies have already asked for and received the blessing of the government and feel it is their task to protect the moat around whatever industry they are in.

We saw this with the ridesharing economy a few years ago. As Uber and Lyft entered the mainstream, some localities in Mississippi took it upon themselves to ban ridesharing companies if they didn’t operate in the same fashion as the taxi monopolies. That included cities such as Jackson, Gulfport, Biloxi, and Oxford. In Oxford, law enforcement even threatened to arrest Uber drivers for running an unlicensed taxi service. After all, the city council in Oxford had adopted new ordinances after meeting with taxi drivers and owners.

Fortunately, the state acted and passed statewide regulations for transportation network companies in 2016, overriding local regulations that stifled the ridesharing economy. A year later Uber announced that they will be available statewide. And even without doing research, we can presume students at Ole Miss enjoy having Uber available.

Carsharing is another form of how individuals can make money from their car in the sharing economy. With carsharing apps, such as Zipcar, Turo, and Getaround, consumers can rent a car from an individual for a short time period as you currently do with traditional rental car companies like Enterprise and Hertz. Naturally, said car rental companies are fighting the carsharing industry.

Airbnb has had a similar experience with government regulators. Just this summer, a Biloxi city councilman, who also happens to be the president of the Mississippi Hotel and Lodging Association, announced his intentions to increase regulations and enforcement on Airbnb rentals in the Coastal city. The Mississippi Hotel and Lodging Association is the state arm of the national association that has been pushing for homesharing regulations throughout the country.

The sharing economy should be celebrated and encouraged, but all it does is provide options.

An Uber ride is not automatically better than a ride in a traditional taxi simply because it’s an Uber ride. Nor is a house or room rented on Airbnb automatically better than a stay in a traditional hotel. If enough users have a poor experience, no one will continue to use that service provider. There is a great incentive in providing high quality services. After all, people vote with their feet.

But having these options available allows the consumer to make better, or more complete, choices. They can decide what they use based on what they need at that moment in time. And price is usually a central part of that decision.

The reactions from “traditional” companies is to be expected. They worked hard in pursuing regulations that limit competition. But when new players enter their arena, they then often complain about the unlevel playing field.

That would be less ironic if they didn’t create that playing field. But their reaction is understandable. However, the answer isn’t to impose outdated regulations on the new economy, but to deregulate existing industries. And for government to rely on the free market and trust their citizens to be able to make the best decisions for themselves.

This column appeared in the Meridian Star on October 12, 2018. 

The Mississippi Bureau of Narcotics has begun to return property that the agency seized after the administrative forfeiture law was repealed.

This past session, the Mississippi legislature allowed the administrative forfeiture provision to sunset, meaning the previous law ceased to be in effect at the end of June. Administrative forfeiture allows agents of the state to take property valued under $20,000 and forfeit it by merely providing the individual with a notice. An individual would then have to file a petition in court to appeal.

On September 19, 2018, MBN sent notices allowing retrieval of seized property, totaling more than $100,000, to eight individuals. This includes:

On September 10, the Mississippi Justice Institute sent a letter to MBN advising the agency of the change in the law after it became apparent that they were continuing to seize property after the July 1 repeal date.

“We are glad to see that the Mississippi Bureau of Narcotics is not only following the law, but is taking corrective action in cases where administrative forfeiture procedures were incorrectly used,” said Aaron Rice, Director of the Mississippi Justice Institute. “As a public interest law firm dedicated to ensuring that our laws are carried out in a way that protects liberty and honors constitutional rights, we are happy to have been able to assist MBN in carrying out its duties while remaining in compliance with new changes in Mississippi law.”

Until 2017, Mississippi was the wild west of sorts when it came to civil asset forfeiture. In 2015, the Mississippi Bureau of Narcotics, along with local police departments, seized nearly $4 million in cash.

They seized amounts as low as $75. They seized trucks, cars, ATVs, riding lawnmowers, utility trailers, and 18-wheelers; an arsenal of assorted handguns, shotguns, and rifles; cell phones, cameras, laptops, tablets, turntables, and flat screen TVs; boat motors, weed eaters, and power drills; and one comic book collection, according to a report from Reason.

And that does not include numbers from police departments that work independently of the Bureau of Narcotics. Until 2017, they didn’t track or publish asset forfeiture data.

Moreover, family members, especially parents, often had their cars or other property seized for the alleged crimes of their children. This happened even though the parents are not connected to the illegal activity. For example, in 2015, the Desoto County Sheriff’s Department agreed to return a 2006 Chevy Trailblazer owned by the mother of the petitioner, Jesse Smith, in exchange for $1,650.

In 2017, the legislature provided needed reforms. Now, seizing agencies must obtain a search warrant issued by a judge within 72 hours of seizing property. And all forfeitures are posted on a publicly accessible website.

Revenue from the first month of sports betting in Mississippi indicates a positive start for the Magnolia State.

In 2017, the legislature paved the way for sports betting should the Supreme Court overturn the restrictions on such activities, which they did this year. That allowed Mississippi to be one of the first states outside of Nevada to offer sports betting.

Through the month of August, an otherwise quiet month of the year before football season begins, casinos took in nearly $6.3 million in sports betting. This translates to more than $644,000 in revenue for casinos and $77,000 in taxes for the state.

 

Two other important points show greater promise.

First, just 11 of the state’s 28 casinos participated in the opening month of sports betting, with many opening in the middle or end of the month.

Additionally, Mississippi casinos took in nearly $3.5 million in just the first three days of September, more than half of the handle from August. The difference? The start of college football and the NFL.

Most expect these numbers to only climb in the weeks ahead.

Men make more money than woman for numerous reasons. But it is not because of discrimination.

June O’Neill, an economics professor and former Congressional Budget Office director, has researched this issue and concluded that: “The gender gap largely stems from choices made by women and men concerning the amount of time and energy devoted to a career, as reflected in years of work experience, utilization of part-time work, and other workplace and job characteristics.”

Familial roles – such as who stays home with the kids when they are sick – tend to play a larger role in determining wages than does gender. As a result of such roles – most kids want mom to be the one to stay home – women often earn less than men. But in today’s labor market, gender discrimination is not the reason why.

Consider that:

Indeed, a recent Bureau of Labor Statistics (BLS) report finds that “women working 35-39 hours per week last year earned 107% of men’s earnings for those weekly hours, i.e., there was a 7% gender earnings gap in favor of female workers.”

As the gender pay gap is being debunked nationwide, some in Mississippi are clamoring for a state law to address an issue that is no longer an issue.

But Mississippi, like every other state, must abide by federal wage and hour laws. These laws, among other things, prohibit discrimination based on gender. An employer in Mississippi cannot discriminate against women just because we don’t have a state law prohibiting it.

When controlling for hours worked and lifestyle choices, such as marriage, we get a clearer picture of earnings by gender.

Men work more hours than women

A review of data from the Bureau of Labor Statistics shows:

Marital status also affects the earnings of women, as does many other factors.

As we see, being married has a negative impact on the earnings of women. But one could also presume that that is a personal choice, and women may place greater value on flexibility, commute time, child care, and other factors important to those with children at home.

In the end, there is no gender wage gap when we compare apples to apples: doing exactly the same work while working the exact same number of hours in the same occupation.

Incomes in America rose to a new high in 2017 despite the constant talking points that the economy is only working for a few.

According to the latest data from the Census Bureau, American households have made their way solidly out of the recession and incomes continue to rise. And the report includes other significant data: Income inequality is more of a talking point than a reality and middle-income earners are actually moving up the economic ladder, not down. All while, the price of consumer goods continues to go down.

Median household income

Median household income last year was $61,372, an increase of 1.8 percent from the previous year in today’s dollars. This is the fifth consecutive annual increase after a half-decade of declines following the Great Recession. The last period of four consecutive gains was in the late 1990s.

Compared to 1975, annual incomes per household member, again in today’s dollars, are up more than $12,000. That means each America has an additional $1,000 in additional income per month than they did forty years ago.

Income inequality

One of the most common refrains we hear in politics today is about the rising income gap. It has spurred a new belief in socialism, and propelled the candidacy of Democratic-Socialist Bernie Sanders in 2016. Other have since followed in his footsteps.

President Barack Obama once called it the “defining challenge of our time.”

Two data points show that the shares of total income earned by the top 20 percent and the top 5 percent are relatively static. Meaning, the rich aren’t getting richer at the expense of everyone else. Over the past two decades, the income shares of the top 20 percent and the top 5 percent have remained stable at 49-51 percent and 21-22 percent, respectively.

As the chart shows, these percentages are relatively static during this time.

The middle class

Another common refrain is the disappearing middle class. After all, in 1967 53.8 percent of the population was considered middle income, those who make between $35,000-$100,000 (in today’s dollars). But the middle class is getting smaller because they are moving up to higher income groups. That is a good thing.

The size of high-income earners, those who make $100,000 or more is 29.2 percent. Forty years ago, only 9 percent fit in this category. That represents a growth of high earners of 224 percent. Meanwhile the share of low-income earners, those who make $35,000 or less, has fallen from 37.2 percent in 1967 to 29.5 percent today. A decrease of 20 percent.

Price of consumer goods

Usually involved in this discussion is the fact that everything seems much more expensive than it was a few decades ago. A lot of this is nostalgia, but there are some items that are indeed more expensive, significantly more so in many cases. That primarily includes healthcare and higher education, two sectors of the economy that are heavily regulated and influenced by the government.

Housing, which is often negatively impacted (in terms of cost to the consumer) by local government regulations, has largely kept pace with inflation.

But most every day consumer goods, everything from cars and home furnishings to appliances and clothing, have become more affordable. What do these goods have in common? They are controlled by the free market, not the government.

For some, they may be struggling. They may not have bounced back from the recession or perhaps life choices put them in a less-than-desirable situation. But we know, when we move past the talking points and political campaigns, Americans have never been doing better. The middle class isn’t shrinking. It’s getting wealthier. Incomes are not growing apart. And every day purchases aren’t getting more expensive.

Thanks to capitalism and the free market.

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