Tax cuts are attracting voters in the US. But big government conservatives alienate the anxious electorate elsewhere

It all seemed so different a year ago. Arriving in the United States in early 2021, I assumed that there was much for US conservatives to learn from their British cousins. Boris Johnson had just gained an almighty majority – the largest since Margaret Thatcher’s days – winning in places that had not voted Conservative since before the Second World War.

American conservatism, by contrast, appeared in poor health. Donald Trump had lost the White House in November 2020. States that only a decade earlier had leaned solidly towards the Republicans had suddenly become competitive – and the Republicans seemed determined to lose those competitions. On January 5, 2021, they compounded their defeat in the presidential race with a disastrous special election campaign in Georgia. What should have been a shoo-in ended with them losing control of the United States Senate. Things got even worse the next day. A mob, stirred up by conservative commentators who should have known better, stormed the Capitol. In those grim moments, it looked as if the party of Ronald Reagan was in terminal decline.

Fast-forward to today, and there is still a striking difference between these movements – but with the roles dramatically reversed. As President Biden continues to underwhelm, the Republicans anticipate big gains in the midterms next year. They are ahead in key states such as Virginia – and, indeed, won a hat-trick of statewide contests there only a few months ago, in a state that many assumed had shifted irretrievably leftwards. They are polling remarkably well among middle-class Asian and Hispanic Americans.

In Britain, by contrast, a recent YouGov survey suggests that Boris Johnson’s winning formula is failing, with support plummeting in almost every demographic group. The decline is especially ominous in blue-collar Britain, whose support allowed the Conservatives to win a swathe of formerly Labour seats. After 12 years in office, the Tories have raised taxes to their highest point since the 1950s. Since the last election, median household incomes have fallen, and a cost-of-living crisis is on its way.

Boris may have delivered Brexit and the vaccine rollout, and supported Ukraine brilliantly, but I doubt mentioning that will do the Tories much good. In electoral terms, the vaccine is ancient history. Brexit might have been a wedge issue at the last election; today it conjures up a vague feeling that more might have been done to capitalize on the opportunities.

“Surely,” you might say, “it’s all a question of incumbency.” Aren’t British conservatives simply tanking because, like Biden, they happen to coincide with a cost-of-living crisis while in office? Yet if the Tories are floundering for the same reasons as Biden’s Democrats, it does rather raise the question of why they should be governing as leftists in the first place.

In both countries, inflation is rising rapidly because governments have hosed money and achieved very little growth to show for it. Biden has thrown an additional $2 trillion into public spending since coming to office. Yet while Rishi Sunak has spent such eye-watering sums you might be forgiven for thinking that Corbyn had won the last election, in America, Republican-run states have responded to the cost-of-living crisis by cutting taxes. My own state of Mississippi just passed the largest tax cut in the state’s history. If only British ministers were as receptive to free-market thinking.

US energy costs are soaring in part because the federal government canceled pipelines and discouraged investment in oil and gas. Yet Britain’s Conservatives have somehow gone even further: outlawing fracking and regulating the energy market as you might expect to see in a socialist state. Though leadership feels ever-more dysfunctional in both countries, US conservatives are brilliantly tapping into public anger by devolving power away from the state. Meanwhile, in the UK, the Johnson administration has become a byword for big government.

This weekend, as the 2022 session is wrapping up, the Mississippi Senate Rules committee made the unusual move of passing a suspension resolution (SCR 588) to bring a failed bill back to life. The bill is SB 2033, sponsored by three Republicans and eleven Democrats. The bill seeks to expand Medicaid to able-bodied women for up to a year after either an abortion or the birth of a child.

While some have framed the proposal as a way to help pregnant women, there is little evidence such a proposal would actually help women.  Under SB 2033, Medicaid coverage for women would be covered for 12 months instead of the current 2 months required by federal law. This proposal has been sold as a “pro-life” bill because it expands taxpayer-subsidized insurance to women. This logic is deeply flawed, and, frankly, insulting to the pro-life movement. In addition, there is little evidence that this bill will reduce either maternal mortality or infant mortality in Mississippi.

Expanding Postpartum Medicaid Coverage is Not Pro-life

Expanding Medicaid to able-bodied adults is not pro-life. There are several reasons for this.

In the first place, it is important to note that Mississippi Medicaid actually covers abortion in limited, but morally questionable, cases. Federal law requires Mississippi Medicaid to pay for abortions in cases of rape and incest. In addition, Mississippi has opted to allow for Medicaid coverage of abortions in cases of "fetal impairment," which could include chromosomal abnormalities such as Down syndrome. This policy potentially conflicts with the state's Life Equality Act passed in 2020, which explicitly prohibits abortions on the basis of a genetic abnormality.

Therefore, any expansion of Medicaid in the state to women of child-bearing age must be understood as an expansion of state-funded abortion within these parameters. This is especially true for the current proposal to expand postpartum Medicaid, which of course exclusively applies to women of child-bearing age.

Furthermore, postpartum Medicaid expansion creates the potential for a perverse incentive that could ultimately lead to women having more frequent abortions.

Under federal law (42 C.F.R. § 440.210(a)(2)(i)-(ii)), postpartum Medicaid coverage applies as follows:

"For women who, while pregnant, applied for, were eligible for, and received Medicaid services under the plan, all services under the plan that are pregnancy-related for an extended postpartum period. The postpartum period begins on the last day of pregnancy and extends through the end of the month in which the 60-day period following termination of pregnancy ends."

On the surface, it might seem that postpartum coverage applies to women who carry their baby to birth, but federal law defines the period as beginning “following termination.” That seems to include abortion and involuntary miscarriage.

If a woman ends a pregnancy through abortion, she would theoretically be eligible for postpartum Medicaid for 12 months after she ended the pregnancy, just in the same way as a woman who had naturally miscarried or carried her baby to full term.

Theoretically, this means that a woman could have an abortion every 12 months and stay on Medicaid indefinitely. This is all the more possible insofar as SB 2033 does not require any ongoing eligibility checks.

More problematic is that Medicaid is a major source of funding for Planned Parenthood. According to the Charlotte Lozier Institute, government funding for Planned Parenthood, including Medicaid, is almost $1.7 million per day.

The Hattiesburg Planned Parenthood accepts Medicaid. Included among the services they offer are “abortion referrals,” “the morning-after pill” and “LGBTQ services.”

Mississippi also covers “family planning” for one year after a pregnant woman enrolls in Medicaid. This family planning waiver is incredibly generous in terms of the categories covered: women and men earning up to 194 percent of the federal poverty level ($55,236 for a family of four) and including individuals aged 13 to 44. It is presumed that Planned Parenthood is a major provider of services under this waiver in Mississippi.

Expanding Medicaid postpartum from 2 months to 12 months, however, will benefit Planned Parenthood even more, as women who have just had a baby are more likely to use contraception to space out childbirth. Indeed, the average time between births in the United States is about 26 months. Expanding postpartum coverage to 12 months, at a minimum, allows women who are not eligible for family planning services to access these services – again, to the benefit of providers like Planned Parenthood.

Medicaid Already Covers Parents and Caretakers of Children

The most misleading aspect of this attempt to expand Medicaid to able-bodied adults is the failure to disclose that Medicaid already covers the parents of children on Medicaid!

According to the Mississippi Division of Medicaid:

"Parents or caretakers must have children under age 18 living in the home, who are deprived of the support of one or both parents due to the disability of a parent, the death or continued absence of a parent or have parent(s) who are unemployed or have very low income."

This means that parents who are unemployed, single or who have very low income are already eligible for Medicaid. Who, then, does this Medicaid expansion cover?

• Women who are NOT single parents.
• Women who are NOT unemployed.
• Women who are older than age 18.
• Women who earn less than $55,236 for a family of four.

This hardly sounds like the vulnerable population Mississippi taxpayers are being led to think will benefit from this Medicaid expansion.

In addition, it’s worth pointing out that while the federal government covers about 85 percent of the costs of Medicaid coverage, women that enroll on the Obamacare exchange are covered at 100 percent. And, under the Biden administration, eligibility categories for Obamacare have increased expansively.

An additional concern is that every expansion of Medicaid actually increases costs for those on private insurance. Thus, while expanding Medicaid to 12 months for postpartum women might seem like an idea that would lower healthcare costs, it actually has the potential to increase costs for everyone else.

Maternal and Infant Mortality Claims Need Further Study

Many of the arguments for postpartum Medicaid expansion are based upon claims that Mississippi has among the highest rates of postpartum mortality. Some have claimed that the reason for these statistics simply must be a lack of government health care.

Many of the advocates for postpartum Medicaid expansion have referenced a report produced by the Maternal Mortality Review Committee, claiming that the report demonstrates the need for postpartum Medicaid expansion. These committees are funded by grants from the Centers for Disease Control and, predictably, always arrive at the same conclusion: expand Medicaid.

The claims that are being drawn from the Mississippi report require additional study, to say the least.  

A careful reading of the data in the report reveals that many of the deaths listed in the report have little or nothing to do with pregnancy. For example, there are a total of 136 deaths listed in the report from 2013 to 2016. Many of these deaths were unrelated to pregnancy and largely unpreventable from a health insurance perspective. This includes motor vehicle accidents (24 percent), homicide (7 percent), fire (3 percent), and other causes that had little to do with pregnancy.

Even more to the point, Mississippi’s report acknowledges the following:

"The majority of maternal deaths occurred in the postpartum period including 37% occurring after 6 weeks and involve women insured by state Medicaid (p. 23)."

In other words, the majority of maternal deaths involved women ALREADY on Medicaid. It is beyond dispute that Medicaid health outcomes are not very good – in fact, worse than the uninsured, who tend to pay cash for healthcare (see, for instance, J. Taylor: “Medicaid: A Government Monopoly that Hurts the Poor” (2018)). But if even the Maternal Mortality Review Committee is acknowledging that the majority of maternal deaths involve women on Medicaid, it seems obvious that expanding Medicaid to postpartum women is a bad idea. Indeed, it may be Medicaid that is the problem.

A key free-market principle is that economic freedom and consumer choice should be the basis for economic policies. Mississippi’s House Bill 833 is a bill that goes against these principles by creating a regulation that vehicle manufacturers must use a third-party franchise dealership to sell their cars. The bill recently passed the House and has been referred to the Senate finance committee.  

In the wake of innovative technologies, innovative business models have emerged with them. The car industry is no exception. As electric cars are being developed, manufacturers have sought alternative ways to lower costs for consumers. One way that manufacturers accomplish this is by selling their vehicles directly to consumers instead of using the traditional dealership franchise model.

Why has the government gotten involved in auto dealerships in the first place? To better understand the root of this debate, it is helpful to consider the historical background. Instead of selling their cars directly to consumers, manufacturers have historically sold their cars through third-party franchises.

 By the middle of the 20^th century, the car market had consolidated to only a few manufacturers. Since there were only a few manufacturers, dealers were concerned that manufacturers would leverage their market dominance as a way to force dealers into one-sided franchise contracts. To push back against this, the dealers successfully lobbied for franchise laws that set minimum standards for the contracts between manufacturers and dealers.

Under current law, a car manufacturing subsidiary is not prohibited from obtaining a license to operate a dealership. Some have argued that this violates the franchise laws that govern agreements between manufacturers and franchisees.

However, the original purpose of the franchise laws was to regulate contracts between manufacturers and actual third-party dealers, not to require that all car manufacturers use the franchise model. Suppose a company does not use the franchise model. In that case, it should not be pushed out of the market by laws that are intended for franchise contract regulation.

Should the government decide that because cars have historically been purchased through franchises, that this must be the case indefinitely? Ultimately, the issue boils down to consumer choice. If a consumer decides that they do not want to have a dealership involved in their vehicle purchase, government policy should not force them to.

Some consumers may prefer the dealer franchise experience over purchasing a vehicle straight from the manufacturer. Yet, it is anti-free market policy for the government to force all citizens everywhere in the state to only purchase a vehicle exclusively from franchisees.

Comparable to the issue of mandating car dealership franchises is a consideration of other goods in the market. For instance, imagine if Mississippi required all restaurant chains to operate as a franchise. Chick-Fil-A, Subway, and other franchise restaurants chains would still be options on the table for consumers. Meanwhile, Mississippians could not enjoy a meal from Cracker Barrel, Chipotle, Panda Express, or other non-franchise restaurants.

Thankfully government overreach has not gone that far yet, but House Bill 833 would impose such a rule on car choices. Mississippians could take the car by the drive-through at as many non-franchise restaurants as they pleased. But buy that new electric car from a non-franchise dealer? No indeed not.

Personal preferences and choices are the lifeblood of a free economy, not a system where individuals are forced to comply with heavy-handed government regulations. House Bill 833 is bad for consumers, the free market, and the state of Mississippi. Free people should have the ability to make free choices without a nanny state forcing them to buy certain items in their state through a third party.

Bottom line

Over the last ten years, Mississippi has made great progress in enhancing welfare program integrity. A critical part of that effort was requiring the state to switch from ‘simplified reporting’ to ‘change reporting’ in food stamps. Undoing that reform will move Mississippi backwards and cost the truly needy.

How it works: simplified reporting vs. change reporting

Under federal law, states have discretion in determining how households receiving food stamps must report changes in income.[i] More specifically, states can decide which households are subject to simplified reporting and which are subject to change reporting.

When states assign households to simplified reporting, they are only required to report changes which make the household ineligible. In other words, households are only required to report changes in income that put the household’s income at higher than 130 percent of the federal poverty level.[ii]

Even if every household on food stamps had a perfectly clear understanding of what exactly is 130 percent of the federal poverty level in any given year, this approach is essentially an honor system. It relies on individuals voluntarily disenrolling themselves from public assistance. The disincentives and ripeness for waste and fraud under this system should be obvious.

On the other hand, when states assign households to change reporting, households are required to report all changes in income greater than $100 within ten days so that the department can reassess eligibility.[iii] The eligible will continue to receive benefits and the ineligible will be removed.

States may subject some types of households to simplified reporting and others to change reporting or use one reporting system across all households. Mississippi is among over twenty states that assign at least some households to change reporting.[iv]

Behind the scenes

In terms of practical effect, change reporting is much more effective in identifying waste and fraud. That means it has major benefits for the taxpayers who fund the program and for those who want to see people move from welfare to work. But that increased identification can lead to superficial increases in reported payment errors. With proper anti-fraud measures, these increases should be temporary.

Simplified reporting, on the other hand, has two major benefits for bureaucracies. First, waste that is never discovered cannot be reported or punished. If simplified reporting does result in fewer “errors,” it does so only because it waives the requirement that the state try to eliminate errors by requiring accurate reporting---not because it operates more efficiently. Second, because simplified reporting identifies fewer ineligible enrollees to be removed, the reporting system increases enrollment while decreasing effort on the agency’s part.

These are bureaucratic benefits—not the priorities of the taxpayers or the truly needy who are actually eligible for benefits and rely on the integrity of these programs. 

Mississippi’s forward progress

In 2017, Mississippi took a big step forward in protecting the integrity of its welfare programs. The legislature passed the Medicaid and Human Services Transparency and Fraud Prevention Act.[v] One of that bill’s most significant accomplishments was the requirement that the state’s Department of Human Services implement change reporting across food stamps.[vi]

Mississippi is certainly not alone. In switching to change reporting, Mississippi is among over twenty other states which use change reporting in their eligibility systems, including Arkansas and Tennessee.[vii]  

The Department of Human Services has voiced concern. To its credit, the department has not hidden its motivations. In the two years since implementation of change reporting, improper payment rates have increased. The department worries that these higher rates will lead to administrative penalties from the Biden administration. But an increase in the discovery of improper payments is not a flaw of change reporting. It is one of its principal aims.

Understandably, the department does not want to be punished for the failure of its enrollees to report changes. But, put simply, the department has identified more enrollees breaking the rules and receiving benefits for which they are not eligible. Its response—asking to change the rules—is not the solution.

Switching back to simplified reporting to reduce the improper payment rate will do nothing to actually reduce improper payments.

This is a bureaucratic shell game where hiding waste and fraud takes a higher priority than catching it. It is akin to closing down a 9-1-1 call center and reporting a decrease in reported crimes.

Nor is it clear that the department has considered how much of the recent uptick is tied to recent fluidity in the labor market. Changes in income were far more common in 2020 due to the COVID-19 pandemic than in typical years.

Conclusion

The solution is not to end the requirement so fewer improper payments are discovered. The solution is to increase enrollee reporting.

As Mississippi recovers from the pandemic and explores tools to increase enrollee reporting, the state’s improper payment rate should decline. Simplified reporting will, instead, hide the problem from effective oversight and increase spending and dependency in Mississippi’s welfare programs.

[i] 7 CFR 273.12

[ii] Ibid.

[iii] Ibid.

[iv]  Food and Nutrition Service,“Supplemental Nutrition Assistance Program: State options report, 12th ed,” U.S. Department of Agriculture (2016), https://fns-prod.azureedge.net/sites/default/files/snap/14-State-Options.pdf

[v] 2017 Miss. H.B. 1090

[vi] Miss. Code Ann. § 43-12-33

[vii] Food and Nutrition Service,“Supplemental Nutrition Assistance Program: State options report, 12th ed,” U.S. Department of Agriculture (2016), https://fns-prod.azureedge.net/sites/default/files/snap/14-State-Options.pdf

A tremendous amount has happened under the dome of our Capitol building in the past week. The House and Senate had deadlines to move bills from their own respective chambers. So now they will begin considering legislation from each other.

All the Best,

Hunter Estes
Senior Director, Policy & Communications

Senate Bill 2604, titled the "Mississippi Broadband Expansion Act," passed the state Senate in recent days and will now go to the House of Representatives for consideration. While the title of the bill gives the impression of meaningful broadband expansion, the bill actually increases the size of government by allowing select municipalities to establish broadband networks.

In 2019, the legislature passed a bill allowing electric power associations to offer broadband services. In turn, many of the municipal electric systems wanted to start offering broadband services as well. This year's bill allows for such systems to do that. At first glance, it may seem like a beneficial proposition to some. However, government-owned broadband networks have a long history of failure and waste taxpayer money.

The complexities of broadband service

In the first place, it is important to recognize that the complexities of broadband are highly specialized and more challenging than other services like electricity that municipalities already offer in many places.

For instance, it is far more difficult to predict the revenues of broadband networks than electricity and water utilities. The reason for this is relatively simple. While electricity and water service is an absolute necessity that practically no consumer will willingly go without, broadband has not yet gone to the level of a basic living standard.

In light of this, many people within the municipal broadband service area may not choose to get the service for any number of reasons. In some cases, a citizen just may not see a need to have broadband in their home. In other cases, consumers may choose to use alternative broadband sources such as cellular or satellite.  

Search uncertainty leaves municipal broadband networks with the necessity to estimate their potential customer base. This requires hiring consultants to analyze the city demographics, infrastructure, and interest in broadband. While such assessments may be helpful in some cases, they are notoriously inaccurate, often leaving cities with thousands of dollars in consultancy costs, with taxpayers having to pay for false data.

In addition, if the expected broadband service revenues are lower than expected, many municipalities have been forced to prop up their networks with additional taxpayer funds. This ultimately places the burden of the increased costs on taxpayers, even for those who never even bought the service in the first place.

The potential for private sector deterrence

In addition to the complex inefficiencies and waste that many municipal broadband networks have brought on taxpayer budgets, municipal broadband networks also have the potential to push away private sector investment.

As broadband expansion costs become cheaper with new technologies, many cities and towns already have private sector investment and broadband expansion on the horizon. However, when the government places its hand into the free market, an imbalance is caused.

For example, consider a municipality with a broadband service territory of 8,000 residents. Sixty percent of those customers might be fairly satisfied with their service (4,800 people), and 40 percent might be dissatisfied (3,200 people). In a free market context, the broadband provider would be motivated to satisfy those customers so that revenues can keep flowing to sustain the operation.

However, in this case, a government municipality would have taxpayer dollars to fall back on no matter how bad the service actually is. What's more, private sector investment would have less motivation to invest in that market because 60 percent of the customers did not want a new broadband provider. In the meantime, the 40 percent would be stuck with poor service and a lack of consumer choice.

Broadband growth should not be a doorway to government growth

There is little debate that Mississippi needs broadband growth and expansion. But using the failed model of municipal broadband networks is not the way to get Mississippians the service they need. Municipal broadband may provide a temporary solution in some cases. Yet, the long-term effects of such networks on taxpayers and private sector investment often outweigh potential benefits.

Other states have been down this road, and they serve as a cautionary tale for the Magnolia State. Rather than growing government, municipal broadband should be rejected in favor of policy models and free-market solutions. This is a true pathway for Mississippi to move forward into the future.

My apologies for not getting you a legislative update these past few weeks. I have been out of the office for two weeks of Army National Guard training. It feels good to be back, and I’m very glad to be spending more time walking through the Capitol than walking through the woods.

Without further delay, here’s a quick catch up on some of the good, the bad, and the interesting from this week:

The Good:
- HCR 39 from Speaker Philip Gunn would create a new initiative process that would allow Mississippians to make their voices heard. This is a major win for all those who wanted to see a revival of the initiative process in some capacity.
- HB 599 from Rep. Dana Criswell and Rep. Brady Williamson extends important accountability and transparency measures to counties and municipalities. This will guarantee that citizens have more clear access to how their local governments are run.
- HB 917 from Rep. Jansen Owen ensures the freedom to operate for home-based businesses. A record number of new businesses were created during the pandemic, many of these, home-based. These entrepreneurs should be applauded, and we support all efforts to guarantee their continued freedom to operate.
- SB 2797 from Sen. John Polk would require state agencies to report potential deficits and necessitate that they work with the state auditor’s office to reduce expenses. This is a positive way to tighten budgets and eliminate government waste of taxpayer money.

The Bad:
- SB 2731 reduces the income reporting requirements for food stamp recipients and increases the potential for welfare waste and abuse. With the massive amount of fraud that already exists within our welfare systems, there is no reason to loosen existing accountability measures. We need to ensure these programs are helping those they’re meant to, not those that want to cheat the system.

The Interesting:
- The Legislature is considering a vast range of pay raises for government employees across the state. Those individuals may very well deserve a pay raise, but I just wish the average Mississippian would see their pay increase as consistently as our public servants’ salaries do.
- HB 1487establishes the song “One Mississippi” by Steve Azar as our official state song. Personally, I think I prefer the Kane Brown version.

There’s a lot moving at the Capitol right now, I’ll do my best to keep you updated as we continue to fight for liberty here!

All the Best,

Hunter Estes
Senior Director, Policy & Communications

Ps. Be sure to follow our Facebook and Twitter pages for detailed updates about the legislative session. Check out our Legislative Tracker, too.

The Mississippi Senate recently passed Senate Bill 2731 which would lower reporting requirements for the recipients of food stamps. Under current law, Mississippi food stamp recipients are required to report any change in income above $125. Under this legislation, no income reporting would be necessary unless the recipient knows that the income would make them ineligible.

Technically referred to as the Supplemental Nutrition Assistance Program (SNAP), the program uses a combination of state and federal dollars to provide food assistance to families under a certain income level. In order to ensure that only those who qualify to receive the benefits, current state law requires recipients to report any increase in income of $125 or more. Upon receiving information about income increases, the Mississippi Department of Human Services (MDHS) reviews the income level to assess continued eligibility.

That would change under Senate Bill 2731. Instead of requiring recipients to report any notable income changes, this bill would require recipients only to report if their gross monthly income is above 130 percent of the Federal Poverty Level (FPL). Thus, the accountability essentially switches to an honor system rather than requiring recipients to report any potential change. In other words, recipients would be the ones who would have to calculate whether income increases only if it affected their eligibility and then notify MDHS.

Of course, such an honor system raises obvious concerns that some recipients might not even report their eligibility change at all. But there are more basic concerns to be raised. Even if a well-meaning recipient did their due diligence to determine if an income increase made them ineligible, determining the income cap is no simple matter either.

The Federal Poverty Level used to calculate eligibility changes based on several factors, including gross monthly income, the number of people in the household, net monthly income, as well as whether or not a household member is elderly or disabled. Depending on the circumstances, the gross monthly income limit is $1,396 for some people and $4,347 for others, with additional thresholds in between and above these numbers.

As a practical example, the government may tell a recipient what their income cap is when they first get on food stamps. If someone moves out of the household, the FPL income cap will decrease, and a recipient may not even realize that they have a new income cap to watch for if they increase their income.

The proposed change would lead to the system being ripe for confusion, mismanagement, and waste. Instead, Mississippi should stick with a system that places the responsibility for tracking and calculating eligibility into the hands of MDHS. The current system accomplishes this by income reporting that the department internally reviews.

As an entity that is accountable to elected officials, MDHS should continue to be responsible for ensuring that the food stamp program does not waste taxpayer dollars on ineligible recipients. Placing expectations on the food stamp recipients to voluntarily review any income increases to assess their eligibility is shortsighted at best. This burden should be placed on MDHS as the entity that has been given the trust of these taxpayer funds. Funds must not be wasted on those who are not even eligible for redistributive programs like food stamps. Keeping the current requirement for food stamp recipients to report any $125 income changes is a vital step for true accountability to happen.

The United States has seen a notable increase in home-based businesses in recent years. However, despite their potential to grow incomes and expand opportunities, many local regulations have hamstrung these businesses. The Mississippi House has a bill introduced to address these issues, thanks to the initiative of Representative Jansen Owen.

House Bill 917, the Home-based Opportunity Freedom Act, passed in the House of Representatives yesterday. The bill would both explicitly establish that arbitrary regulations and fees cannot single out home-based businesses.

As people harness the power of new technologies and leverage opportunities for growth, small business owners have been able to build home businesses that can provide supplemental or even primary income. In many cases, home businesses eventually expand and grow to full-scale operations with offices, warehouses, and dozens of employees.

In addition to the immediate benefits for small businesses, many of these small businesses eventually become mid-sized companies or even multi-billion dollar corporations. For example, Amazon, Hobby Lobby, Microsoft, Google, Dell, Disney, and a host of other large companies, started small in garages, houses, apartments, and dorm rooms.  

Many local governments often wax eloquent about the need for economic growth and business expansion. Yet, those same governments often impose regulations that are a direct barrier to business even starting in the first place. The need for a friendly regulatory environment is stronger than ever before.

A study conducted by the Center for Growth and Opportunity at the Utah State University found that many cities and local governments have zoning laws, permit fees, and a tangle of other regulations that make launching a home-based startup all the more difficult. According to another report on the issue from the Cato Institute, 18 states have passed laws reducing such burdens on home-based businesses. Such laws have helped home-based business models ranging from music lessons to cottage food sales.

Mississippi does not have a law protecting home businesses, and the effects have shown. For instance, the City of Jackson prohibits any increase in traffic due to a business being in the home. Thus, an increase in traffic caused by customers picking up cottage food could be viewed as a violation of the rules. The city also prohibits a home business from having any employees other than family members. Could this prohibit an attorney working from home from hiring a paralegal or a real estate broker to hire a secretary? A plain reading of the rules would conclude that both scenarios have a prohibition as well.

But Jackson does not stand alone with burdensome regulations. The City of Ridgeland has a rule that a home business may not occupy more than 25 percent of the total floor area of a home. This begs the question of why the arbitrary 25 percent number was the standard (as opposed to 20 percent or 30 percent). In the City of Nettleton, home businesses are not permitted to have more than five customers per day. In the City of Tupelo, there is an explicit prohibition on any mechanical work from home, such as small engine repair. The City of Cleveland states that "the dwelling floor plan shall remain unaltered from that appropriate with a household." However, the city has no specific definition of what would be "appropriate with a household," which makes enforcement arbitrary. In addition to these specific regulations, many cities also have an extensive application and permit process for home-based businesses.

The time has come for Mississippi to remove such arbitrary restrictions. According to 2016 pre-pandemic data from the Small Business Administration, approximately 50 percent of all small businesses were already home-based. In the wake of greater familiarity with working from home brought on by the pandemic, in conjunction with many starting their own businesses, the evidence suggests that these numbers have only increased since the pandemic. It's time for Mississippi to step up to the plate and enact policies to protect home-based businesses from excessive local regulations. It should not be a crime or a privilege to practice entrepreneurship in your home. This legislation would ensure that Mississippians are protected from government intrusion as they pursue opportunities through home-based businesses.