House Bill 989, authored by Rep. Charles Busby, would make several changes to the way school districts report their financial information to the Mississippi Department of Education and prohibit some districts from increasing their budgets.

The bill would add some guidelines for financial reporting for the state’s school districts.

They include:

• The state funding formula budget calculation for each district.
• The amounts and funding sources for all revenues.
• The average daily attendance and base student cost for each school district.

MDE publishes an annual report on K-12 education with financial information, such as revenue reports and administrative costs and this would add more transparency to these reports.

This would also prevent any school district with a budget greater than 100 percent of the state funding formula for granting an automatic increase in the property tax rate. This would only happen if the millage rate (the amount per every $1,000 of a property’s assessed value) required to generate revenue for the school district’s budget request is equal to 55 mills or less and the amount requested doesn’t exceed the preceding year’s property tax revenue by more than four percent. 

Under current law, school districts have to contribute at least 28 mills worth of property tax revenue to operating revenue alongside state funds and can contribute up to 56 mills in additional tax revenues.

Understanding the state’s Mississippi Adequate Education Program funding formula is an exercise in futility for the average Mississippian. The formula calculates a base student cost which isn’t needs based and is rigged to increase every year. The legislature is not legally required by the state constitution, like in Louisiana, to appropriate the full MAEP budget request. 

The legislature has only done so a few times since the difference between the MDE request and what appropriators are willing to outlay is often hundreds of millions of dollars. 

While the amount of taxpayer funds appropriated under MAEP to school districts is a huge chunk of the state’s spending on K-12 education, it isn’t the only component, along with special state funds and local property taxes.

In fiscal 2020, Mississippi taxpayers will spend $2.246 billion in MAEP funds alone, which are provided to each school district via a base student cost calculated by the formula. Just the state funds for general education programs add up to an additional $233 million and vocational and technical education is an additional $81 million in state funds.

HB 989 would increase the transparency of financial reporting for each school district in the state and would also put limitations on the ability of school district boards to automatically raise property taxes.

MCPP has reviewed this legislation and finds that it is aligned with our principles and therefore should be supported. 

Read HB 989.

Track the status of this bill and all bills in our legislative tracker. 

In this episode of Unlicensed, MCPP's Steve Wilson interviews FGA Research Director Nic Horton about Medicaid expansion and what it would really mean for the state.

Medicaid expansion for the able-bodied in Mississippi will lead to more government dependence, much higher government spending, and won’t save rural hospitals, according to research from the Foundation for Government Accountability.

Mississippi is one of 14 states remaining that haven’t adopted the expansion of Medicaid under the Affordable Care Act, better known as Obamacare, for able-bodied, working adults up to 138 percent of the poverty level. 

Nic Horton is the research director of the FGA and has compiled some data on possible Medicaid expansion in the state. He says that Medicaid expansion is offensive to him because the program was originally intended to cover the health care needs of the disabled and elderly populations.

“Mississippi should really be proud that they’ve made the right decision on this for so long,” Horton said. “The states that have gone down this path have regretted it. When you go state by state, you find this is a program that can’t be controlled. There are no time limits. 

“No work requirements. It’s an unlimited, open-ended welfare program for able-bodied adults.”

There are two Democrat-sponsored bills in the Senate, SB 2499 and SB 2181 that would expand the state’s Medicaid program under Obamacare. Both have been double-referred to the Medicaid and Appropriations committees.

Listen Now: Talking Medicaid expansion with Nic Horton, research director at FGA

The price tag to expand Medicaid won’t be cheap. The FGA estimates that the part of expansion paid by Mississippi taxpayers would add up to $28 billion over the first decade. That’s a much higher cost than predicted by a 2012 study by the Institutes for Higher Learning. 

This study said Medicaid expansion would cost state taxpayers $148.7 million in 2021 in a high enrollment scenario (95 percent participation by eligible residents.

For comparison, the state’s general fund appropriations in 2020 added up to $5.746 billion.

As for claims that Medicaid expansion is the salve for the closure of struggling rural hospitals, Horton said this isn’t the case. According to FGA research of 1,700 hospitals with six years of financial data, the effects of expansion on the net finances of hospitals was close to zero. 

Expansion was also found by the FGA to be associated with higher hospital shortfalls, a fact confirmed by the Moody’s Investor Service, a bond rating firm that issues credit ratings for hospitals nationwide.

“Medicaid was never intended to be a slush fund for hospitals,” Horton said. “We have Medicaid as a safety net for people who have nowhere else to turn. Even if it were a cure-all for every hospital in the country, I don’t think it’d be worth the human cost to the safety net for the people who need it.”

Horton says the expansion will also crowd out private insurance. In Mississippi, the FGA says that 48 percent of those eligible for potential Medicaid expansion already have private coverage and 14 percent qualify for plans on the exchange.

Nationally, 13 million able-bodied adults are now on Medicaid because of Obamacare expansion and states that have expanded Medicaid have enrolled 110 percent more adults than expected.

This is one of the reasons why Medicaid’s finances are taking on water. According to a 2017 report from the actuaries at the Centers for Medicare and Medicaid Services, expenditures for Medicaid will grow by 5.7 percent each year and will expand from $370 billion in 2017 to more than $1 trillion. 

This means one out of every five dollars spent in the U.S. will be on health care. Just the cost of expanding Medicaid to able-bodied adults under Obama Care were expected to amount to $855 billion in new federal spending between 2017 and 2026.

Louisiana is an excellent example of the phenomena of massive growth in excess of predictions of both enrollees and spending. The Pelican State expanded Medicaid in 2016 and projections said that 306,000 new people would enroll. Those numbers have grown exponentially to 468,415 this year, a 53 percent increase.

In October 2014, Louisiana’s Medicaid program served 1,051,248 residents, including those on theChildren's Health Insurance Program. By October 2018, the program was serving 1,462,452 residents.

Indiana is another good example of the effects of Medicaid expansion. General fund spending on Medicaid in the Hoosier State increased by 26.9 percent, growing from $1.98 billion in 2014 to $2.7 billion in the 2021 budget. 

Medicaid went from 13.7 percent of the state’s general fund budget in the 2014 and 2014 budget cycles to 14.8 percent in the 2020 and 2021 budgets.

In 2013, the Hoosier State had 1,120,674 enrolled in Medicaid and CHIP programs. By July 2019, that number swelled to 1,421,594, an increase of 26.85 percent or a difference of more than 300,000.

Expanding Medicaid would also will have fraud issues. According to the FGA, state legislative auditors in Louisiana found that 19,226 expansion enrollees did not qualify for benefits, but were still enrolled in the program, receiving between $61.6 million and $85.5 million in benefits.

In Minnesota, 15 percent of the able-bodied adults sampled earned money in excess of eligibility limits.

Numbers from the FGA show that 45 percent of potentially eligible able-bodied adults already have private insurance coverage and states that have expanded Medicaid have experienced a shift from private coverage to Medicaid.

Two of the conspirators in one of the largest public embezzlement cases in state history donated generously to the campaigns of numerous present and former state elected officials. 

Nancy New and her son Zach New contributed $14,000 to several state candidates for office from 2017 to 2019, according to an examination of campaign finance records.

Gov. Tate Reeves, Lt. Gov. Delbert Hosemann, former state Attorney General Jim Hood, state Sen. Chris Johnson, former state Rep. Brad Touchstone, Secretary of State Michael Watson, former Commissioner of Agriculture and U.S. Sen. Cindy Hyde-Smith and former state Rep. Cory Wilson all received campaign donations from the News. 

Reeves received $1,000 from Nancy New in 2017 and said he plans to either return the money to the state if they’re convicted or a worthy charity.

Hosemann’s campaign received $5,000 from the News from 2016 to 2019. He received $1,000 from Zach New on November 16, 2018 and $2,500 from Nancy New on the same day. She gave two contributions in 2017, $250 on May 17, 2017 and $1,500 on November 15. Nancy New’s first contribution to Hosemann on was on October 19, 2016 for $1,000. 

Zach New gave contributions to Hosemann’s campaign of $500 on November 15, 2017 and May 22, 2019. 

The News contributed $2,500 to Johnson in 2017 and 2018, while Hyde-Smith received $2,000 those same years. Wilson received $1,250 from the News in 2017 and 2018 while Touchstone received $1,000 in 2017.

Hood, who was the last Democrat to hold statewide office in Mississippi, received $1,000 in 2017.

Nancy and Zach New were arrested by agents from the state auditor’s office along with the former head of the Department of Human Services, John Davis, former DHS employee Latimer Smith, and an accountant for New’s non-profit Anne McGrew along with former wrestler Brett DiBiase for defrauding the Temporary Aid to Needy Families program for at least $4 million.

She was the director of the Mississippi Community Education Center and New Learning Resources, while her son Zach was the assistant executive director. She was also the founder of the New Summit School with locations in Jackson and Greenwood. A scholarship in her name for graduates of the schools is at Southern Mississippi University.

According to a scan of the Mississippi Community Education Center’s filings with the IRS, the organization received $26.7 million in government grants in 2017 and $12.9 million in 2016 after receiving nearly $2.4 million from government sources in 2015.

The IRS filings for the Mississippi Community Education Center said the organization’s purpose is for the promotion, improvement and expansion of community education through training seminars, consulting services and technical assistance.

The Mississippi Senate could be expanding the scope and cost of the state’s taxpayer-funded prekindergarten program after holding a hearing on the topic Wednesday.

Senate Bill 2286, sponsored by Sens. Brice Wiggins (R-Pascagoula) and Dennis DeBar (R-Leakesville), would expand the program to 25 percent of the state’s 4-year-old children by the 2022-2023 school year.

The bill would also increase the amount spent per student from $2,150 per student for a full-day program and $1,075 for a half-day one under present legislation to $2,500 and $1,125 respectively.

The bill would also have some reporting requirements on the program’s effectiveness. Since the chairman of the Senate Education Committee, state Sen. DeBar, is a co-sponsor, the bill likely faces few obstacles in a path to the Senate floor for a vote.

Whether Mississippi taxpayers are getting a solid return on their tax dollars with the state’s existing prekindergarten program is debatable. A report by the state’s PEER Committee (Joint Legislative Committee on Performance Evaluation and Expenditure Review) says there isn’t enough evidence to conclude whether pre-K programs provide a positive impact. It also questioned the curriculum used by the program on whether it had been properly compared against other similar curricula. 

At a hearing Wednesday, prekindergarten advocates told legislators that the program needs to be expanded, both in scope and in cost to taxpayers.

Wendy Bracy is the superintendent of the Marion County School District. She told legislators that her district’s enrollment has increased because of the experience of parents with their children in the early learning collaborative program. The program was approved by the state Board of Education in 2018.

She also said that student outcomes in her district are also improving. Marion County schools were graded as B-rated district in the 2019 accountability grades, up from a C rating in 2018.

“State funding falls short of what these collaboratives really need,” said Rachel Canter, the executive director of Mississippi First. “What we do at this age can have life-long effects. Those with quality early learning, studies show, are far less likely to end up in the criminal justice system.” 

What wasn’t mentioned was the phenomena of fade out, where the advantages of early learning slowly dissipate as a prekindergarten student is promoted to higher grades. A 2019 study of Tennessee’s program found that short-term, positive effects on early learners diminished by the time students reach the third grade. 

The study said one likely factor for the fade out of former prekindergarten students had to do with the quality of schools, but it shows that prekindergarten isn’t a panacea for overcoming a poor quality elementary school education. 

There’s also another bill in the legislature that would expand prekindergarten. House Bill 168 would create a voluntary, universal prekindergarten program in the state. Since it is authored by a Democrat, state Rep. Bryant Clark, its passage is unlikely in the Republican-dominated House.

The Mississippi Department of Education has asked for an increase of $3.2 million over last year’s appropriation of $6.7 million for the prekindergarten program in fiscal 2021, which starts July 1. 

The state’s prekindergarten program was created in 2013 and taxpayers have spent more than $22 million on it since. The Mississippi Department of Education runs the program and 14 early learning collaboratives (a district or countywide council that submits an application that involves a public school district) and the program serves about 2,200 students.

MDE is prohibited from reserving more than 5 percent of the appropriation for administrative costs and the funds allocated can be carried over the next fiscal year if they’re not completely exhausted.

Collaboratives must match state funds on a one to one basis and those can include local tax dollars and federal funds. 

Should Mississippi continue to have one governing body over all state universities or are better options available that would be more responsive to local communities?

The Mississippi Center for Public Policy released a study today that analyzes higher education in the state of Mississippi. “Southern Exposure, A Look at Mississippi’s Public Colleges and Universities,” a report produced by the American Council of Trustees and Alumni, takes a detailed look at the eight, public, four-year, undergraduate institutions in Mississippi on issues ranging from governance to curriculum.

“At a time when colleges and universities across the country are facing a variety of headwinds, much of their own making, there is no better time for Mississippi to take stock of how we’re doing. When we value something, we owe it to ourselves to give it a full examination so that we might improve it for the next generation,” said Jon Pritchett, CEO of the Mississippi Center for Public Policy.

“Mississippi is a proud state with much to offer our nation. University leadership faces the ongoing challenge of providing the finest education at the most affordable price, if the state is to realize its full potential. We hope that our report will help the Mississippi system optimize its crucial mission to prepare students for the demands of global competition, dynamic job markets, and informed citizenship,” said ACTA President, Dr. Michael Poliakoff.

In Mississippi, there is a single governing Board of Trustees for the State Institutions of Higher Learning, or IHL. While they have many responsibilities, one of the most important tasks that they can undertake is selecting a new president or chancellor. Last fall, the IHL came under fire for the lack of transparency surrounding the selection of Dr. Glenn Boyce as the new chancellor at Ole Miss, someone who was initially hired to conduct the presidential search. 

Many began to wonder if this is a decision that could be made closer to home.

While Mississippi has a consolidated university system model, other options include the “one board, one institution” model where each institution has their own board of trustees or the “nested board governance model” where a system-level board of governors share responsibility with a campus-level board. 

Local boards would be quicker to respond to market forces. 

But transparency is an issue beyond the selection of a president. A review of the minutes from board meetings between May 2017 through June 2019 found that only three of the more than 500 votes were non-unanimous. 

This may be the result of groupthink, where the board accepts almost any proposal laid before them or where every new initiative proposed by administrators is approved. Or, there may have been debate that is not reflected in the minutes, which raises an additional set of concerns about transparency and public accountability. 

“Transparency is an essential part of good governance, and when trustees are making decisions, some of which necessarily will be controversial, the record of their debates needs to be available to the public whom the board ultimately serves,” the report reads.

Along with governance, the report also measures academic strength, intellectual diversity, and cost and effectiveness. Key findings from the report includes:

• Graduation rates among several IHL universities are unacceptably low. 
• Athletic expenditures at the Ole Miss and Mississippi State University have skyrocketed, outpacing many schools throughout the nation. Some of Mississippi’s smaller schools have tried to keep pace, passing on these costs to their students. 
• No school in Mississippi currently requires all its students to complete a course in American government or history. This deficit inevitably diminishes graduates’ ability to participate effectively in our democratic republic. 
• Although free speech policies at most Mississippi universities are appropriate, this is not the case at Ole Miss. They have a Bias Incident Response Team with highly disturbing implications for freedom of expression and the due process rights of students. 
• None of the IHL schools have yet adopted the Chicago Principles, a commitment to the importance of the unfettered and unobstructed pursuit of truth and knowledge as the defining value of a college or university. The Chicago Principles are widely seen as the gold standard for protecting free inquiry and free expression on college campuses, and Mississippi needs to join other eminent universities and university systems that have made this important public commitment. 

Pritchett added, “We regard higher education as a significant issue in public policy. An awful lot of taxpayer money gets appropriated towards it and a large amount of family household expense can be tied to college tuition and expenses. That’s why we are delighted the American Council of Trustees and Alumni, the nation’s leader in such matters, will be here in Jackson to share the results of this non-partisan examination.”

The full report can be found here.

Two bills that would’ve possibly allowed state and local retirees to receive pay for their service in the Mississippi legislature while also collecting their retirement benefits died in the Appropriations Committee Wednesday afternoon on party line votes.

House Bill 601 was sponsored by state Rep. Earl Banks (D-Jackson) and would’ve allowed future legislators who were retirees to continue to receive their Public Employees’ Retirement System of Mississippi benefits while also collecting partial legislative pay (50 percent). 

It was defeated after 25 out of 33 members of the committee voted against it on a roll call vote.

House Bill 604 would’ve allowed members to waive all or a portion of their salary. It was sponsored by state Rep. Billy Andrews (R-Purvis), who is one of three remaining PERS retirees elected this cycle who are still in the legislature. Ramona Blackledge resigned her seat in the House last week.

Like HB 601, it also died after 24 members of the committee voted against it on another roll call vote.

Andrews also sponsored HB 603, which would allow PERS retirees to serve in the legislature in the same manner as elected county or municipal offices. It was not taken up by the committee on Tuesday.

House Speaker Philip Gunn has said that having PERS retirees receive both their benefits and a legislative salary is double-dipping and refuses to reduce the pay of legislators who are also retirees. 

According to state law that governs legislative pay ($10,000 per year plus per diem and mileage), the language used for legislative pay is shall, which means something must be done.  

In 2018, then-Attorney General Jim Hood released an opinion that said that a PERS retiree doesn’t forfeit their benefits if they were elected to the legislature and could receive both salary and pension benefits simultaneously. The opinion overrode a long-time rule of PERS that prohibited state elected officials from receiving salaries and pension benefits. 

An opinion issued in January 2019 by Hood clarified the issue and said that any retiree serving as an state elected official could do the same thing as those who go back to work for state agencies, where they could receive only one half of the salary and only be employed on a part-time basis. 

PERS then released a regulation that was approved by the fund’s governing board in April 2019 that allowed legislators to collect their retirement and partial legislative pay.

The defined benefit pension system is still awaiting U.S. Internal Revenue Service approval for the new regulation. According to a release, the IRS still has some questions and a call with federal officials is anticipated for later this month. If PERS doesn’t receive approval, the regulation that prohibited retirees from collecting their benefits while serving in the legislature will be re-instated. 

The opinion also said that a retiree would require a 90-day break in service between when they retired from their state or local position and were elected to the legislature, unless an exception was allowed.

State law says that retirees can return to work at a state agency after a 90-day break in service on a part-time basis for half pay.

The legislature is considered a part-time position.

State Auditor Shad White and his investigators arrested the former head of the state’s largest welfare agency, the director of several non-profits, her son, and a former professional wrestler on Tuesday for defrauding a government program that provides assistance to the poor.

Former director of the Department of Human Services John Davis; executive director of the Mississippi Community Education Center Nancy New; her son Zach New, who is the assistant executive director of the same 501 (c)(3) non-profit, and former wrestler Brett DiBiase are accused of obtaining millions from the Temporary Aid to Needy Families program via a variety of business entities and accounting tricks. 

Agents from the auditor office also arrested a former Department of Human Services employee Latimer Smith and Anne McGrew, an accountant for the Mississippi Community Education Center.

It was the culmination of an eight-month investigation that White said is still ongoing. The accused were indicted by a grand jury empaneled by Hinds County District Attorney Jody Owens, whose office will prosecute the case.

The auditor’s office said the amount lost in the scam hasn’t been determined, but the loss already exceeds any embezzlement scheme in the office’s records. 

According to a scan of the Mississippi Community Education Center’s filings with the IRS, the organization received $26.7 million in government grants in 2017 and $12.9 million in 2016 after receiving nearly $2.4 million from government sources in 2015.

The IRS filings for the Mississippi Community Education Center said the organization’s purpose is for the promotion, improvement, and expansion of community education through training seminars, consulting services, and technical assistance.

Davis and Smith are accused of creating false invoices to pay DiBiase from TANF funds for teaching classes about drug abuse when the former professional wrestler was in a drug rehabilitation center in California at the time and didn’t teach the classes. The invoices were created and payment was rendered despite both knowing that DiBiase was not performing the work.

The News allegedly used the Mississippi Community Education Center to pay for DiBiase’s rehab at the luxury rehab facility called the Rise in Malibu from TANF funds received by the non-profit. Documentation submitted by the News said the funds were used to pay DiBiase for the training sessions that he never conducted.

The News are also accused of transferring millions in TANF funds to their private businesses and then converted funds to their personal use via fund transfers, fraudulent documents, at least one forged signature, and deceptive accounting measures.

The pair allegedly used TANF funds to invest in a pair of medical device companies — Prevacus and PreSolMD — based in Florida.

Gov. Tate Reeves released his first budget recommendation and it largely resembles the legislature’s budget document released a few months ago.

In his fiscal year 2021 budget, Reeves wants to spend 0.2 percent more than last year, an increase of $10.7 million. The 2021 general fund budget would be $6.374 billion, up from $6.363 billion in fiscal 2020, which ends on June 30.

The legislature’s proposed budget would be $6.27 billion.

The Reeves administration wants to spend $100 million in one-time funds for workforce development, which would be spent on:

• Modernization of the state’s community college workforce training apparatus.
• Incentives for high school graduates to earn industrial credentials.
• Exposure of Mississippi high school students to computer science and coding courses before graduation.
• Dual credit programs that would allow high school students to earn credits.
• Creating affordable bachelor’s degree programs in high-growth industries.
• Incentivizing more vocational and technical courses for high schools.

The latest revenue report from December show that tax revenues are $166 million over the estimates.

As for other appropriations, K-12 education would receive an $82.6 million increase (3.2 percent) to $2.656 billion from last year’s outlay of $2.573 billion. 

Higher education would be cut by $24 million (2.8 percent) from last year’s appropriation. The Institutes of Higher Learning would take a $15.2 million cut (2.4 percent reduction) from last year’s outlay while community colleges would be cut by $9.1 million or 3.6 percent from 2020. 

According to the budget’s executive summary, those cuts were in accordance with the recommendations of the Joint Legislative Budget Committee and were the result of two circumstances of one-time money included in the last budget for specific projects or employee openings that haven’t been filled in 180 days. 

With Reeves’ last act as lieutenant governor signing off on the JLBC recommendation, it was no surprise that the two budgets are closely aligned.

Social welfare programs, such as Medicaid, would receive the same level of funding as last year’s appropriation. Corrections would also be level-funded from last year’s appropriation.

The biggest cuts, percentage wise, include:

• The state Oil and Gas Board’s general fund outlay would be reduced by $1 million (32.1 percent) from fiscal 2020.
• Department of Finance and Administration’s general fund appropriation would be reduced by 21.3 percent, shrinking from $65 million in fiscal 2020 to $51 million in fiscal 2021. 
• Mississippi Development Authority’s appropriation would be reduced from $27 million in fiscal 2020 to $22.5 million in 2021, a cut of 17.5 percent.
• The Department of Archives and History would have its outlay shrink by 14.5 percent from $11.4 million in fiscal 2020 to $9.758 million in fiscal 2021.
• The Arts Commission would have a $155,912 reduction (9.1 percent) from last year’s appropriation. 

Last year, lawmakers appropriated $6.36 billion for the state budget, a figure that balloons to $21.52 billion when federal funds are considered. 

In Mississippi, the budget process starts on August 1, when state agencies submit budget. 

The JLBC meets every September to hear agency heads make their pitches for their budget requests and to also receive estimates of the state’s tax revenues. The JLBC then meets in November to put together a budget and later releases the budget blueprint in December. The governor also submits a proposed budget as well.

Mississippi's general fund budget is one of the last tasks handled by the legislature before it leaves town in April. The budget is constructed as a series of funding bills for each state agency for the governor to sign into law. The new budget will go into effect on July 1.