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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:

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:

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:

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.

For those that enjoyed a cold one during the Super Bowl last night, you paid among the highest taxes in the country for that beer. 

According to the Tax Foundation, Mississippians pay a beer excise tax of $0.43 per gallon. This is the 12th highest rate in the country. Mississippi just looks better than many other Southern states, who have the highest rates in the country. 

Tennessee has the highest tax rate at $1.29, Alabama is third at $1.05, Georgia is fourth at $1.01, and Kentucky is sixth at $0.87. Wyoming has the lowest rates in the country at just $0.02. 

In Mississippi, like most states, the excise tax is paid by wholesalers on shipments received in the state. That mean the person buying the beer doesn’t actually see it when they checkout. Rather, you will just see applicable sales taxes. But whether you can see it or not, the wholesaler just passes the costs on to the consumer.  Thereby, raising the cost for the person purchasing the beer.

But the high taxes are just another example of our modern laws governing the control of alcohol, and continue a long tradition of excess government control. 

We have over empowered individual counties to define their own laws, and in so doing have created a chaotic state of regulation, difficult to understand by the average residential citizen, let alone internal and external businesses hoping to sell.

Furthermore, the state has retained an egregious amount of control of the distribution process. Mississippi has decided that, rather than allow private businesses to control the market, it will run a large warehouse in the central part of the state which will have a complete monopoly over the distribution of all spirits and wines. 

As the Department of Revenue states on its own site, “the ABC imports, stores, and sells 2,850,000 cases of spirits and wines annually from its 211,000 square foot warehouse located in South Madison County Industrial Park.”

This warehouse consistently operates at capacity, and government leaders are considering a $35 million expansion. Perhaps our politicians ought to consider giving the free market a chance? 

There is no reason that our government should be so deeply involved in controlling the distribution for a product. They hike up prices by a tremendous rate, limit access to the product, and determine which brands are allowed to sell in the state, leaving businesses in the dark and unable to control their own wares.

Private businesses are barred from distributing alcohol in Mississippi. While UberEats, DoorDash, and GrubHub have created thousands of jobs in other states through their delivery systems, our legislative leaders have shut down this opportunity for individuals to order alcohol with their delivery.

And while a variety of companies sell and ship wine, whiskey, and other alcoholic beverages around the country, our legislative leaders have determined that we shouldn’t have this freedom of access. 

If you were shopping for a gift online, you might find yourself looking at a wine basket, such as those at Wine & Country. However, upon checkout you will be met with the embarrassing notification that your state is one of only three in the entire nation that completely bars the shipment of any wines.

The excess regulation has made Mississippi last in the nation for craft beer development. For comparison, craft brewers currently produce $150 per capita in Mississippi, while they produce $650 per capita in Vermont. Imagine the difference such an industry could make in our state. This is thousands of tangible new jobs which are being discouraged from coming into existence by our government.

Existing policies have led Mississippi to have the largest shadow economy in the nation (referring to the exchange of products that are not taxed or recorded) at 9.54 percent of GDP. Moonshine is either produced or is available in every single county, which many link to the strict regulation of the alcohol industry. Our egregious taxation of alcohol products displayed here by the Department of Revenue has encouraged many companies such as Costco and Trader Joes to avoid opening locations in the state due to the lack of revenue potential on alcoholic products.

Prohibition is alive and well in Mississippi. Our government has decided we apparently can’t be trusted to make basic purchasing decisions for ourselves, so they must control what alcoholic drinks we’re allowed to have access to, how we’re allowed to receive these drinks, and from whom we’re allowed to purchase these drinks.

Be not fooled by the government “do gooders” who proclaim that they carry out policies like this for our own protection. Too many of our political leaders refuse to give freedom a chance, and instead have decided that they know better than we do when it comes to running our lives.

The fact is that while Mississippi prides itself on having a relatively low income tax, it finds dozens of other ways to tax and control its citizens. 

Companies are discouraged from entering into business in the state because we have established covert taxes which discourage entrepreneurial risk taking. 

Mississippi controls, regulates, and taxes alcohol worse than New York or California, so imagine what other discrete ways it is shutting down job opportunities and discouraging new business.

Mobile, Alabama’s City Council will delay its decision on whether to spend $3.04 million in taxpayer funds on bringing passenger rail service to the city.

The council voted unanimously to postpone the resolution until the next meeting on February 4 on whether to authorize the matching funds for Amtrak over the next three years starting in 2023. This twice-daily service would connect the Port City with New Orleans via CSX trackage that runs along the Mississippi Gulf Coast.

Mississippi has already committed about $15 million in state taxpayer money to the project, with Louisiana adding $10 million. The decision will be one day before a federal deadline to receive the matching funds from the federal government.

Stephen McNair from the Southern Railroad Commission told the council that if the city couldn’t find the funds to pay for the rail service, the train’s terminus would be in Pascagoula.

“I believe this is a train whose time has come and I’m hopeful that we can move forward positively,” Council vice president Levon Manzie said. Manzie sponsored the resolution on the council’s agenda for the rail funding, which was rejected by the council’s finance committee last week.

Gary Knoblock, a councilman at-large in Bay St. Louis, told Al.com that the Mississippi Gulf Coast is all behind bringing rail back to the area.

“I know Alabama has been concerned with the costs and whether it will bring tourists,” Knoblock said. “No one really knows until you do something. Unfortunately, you have to spend money to find out. It’s hard to make decision on something like that without knowing for sure something will happen.

The Federal Rail Administration — under the Consolidated Rail Infrastructure and Safety Improvements Program (CRISI) — is providing up to $32,995,516 in taxpayer funds for improving crossings, bridges, sidings and other infrastructure along the route. 

The federal grants that would be provided to enact Amtrak service are meant to get the service online. The first year, the grants would provide 80 percent of the operating costs, declining to 60 percent in the second year and 40 percent in the third.

A 2015 Amtrak study says that a twice-daily train between Mobile and New Orleans would draw 38,400 riders annually and likely cost about $7 million annually to operate. Similar routes have existed from 1984 to 1985 and 1996 to 1997, but both ended because state taxpayer funds were no longer appropriated for that purpose. 

The Southern Rail Commission is an Interstate Rail Compact created in 1982 by Congress and consists of commissioners appointed by governors from Alabama, Louisiana and Mississippi. 

Senate Bill 2115, sponsored by Sen. Angela Hill, would cap fees paid to outside money managers for the state’s defined benefit pension system and require annual reporting.

The Public Employees’ Retirement System of Mississippi serves most state, municipal and county employees (150,651 active employees and 107,844 beneficiaries) and is only 61.6 percent fully funded. 

Its unfunded liability amounts to $17.6 billion or more than three years of all general fund tax revenue. While that liability isn’t due at once, the figure provides an insight into the health of PERS.

Last year, PERS’ plan investments earned $1.7 billion and total service fees represented more than $102 million of that total. In 2018, PERS’ investments earned $2.3 billion and manager fees added up to more than $103 million.

The bill, if signed into law, would require the PERS Board of Trustees to review all investment contracts and reduce investment fees by half by June 30, 2021.

The saved monies would be put back into PERS and the Board would have to report to the legislature on or before December 31 of each year on how much it spent for investment management services.

While this wouldn’t be a huge boost to PERS’ bottom line, reducing the amount PERS pays to outside money managers would allow more money to stay with the fund and provide more capital for investments.

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

Read the bill here.

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

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