A report by a state watchdog says there isn’t enough evidence to conclude that public prekindergarten programs have a positive long-term impact.

The PEER Committee (Joint Legislative Committee on Performance Evaluation and Expenditure Review) issued a report on the state’s taxpayer-funded prekindergarten program, which began as the Early Learning Collaborative Act of 2013.

The Mississippi Department of Education runs the program, which has received $21,229,151 since fiscal 2017 to assist 14 early learning collaboratives (a district or countywide council that submits an application that involves a public school district) in implementation for 2,200 students. 

MDE evaluated the sites (either a public or private school, licensed child care center, or Head Start Center) and found 59 successful and put three on probation.

*Estimates using percentages mandated in Senate Bill 2395

The report also says that MDE should investigative several sites for highly unlikely results on several assessments used to measure whether the program prepares students for kindergarten. It also criticized the MDE for its evaluation criteria for the program participants, which uses a “rate of readiness” score. 

The report says the measure fails to adequately measure collaborative and site performance. The MDE, according to the report, has added two more assessment tests to measure the success of grant recipients.

MDE also requires prekindergarten program participants to use a curriculum that PEER says is not evidence based, as required by the authorizing law from 2013. The curriculum, known as Opening the World of Learning or OWL, doesn’t meet the requirements in state law because it has not been tested at multiple, random sites across heterogeneous populations. PEER said the only test conducted found that OWL was worse than another curriculum in comparison.

Collaboratives must match state funds on a one to one basis and those can include local tax dollars and federal funds. Taxpayers pay $2,150 per student for a full-day program and $1,075 for a half-day one. 

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

MDE has asked for an increase of $3,276,616 over last year’s appropriation of $6,699,517 for the prekindergarten program in fiscal 2021, which starts July 1. 

This was PEER’s second evaluation of the program after another report was filed in 2015. 

With this year’s session just a week old, the Mississippi Senate has already filed two bills that would increase teacher pay after the legislature passed one in last year’s session.

Senate Bill 2001, authored by state Sen. Dennis DeBar (R-Leakesville), would provide a 2.27 percent increase on average for teachers over the present pay scale or about a $1,000 hike for most teachers. 

With Lt. Gov. Delbert Hosemann having already announced Senate chairmanships, the chamber has the advantage in getting legislation onto the calendar. The House will announce theirs this week.

With DeBar recently appointed as Senate Education Committee chairman, SB2001 could be headed to the floor as soon as next week.

The biggest increases would be for the lowest base pay scale, with those with one to four years of experience receiving a 3.09 percent pay hike, improving from $35,890 to $37,000 or a boost of $1,110.

Using the previous pay hike as a guide ($76.9 million for $1,500), this pay hike could cost taxpayers about $51.3 million annually. 

Another bill, SB2024, authored by state Sen. David Jordan (D-Greenwood), would increase teacher pay to the Southeastern average. A starting teacher at the lowest certification level would have their pay increase from $35,890 to $40,000 by the 2023-2024 school year. 

Teachers are paid according to their certification level and experience and districts can offer more than the base pay. Teachers also receive small annual increases in their base salary and bigger ones when they earn higher certification levels.

These bills are under consideration as the legislature tries to appropriate funds to cover the teacher pay hike from last year.

The Senate has referred a bill, House Bill 1, to the Senate Appropriation Committee that was passed by the House last week. The bill would provide a deficit appropriation of $18.5 million. 

The legislature appropriated $58,442,743 in last year’s session based on calculations submitted by the MDE. Those original calculations said there were 31,157 teaching positions. The actual number was 40,991.

A raise passed by the legislature this year would mark the fourth pay hike for teachers since 2000. In 2000, a $337 million plan was enacted over a six-year span. In 2014, a two-year, $100 million plan passed by the legislature increased teacher pay $1,500 in the first year and $1,000 in second.

The push to reduce our regulatory burden has picked up steam in the states, and even Washington, D.C. Will Mississippi join the mix in 2020?

Regulations are restrictions written in Mississippi code. Some are statutory, some are administrative. And these regulations often operate in the dark. We know Mississippi has a code book that consists of 9.3 million words and 117,558 restrictions, but that is only because of the work of James Broughel and Jonathan Nelson at the Mercatus Center at George Mason University.

Why does this matter?

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

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

What are we seeing throughout the country?

In Arizona, Gov. Doug Ducey has issued a new executive order requiring three regulations to be eliminated for every new regulation created. 

“Since 2015, Arizona has eliminated 2,289 regulations, saving taxpayers over $134 million,” according to the press release. “Today’s executive order also renewed a moratorium on all new regulatory rulemaking by state agencies in Arizona - the sixth year in a row the moratorium has been issued. Agencies may seek exceptions for limited reasons, such as protecting public health or safety, advancing job creation or economic development, or reducing or eliminating burdens or government waste.”

Prior to Ducey’s three out/ one in executive order, the standard had been two out/ one in. The Trump administration issued such a regulation shortly after his inauguration in 2017. In three years, we have seen a 3.5 to 1 ratio when it comes to a reduction in significant regulatory actions. This has eliminated over $50 billion in regulatory costs, according to the administration.

Idaho is the gold standard

In the past year, Idaho has  cut 75 percent of its regulationsaccording to Gov. Brad Little’s office to become the least regulated state in the country. Their regulatory count is now just 41,000 restrictions (compared to Mississippi’s 117,000+). 

Idaho was in a unique situation because the state legislature essentially repealed their entire state code book when the legislature adjourned without renewing the regulations, something they are required to do each session because the state has an automatic sunset provision. That gave Little’s office the ability to review every regulation and decide what should stay and what could go. The legislature will now have the ability to give approval to the governor’s new administrative code. 

Idaho found itself in this position because of an automatic sunset in its law; something that is usually renewed but was not in 2019. 

What can Mississippi do?

Mississippi can – and should – join the regulatory cutting game. Here are three actions we can take this year:

- Require each agency to conduct an audit of their own administrative code.

- Require that two regulations be removed from the administrative code for every new regulation that is proposed. 

- Enact a sunset provision on every administrative code that requires the legislature to decide whether each regulation should stay or go. 

Mississippi’s biggest regulators

Barely three days into session, the Mississippi House of Representatives passed a bill that would fully fund the teacher pay hike passed last session.

House Bill 1 will appropriate $18,446,578 to ensure that the $1,500 pay hike for the state’s 40,991 public school teachers is fully funded through the end of the fiscal year (June 30).

The deficit appropriation bill was passed out of the appropriations committee Wednesday with a vote by the full chamber on Thursday.

The legislature appropriated $58,442,743 in last year’s session based on calculations submitted by the MDE. Those original calculations said there were 31,157 teaching positions. The actual number was 40,991 and the raise will cost taxpayers $76.9 million annually.

The Mississippi Department of Education said in July it conducted an additional review of the number of state-funded teaching positions. MDE officials found that there were additional positions eligible for the increase that weren’t in the Mississippi Student Information System as ones funded by the Mississippi Adequate Education Program, the funding formula that determines how state funds are distributed to the school districts. Only MAEP-funded positions were eligible for the pay hike.

The problem lies in the antiquated MSIS system, which has issues with its interoperability with district systems for data. The issues forced MDE to recount the number of raise-eligible teaching positions by hand.

The legislature appropriated $500,000 as part of MDE’s appropriation to start the process on upgrading it.

The expanded list of teaching positions in addition to classroom teachers, counselors, teacher assistants, and librarians includes specialized positions such as dyslexia therapists, audiologists, and psychologists.

Since 2000, Mississippi teachers have received three pay increases beyond annual step increases. In 2000, a $337 million plan was enacted over a six-year span. In 2014, a two-year, $100 million plan passed by the legislature increased teacher pay $1,500 in the first year and $1,000 in second.

The state of Mississippi continues to see an increase in spending per student.

Last year, Mississippi, including state, local, and federal sources, spent $10,421 per student, according to the Mississippi Department of Education. This total is based on average daily attendance, which was 432,198. The year prior, Mississippi spent $10,034 per student, the first time the state eclipsed $10,000 per student. 

Spending per student has continued to increase in Mississippi. In 2012, the state was spending $8,920 per student. It increased to $9,209 in 2013, $9,394 in 2014, $9,704 in 2015, and $9,781 in 2016. 

Simultaneous to the increase in per-student-expenditures, the average daily attendance has also decreased each year. While that number was slightly above 432,000 this year, it was 461,000 in 2012. This represents a drop of more than 6 percent. Enrollment numbers decreased again for the 2019-2020 school year, and, presuming education funding is not reduced, the per- student-average will only continue to increase.

Medicaid expansion is likely dead on arrival in the Mississippi House of Representatives, but additional initiatives on addressing job creation and the worsening situation in the Department of Corrections are likely.

House Speaker Philip Gunn (R-Clinton) said at a news conference Tuesday that he’s opposed to expanding Medicaid, but would be open to possible reforms and improvements to the program.

“I’m open minded and will listen to ideas, but in the traditional use of the term Medicaid expansion, no I am not for that,” Gunn said. “I’ve not had more people asking me to put more people on Medicaid.”

He also said workforce development and halting the emigration of recent college graduates to other states — a phenomena known as brain drain — is one of the priorities for the session for the House. 

He said he supports the legislature appropriating money to allow all of the state’s high school students to take the ACT Workkeys test, which measures foundational skills required for success in the workplace. 

The state already pays to have all public high school juniors and seniors take the ACT test, which uses four benchmarks to measure a student’s readiness for college work.

Gunn said he also supports the possibility of true dual-enrollment so high school students can receive credit for vocational tech classes taken at community colleges.

Corrections could be another issue for the House. A riot and escape from the Mississippi State Penitentiary at Parchman Farm resulted in a lockdown in prisons statewide. In the last 10 days, five inmates were killed in different state prisons, with three of the deaths coming at Parchman.

Gunn says the legislature is dependent on agency heads to keep them informed on issues in their departments. Gov.-elect Tate Reeves is in the process of searching for a new commissioner of corrections.

“Any agency, whether it’s the Department of Corrections, the Department of Public Safety, the health department, they have agency heads,” Gunn said. “We are a legislature that doesn’t meet year round and they have these agency heads that are responsible for the day to day operations. 

“We trust the information they provide us and the decisions we make are only as good as the information we have. Hopefully we will have good lines of communications with the agency heads in the next four years and address all of them.”

On teacher pay, Gunn said that was a function of how much money was available. Last year, teachers received a $1,500 pay hike that will cost taxpayers $76.9 million annually.

According to the revenue estimates in the legislature’s proposed budget for fiscal 2021, there could be about $100 million in additional revenue for appropriators. 

“That’s not a one-time expense, that’s now and ever more,” Gunn said about a teacher pay raise. “We’ve got to factor in how much the citizens of this state can afford. The citizens of the state bear all of these expenses and we have to keep in mind what the citizens can afford and not overspend.” 

The Mobile City Council delayed a decision on whether to provide $3 million in taxpayer funds to restart passenger service between the city and New Orleans.

According to a story on Al.com, council members were set to vote on the possible outlay on December 31, but learned that the deadline for local matching funds for a federal railroad grant was extended from January 6 to February 5.

The council will wait until its January 26 meeting before deciding to commit to providing the taxpayer money, which would be provided over the first three years the twice-daily Amtrak trains would be in operation. 

The Federal Railroad Administration not only extended the deadline for local matches for its Restoration and Enhancement Grant program, but increased the amount of available funds by an additional $1.9 million to $26.3 million.

Alabama leaders, most notably Gov. Kay Ivey, have balked about providing funds to restore the service that was ended in 2005 before Hurricane Katrina made landfall on the Gulf Coast. 

Mississippi has already promised $15 million and Louisiana will provide $10 million to match more than $33 million in federal grants to upgrade the trackage and other infrastructure.

The three states would have to outlay more than $3.3 million apiece over the first three years of operation to keep the service running.

In addition to the possible money from Mobile for operations, either the state of Alabama or another government in the state would need to provide $2.2 million for capital improvements to the CSX-owned trackage between Mobile and the Mississippi state line.

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. The group is lobbying Alabama leaders to provide taxpayer funds for the project, including $2.5 million for a branch line to connect the CSX tracks to a possible new train station planned for Mobile’s downtown airport at the Brookley Aeroplex. 

A plan to shift all air travel from the Mobile Regional Airport west of the city to Brookley is already in progress and city leaders are game to making it a multimodal travel hub. One airline, Frontier, is already offering service from a temporary terminal at the airport just minutes from Interstate 10 and downtown.

A 2015 Amtrak study says that a twice-daily train between Mobile and New Orleans would draw 38,400 riders annually. Similar routes have existed from 1984 to 1985 and 1996 to 1997, but both were put on a permanent siding as the three states declined to provide more taxpayer funds. 

A similar passenger train, the Hoosier Line, received $3 million annually from Indiana taxpayers to provide four days per week service between Indianapolis and Chicago. Indiana Gov. Eric Holcomb sliced the money from his proposed two-year budget that was approved in April after ridership fell 18 percent from 33,930 rides in fiscal 2014 to 28,876 in fiscal 2018.

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. Some of this money could also be used by Mobile for a new train station.

These funds would also pay for preliminary engineering and federal environmental reviews needed for another project of the SRC, passenger service between Baton Rouge and New Orleans.

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

Scores on the ACT test for both Mississippi high school juniors and seniors decreased from last year, according to data released by the Mississippi Department of Education.

The average composite scores for Mississippi juniors who took the test declined from 17.8 in 2018 to 17.6 in 2019, while the percentage of juniors who met the minimum for all four benchmarks (English, mathematics, reading and science) remained at 9 percent.

Mississippi is one of 15 states that administers the ACT to all of its high school graduates. Mississippi seniors scored an average of 18.1, down slightly from last year’s 18.3.

In 2018, 38 percent of juniors in Mississippi met the standard for English. In 2019, that number increased slightly to 39 percent. Also up was reading (up one point to 24 percent of juniors meeting the standard) and a three-point improvement in science (18 percent of juniors met the standard). 

Only 15 percent of 2019 juniors met the standard for math, down from 18 percent in 2018. 

Out of the 29,817 juniors that took the test in 2019 in Mississippi, only 2,683 met the standards in all four areas, which is a good indicator of the readiness to take on college-level work. Last year, it was 2,812 out of 31,254 juniors statewide. 

Only Nevada (17.9 composite average) scored worse than Mississippi among the states that administer the test to 80 percent or more of its graduates. 

Only 46 percent of Mississippi seniors met the standard for English (tied with Hawaii for third lowest), 29 percent met the benchmark for reading (second from the bottom), 20 percent met the math standard (worst among the 80 percent testing states) and 19 percent met the standard for science, tied for last with Nevada.

One interesting trend is how juniors in A-rated and F-rated districts compared. Of the 31 A-rated districts in Mississippi, 12 had their composite scores dip in 2019 from 2018. Ten of those were 0.5 points or more. 

The Oxford School District had the biggest drop among the A-rated districts, sliding from 22 in 2018 to 20.9 in 2019.

The biggest increase was the Lafayette County School District, whose ACT score composites went up from 18.2 to 19.5.

Of the 19 F-rated districts, only seven had gains from 2018 to 2019. Two districts, had losses of a point or more. The Humphreys County School District had the biggest drop, sliding from a composite of 15 in 2018 to 13.9 in 2019.

Mississippi’s defined benefit pension fund’s fiscal position worsened after worse than average investment income in 2019 and changes to the way the staff forecasts its future finances, according to the fund’s annual report released on Wednesday.

The Public Employees’ Retirement System of Mississippi — which serves most state, county and municipal employees — now has an unfunded liability of more than $17.6 billion. Last year, it was $16.9 billion.

PERS’ actuarial staff lowered the plan’s future inflation assumption and the amount of salary increases for contributing member, which helped the unfunded liabilities increase by nearly a billion dollars.

The plan’s funding ratio, which is defined as the share of future obligations covered by current assets, shrank from 61.8 percent in 2018 to 60.9 percent, just a tick below 2017 (61 percent). While the plan’s obligations won’t be due all at once, the funding ratio presents a good view of the plan’s financial health.

The general fund tax revenue for the entire proposed state budget for fiscal 2021 is $5.85 billion. Filling PERS’ present unfunded liability would take three years of that revenue.

PERS funding ratio 1998-2019

The reason for the worsening financial situation is two-fold: Less money coming in from the plan’s investments and more benefits paid out to an ever-increasing number of retirees.

PERS earned $1.701 billion or a 6.64 percent rate of return on the plan’s investments, after earning $2.385 billion or a 9.48 percent rate of return in 2018.

The plan’s annual average expectation is 7.75 percent return from its investments. 

The number of retirees increased from 104,973 to 107,844, a difference of 2,871. The number of active members largely held steady, decreasing just slightly from 150,687 in 2018 to 150,651 in 2019. The ratio of active employees to retirees remained at 1.4 for the second consecutive year.

Benefits paid by PERS to retirees increased by $138 million over last year to $2.7 billion, an increase of 5.3 percent from 2018.

With more retirees and more paid out in benefits than last year, the amount paid as a cost of living adjustment to PERS retirees increased again. 

Last year, the plan paid $650 million in COLA to beneficiaries. This year, that amount grew 7.6 percent to nearly $700 million. 

As a percentage of benefits paid, the COLA grew from 24.9 percent of benefits paid in 2018 to 25.4 this year. 

PERS provides a cost of living adjustment that amounts to three percent of the annual retirement allowance for each full fiscal year of retirement until the retired member reaches age 60.

From that point, the three percent rate is compounded for each fiscal year. Since many retirees and beneficiaries choose to receive it as a lump sum at the end of the year, the benefit is known as the 13th check.

PERS unfunded liabilities (in billions)

PERS actuaries forecast that the plan’s funding ratio — provided that the plan’s investments average 7.75 percent over the next 28 years — will be up to 83.2 percent funded by 2047. 

If the plan’s finances average 6.25 percent rate of return, the plan would dip below 50 percent on its funding ratio by 2034 and bottom out slightly above 25 percent by 2049.

Change is possible

The dire situation does not need to continue.

Lawmakers should freeze the program’s overly generous COLA for three years or more. Then either tie it to the Consumer Price Index, which has recorded a rate of inflation of 2.18 percent since 1999 or go back to the old way of computing the COLA as 2.5 percent of the original benefit. 

One alternate solution is mimic South Dakota’s approach to its COLA. This state indexes its COLA to the CPI and to the plan’s funding ratio — which is defined as the share of future obligations covered by current assets. 

South Dakota has a minimum COLA rate of 2.1, when plan funding level is below 80 percent and a maximum of 3.1 percent when the plan is funded above 100 percent. 

New hires should be transferred to a 401k plan that would increase employee contribution rates and allow them to have more control and portability over their money. 

By Increasing the employee contribution rate (which now is 9 percent), this would better balance contributions by taxpayers, which have increased eight times since 1990 versus only twice for employees. Only the legislature can authorize an employee contribution increase for PERS and haven’t done so since 2009. 

The state retirement system does not need to be unfunded. But it will require action.