Amazon is bringing another of its distribution hubs, known as fulfillment centers, to north Mississippi and will receive $2 million in infrastructure funding and local tax breaks to do it.

The online retail giant announced this week that’ll bring the fulfillment center to Olive Branch that will eventually employ 500 workers.

According to Mississippi Development Authority spokesperson Melissa Scallan, taxpayers will provide $2 million in road improvements for the facility. Also, Desoto county will negotiate a fee-in-lieu agreement for the project which will likely involve the fulfillment center’s property taxes. 

According to the release from the MDA, the million-square-foot warehouse will ship large customer items such as sports equipment, patio furniture, kayaks and bicycles.

“This announcement serves as a shining example to industry leaders around the globe that Mississippi plays to win,” Gov. Phil Bryant said in an MDA news release. “We offer a supportive business climate and integrated transportation network so companies with shipping needs, such as Amazon, can reach their customers in rapid time and remain a step ahead of their competition.”

Some of the other taxpayer-funded economic development projects in Desoto county include:

• Medline Industries will receive $3.8 million from state taxpayers to build a medical supply distribution center Southaven in Desoto county that will employ 450.
• German agricultural equipment company Krone, which moved its headquarters and 45 jobs across the state line from Memphis to Olive Branch, will receive $7.3 million in property and inventory tax breaks in addition to a $250,000 equipment relocation grant. The company could also receive some income tax rebates that could add up to $675,000 annually over the next decade.
• O’Reilly’s Auto Parts will receive $300,000 to transform a 580,000-square foot warehouse into a new distribution center that will employ 380.

From 2012 to 2017, taxpayers have spent $678 million in just MDA grants alone from 2012 to 2017.

Select incentives for a few may generate headlines or photo-ops, but it does not generate sustained economic growth. 

Economic development policy really means the state picking the winners and losers by employing direct subsidies and tax breaks to attract or promote specific businesses or industries. An authentic effort to grow our economy would not focus on giving targeted companies the assistance and resources without providing those to all companies and industries. 

It is not fair to the current companies in Mississippi, who built their businesses without government help, to find themselves competing with companies subsidized by taxpayers. For too long, Mississippi has followed a policy that supposes “economic development” can be a meaningful driver of economic well-being in the state. It cannot. That policy is a losing one.

The evidence produced from analysis points convincingly to the conclusion that these targeted incentives do not produce long-term benefits in excess of their costs. In many cases, the cost-per-job is extraordinarily high. While some high-profile companies and their political allies may be better off, non-beneficiary companies may lose workers or experience wage increases, or both, and the state’s economic activity as a whole slows.

When political favor seeking is emphasized like this, it thwarts the private sector and tips the scales in favor of those companies and individuals with access to political relationships. It sends a message to the private sector that it should not focus on consumer-oriented actions, like product/service innovation or marketing, and focus resources instead on lobbying, legal representation, and elections. That’s not a recipe for sustained economic growth.

And we should also acknowledge the opportunity costs of corporate welfare. By eliminating corporate welfare, Mississippi, and every state in the nation with income taxes, could reduce their personal and corporate income taxes for everyone. Or, the money that is sent to select industries could instead be used for infrastructure, healthcare, education, law enforcement, or other basic functions of government. 

Rather than increase the hand of government in our economy, we should trust the “invisible hand” of the marketplace and the proven incentive of profit and loss for the allocation of resources. 

Public school enrollment declined for the eighth straight year in the state, according to new data from the Mississippi Department of Education. 

This year, 465,913 students are enrolled in public schools, including both district schools and the 2,100 students in charter schools. This represents a drop of about 5,000 students or 1 percent of enrollment compared to the 2018-2019 school year. Enrollment is down 5 percent over the past five years. 

The numbers would show a greater decline, but for taxpayer-funded prekindergarten. This year, prekindergarten enrollment totaled 8,339. Four years ago, it was 5,961. 

Enrollment peaked at 494,590 during the 2004-2005 school year and hovered at or above 490,000 students as recently as five years ago. 

At the same time, education funding has increased or held steady meaning we continue to see the spending per student increase. Last year, Mississippi topped $10,000 per student for the first time and that number will tick up this year. 

Among school districts in the Jackson area, the suburban districts of Rankin County School District and the Madison County School District have long enjoyed growth in enrollment to match population growth in their counties, but that may be slowing.

In Rankin County, there has been a decline of about one percent in student enrollment over the past five years despite the county growing by about three percent during the same time period. Still, Rankin County remains the third largest district in the state with 19,160 students.

Madison County School District enrollment stands at 13,310. This represents a growth of just eight students over the past year, a small number for a district that has grown by 15 percent over the past decade. 

Enrollment in the Pearl School District grew from 4,257 to 4,366 while it remained relatively steady in Clinton at 5,306. It was 5,310 last year. Hinds County School District’s enrollment stands at 5,578, a decline of more than 10 percent in the past five years. 

But the district that continues to lose the most students each year is the Jackson Public School District. Enrollment is down to 22,510, a six percent drop from just the past year. Enrollment is down 20 percent in just the five years. JPS is also the school district most impacted by parents having the ability to choose charter schools for their children. 

A report released today by state Auditor Shad White’s office says taxpayers spend more on administrative costs for K-12 education than most of the other southern states.

Mississippi spent 28.74 percent of its K-12 expenditures ($4.2 billion annually with local, state, and federal funds included) on expenses outside the classroom, with only Oklahoma, the District of Columbia and Texas being higher. 

Outside the classroom spending is divided into two subcategories of general and school administration and these costs include spending on salaries and benefits for administrators such as superintendents, principals and their staffs, district board expenses, operations and maintenance, legal services, and non-student travel.

According to the report, Mississippi spent 9.38 percent of its education budget in 2016on general and school administration spending, second only in the South to the District of Columbia (15.27 percent). Florida spent the least as a percentage of its budget (6.41 percent). 

If Mississippi spent as much of its K-12 budget on classroom-related costs as the state that keeps the highest percentage of its budget in the classroom, Maryland, there would be $250 million available to spend on everything from teacher pay raises to supplies.

According to the report, Mississippi spent an average of 8.87 percent of its K-12 expenditures on general and school administrative spending from 2006 to 2016.

Conversely, the average percentage spent in the classroom by Mississippi taxpayers was third-lowest among the 16 states, which averaged 71.26 percent of their appropriations for K-12. 

Mississippi spent 71.26 percent of its expenditures in the classroom, a drop from 2006 when classroom expenses added up to 72.29 of all spending on K-12.

The Office of State Auditor recommends that districts evaluate methods by which they can streamline or cut outside-the-classroom spending. White’s office also recommended that the MDE lessen its regulatory burden on districts to cut down on administrative costs due to compliance with mandates.

Mississippi is no longer the state most dependent on federal aid as a percentage of its budget.

The only reason the Magnolia State went down in the rankings is because three other states vastly increased their dependence, not because lawmakers in Mississippi were able to wean the state off federal aid.

The recent analysis from The Pew Charitable Trusts reveals that, on average, nearly one third of state revenue came from the federal government in 2017, a near 50-year high. Federal grants helped states pay for healthcare, social services, education, transportation, and other infrastructure. 

In the last four years on average, 44.38 percent of Mississippi’s budget came from federal funds.

Montana was the leader in federal funds, with 46.1 percent of its revenues coming from that source. Wyoming (44.5 percent) was second, Louisiana (43.7) was third and Arizona (43.1 percent) was fifth.

Only two of those states — Mississippi and Wyoming — have not expanded Medicaid under the so-called Affordable Care Act (also known as Obamacare) to able-bodied, working adults.

Hawaii (20.7 percent), Virginia (21.1) and Kansas (23.3) had the lowest shares of their revenue coming from federal funds.

On average, the share of state budgets nationally that came from federal funds added up to 32.4 percent.

Mississippi was one of seven states were federal funds were the largest revenue source, outstripping state tax revenues. The others included Alaska, Arizona, Louisiana, Montana, New Mexico, and Wyoming.

Federal funds represent about 45 percent of Mississippi’s total budget

In the fiscal 2020 budget, 44.5 percent of Mississippi’s revenues ($9.38 billion out of $21 billion) came from federal funds. In fiscal 2019, 44.9 percent of the state’s revenues ($9.37 billion out of $20.86 billion) originated from federal funds.

According to the analysis, 26 states had declines in their share of revenues coming from federal dollars. The trend, however, was that federal funds as a percentage of state budgets were at the fourth-highest level according to Pew data going back to 1961.

In 2017, federal dollars accounted for $639 billion of the $1.97 trillion in revenue collected by state governments.

Taxpayers will pay $300,000 to bring a distribution center for auto parts retailer O’Reilly Auto Parts to Horn Lake in Desoto County in north Mississippi.

According to Mississippi Development Authority spokesperson Tammy Craft, the agency will provide a $250,000 grant for workforce training and a $50,000 grant for equipment installation.

The company will refit a 580,000-square foot warehouse purchased in February at the DeSoto 55 Logistics Center and will create 380 job. Horn Lake will also provide property tax exemptions. 

O’Reilly Auto Parts is moving its distribution center, one of the 27 it has nationally, from Little Rock, Arkansas to Horn Lake. Missouri-based O’Reilly Auto Parts has 5,000 stores in 47 states and will convert the former Little Rock distribution center into what it callsa super hub store.

In a news release, MDA executive director Glenn McCullough Jr. said that Mississippi’s location in the center of the Southeast provides strategic advantages for the company.

Gov. Phil Bryant said the announcement marks 1,300 state-assisted jobs that have been created via various projects in Desoto County. 

These projects include:

• Medline Industries, which will bring 450 jobs to Southaven in DeSoto County and will receive $3.8 million from state taxpayers to build a medical supply distribution center.
• German agricultural equipment company Krone, which moved its headquarters and 45 jobs across the state line from Memphis to Olive Branch, will receive $7.3 million in property and inventory tax breaks in addition to a $250,000 equipment relocation grant. The company could also receive some income tax rebates that could add up to $675,000 annually over the next decade.

From 2012 to 2017, taxpayers have spent $678 million in just MDA grants alone from 2012 to 2017.

Select incentives for a few may generate headlines or photo-ops, but it does not generate sustained economic growth. 

Economic development policy really means the state picking the winners and losers by employing direct subsidies and tax breaks to attract or promote specific businesses or industries. An authentic effort to grow our economy would not focus on giving targeted companies the assistance and resources without providing those to all companies and industries. 

It is not fair to the current companies in Mississippi, who built their businesses without government help, to find themselves competing with companies subsidized by taxpayers. For too long, Mississippi has followed a policy that supposes “economic development” can be a meaningful driver of economic well-being in the state. It cannot. That policy is a losing one.

The evidence produced from analysis points convincingly to the conclusion that these targeted incentives do not produce long-term benefits in excess of their costs. In many cases, the cost-per-job is extraordinarily high. While some high-profile companies and their political allies may be better off, non-beneficiary companies may lose workers or experience wage increases, or both, and the state’s economic activity as a whole slows.

When political favor seeking is emphasized like this, it thwarts the private sector and tips the scales in favor of those companies and individuals with access to political relationships. It sends a message to the private sector that it should not focus on consumer-oriented actions, like product/service innovation or marketing, and focus resources instead on lobbying, legal representation, and elections. That’s not a recipe for sustained economic growth.

And we should also acknowledge the opportunity costs of corporate welfare. By eliminating corporate welfare, Mississippi, and every state in the nation with income taxes, could reduce their personal and corporate income taxes for everyone. Or, the money that is sent to select industries could instead be used for infrastructure, healthcare, education, law enforcement, or other basic functions of government. 

Rather than increase the hand of government in our economy, we should trust the “invisible hand” of the marketplace and the proven incentive of profit and loss for the allocation of resources. 

A report by a legislative watchdog says the Tunica County Board of Supervisors needs reforms to its procedures to ensure that it doesn’t engage in deficit spending and complies with state law on various issues.

The Joint Legislative Committee on Performance Evaluation and Expenditure Review (PEER Committee) issued the report in light of budgetary concerns that included:

• A $4.3 million deficit from October 1, 2012 to August 31, 2019.
• The county’s general fund had a negative balance of $4.9 million and the report says the county was using its road fund to pay expenses in contravention of state law.
• In April 2018, the board transferred $5 million to the general fund from its road funds, a practice also contrary to state law. An opinion from the attorney general informed the board that the transfer wasn’t permissible, but the board didn’t authorize repayment of the $5 million to the road fund until PEER began its investigation.
• The county assessed a nine-mill property tax for the road fund in 2015 and overtaxed county residents by $5.5 million from 2015 to 2017 because it was inaccurate in its projection of future road maintenance and construction expenditures.
• Minutes of the board’s meetings didn’t always specify why the body went into executive session as required by law.
• In fiscal 2014, the county was forced by a court order to refund $190,000 to one taxpayer after being in non-compliance with state law on the issuance of tax levies.

Tunica County revenues declined because of declining gaming fee expenses, falling 26 percent between 2013 and 2018. The county received 62 percent of its revenues during the same span from gaming fees.

The county has six casinos, down from a high of nine in 2014.

The report says there are also problems with the way the county spends taxpayer funds.

The board has an arrangement with the North Delta Regional Housing Authority on a program to build and rehabilitate homes in the county for the elderly and handicapped, but had no signed contract either between the NDRHA and the county. 

The county later moved all administrative and operational responsibilities for the program to the non-profit Tunica County Housing Inc. in 2014.

The board voted to appropriate $1.6 million from county taxpayers to the organization, with no supporting documentation on how the funds were expended or whether any work. The Tunica County Housing Inc., which was involved in the program, spent 41 percent of its budget ($681,000) provided by taxpayers on administrative costs. 

The Better Business Bureau and the Charities Review Council both agree that administrative costs shouldn’t exceed 35 percent for a grant-issuing organization.

The county’s attorney, John Keith Perry Jr., blasted the report in his response letter that PEER includes from examined agency or subdivision. 

He said that county officials only had two “small windows of four hours” to review and respond to the PEER report, less than what had been given to other agencies in the past. He also accused PEER of being focused on “a few hot-button issues of a political nature.”

 He also said the county reserves the right to do a more thorough response when allowed to study the full and final report.

Officials from a pro-abortion group working with the Mississippi state Department of Health offered to give county health clinics a free iPad for encouraging participation by pregnant women in a study, who also received a participation gift.

Provide Inc. is a Cambridge, Massachusetts-based pro-abortion group that was brought in by former State Health Officer Dr. Mary Currier in June 2017 to get the state in compliance with mandates regarding Title X, a federal family planning program that provided the state with more than $10 million over the past two years. 

These Title X mandates included options counseling, which included abortion, for pregnant women using services at county clinics. 

The Provide survey was intended to gather data for MDH and the pro-abortion group on services received, quality of option counseling (which included abortion) and demographics. The survey began on April 19, 2018 and was closed on June 20 after a federal court decision.

The study was conducted on iPads exclusively loaded with the survey materials and provided to 14 clinics statewide. The goal was for Provide and MDH to survey 400 pregnant women. The clinics would get to permanently keep their iPad if they got an 85 percent completion rate.

According to the last data from the emails obtained by the Mississippi Center for Public Policy, 345 women completed the survey.

The pregnant women received a $15 gift card to Target for participating in the survey on the iPad. If they agreed to do an interview with a Provide staffer two weeks later, they received a $40 gift card.

According to an email, Provide intended to use the data to further its training program, while the MDH’s goal was to determine if Provide training helped with options counseling for pregnant women. The survey was aimed at adult, English-speaking pregnant women, with non-English speakers and minors excluded.

On April 25, State Health Officer Dr. Thomas Dobbs told his employees to “remove all educational material samples left by the group Provide.” He later said that some of the materials were seen at a local county health department and that they weren’t approved for use at MDH.

He gave instructions that all Provide materials were to be removed by May 1 and that any found were to be reported. 

One of his subordinates told him and other officials that Provide held training in Jackson and that some of those employees at the training were provided some materials on site as resources.

On May 6, a 16-year-old pregnant girl completed the survey in Rankin County and received a gift card. Provide removed her information from the survey and the clinic received additional training in eligibility screening. 

State officials, most notably Marilyn Johnson, who is the MDH’s director of Family Planning and Title V Maternal Child Health, were in constant contact with Provide employees during the study period providing updates on study participant numbers. 

There are several reminders to the participating clinics that Provide materials were not approved by the MDH. Other emails requested the charging of iPads. One clinic director was asked if she was refusing to participate in survey and Provide employees wondered if someone else at the clinic could do it instead.

MDH received $4,522,634 in fiscal 2019, $5,520,200 in fiscal 2020 and will likely receive $4,100,000 in fiscal 2021 from the Title X grant program.

According to its 2018 IRS Form 990 tax form, Provide “focuses on making sustainable improvements to abortion access where it is needed most in rural communities in the South and Midwest.”

The group said in the 990 that it held training sessions at 630 health and social service sites in states where “women seeking abortion face particularly high barriers to accessing care.” The organization also said that its goal was to increase “trainees’ intention to provide referral for abortion by 69 percent.”

The states listed, in addition to Mississippi, included Alabama, Colorado, Florida, Illinois, Kentucky, Louisiana, North Carolina, Nebraska, New York, Ohio, Oklahoma and Tennessee. 

The 9th Circuit of the U.S. Court of Appeals issued a stay on the injunctions on the Trump administration rule, allowing it to go into effect, while it considers the merits of the legal challenges. Oral arguments in the case were held on September 23.

Planned Parenthood has pulled out of the Title X program as a result of the new rule.

Mississippi’s tax climate dipped slightly last year as it remains in the both half nationally.

The Tax Foundation placed Mississippi 31st overall for taxes, including corporate, individual, sales, property, and unemployment insurance taxes. The only neighboring state to do better was Tennessee. Alabama, Louisiana, and Arkansas were rated 40, 41, and 46 respectively. 

Wyoming was again the top-rated state, followed by South Dakota, Alaska, Florida, and Montana. The bottom five states, beginning with number 50, were New Jersey, New York, California, Washington, D.C., and Connecticut. 

According to the Tax Foundation, the top states share a few similarities. 

“The absence of a major tax is a common factor among many of the top 10 states,” according to the report. “Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate income tax, the individual income tax, or the sales tax. Wyoming, Nevada, and South Dakota have no corporate or individual income tax (though Nevada imposes gross receipts taxes); Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire, Montana, and Oregon have no sales tax.”

Mississippi dropped a spot from last year. The state received its best marks for unemployment taxes (5th best) and corporate taxes (10th best). The corporate tax component measures impacts of states’ major taxes on business activities, both corporate income and gross receipts taxes. The unemployment insurance tax component measures the impact of state UI tax attributes, from schedules to charging methods, on businesses.

Mississippi’s worst tax categories were property and sales. It would be a good idea to lower our business tax burden on land, buildings, equipment, and inventory.

Mississippi has begun phasing out its capital stock tax, following an exemption added in 2018 with the first-rate reduction, from 2.5 to 2.25 mills, in 2019. The tax will slowly phase out through 2028, but the modest rate reduction is not enough to move the needle on Index rankings. 

Voters in the Leland School District rejected a bond measure in September when it failed to receive the necessary 60 percent of the vote for approval. The Leland School Board has set December 10 for a re-vote. 

The price of the bond to taxpayers will decrease from $8.75 million to $6.9 million, according to the Leland Progress. 

While some have used this to decry the crumbling facilities or complain about state funding, one major issue should be addressed before moving to others: The district had 776 students last year. 

That’s the size of a high school, or maybe one school, but you shouldn’t be expected to run and finance a school district of that size in a poor part of the state with little infrastructure. 

Because as some talk about the challenges the district faces, this school district spends among the most per student in the state. According to the last audit of the district, it spent $13,523 per student. The state provides about 57 percent of funding for the district. 

The cost per student and the state’s share of funding is considerably more than districts like Madison, Clinton, or Rankin. 

It’s also considerably more than tuition at nearby private schools: Washington School is $6,792 for high school, it’s $5,395 (for Catholic students) and $6,395 (for non-Catholic students) at St. Joseph Catholic School, $5,775 at Indianola Academy, and $5,600 at Greenville Christian School. And I am guessing they don’t have problems with leaking roofs or air conditioning despite being about half the price. 

Washington county’s population is about 46,000. It was over 72,000 in 1980. But it’s still home to four school districts. The Greenville School District is the largest with about 5,000 students. But you then have Western Line School District, with 1,851 students, the tiny Hollandale School District, with 581 students, and Leland. 

Washington county school districts

Over the past eight years, the state legislature has adopted 10 separate consolidation bills impacting 21 different school districts. By 2021, the state will have 13 fewer school districts than in 2014.

Washington county has yet to be part of that mix. Local residents may love their local school districts. Local legislators will continue to fight as hard as they can. And a bond, if successful, will be funded by those local residents. 

However, at the end of the day, the school district gets the majority of its money from the state, meaning taxpayers throughout the state, not just Leland residents. And taxpayers have a right to know if their money is being spent wisely. A consistently underperforming school district with 776 kids that spends over $13,000 per student? I don’t know if that should be considered wise, especially when there are other options. 

Mississippi’s school districts are inefficient compared to other Southern states 

The issue isn’t just Leland. School districts in Mississippi serve a lower number of students, on average, than every other state in the Southeast, save for Arkansas. What does that mean? We are spending money on additional salaries, pensions, benefits, buildings, etc. that other states are not. This means less money in the classrooms.

Source: National Education Association, “Rankings & Estimates 2014-2015”

The average district size among the 12 states was 9,467, almost three times the size of the average district in Mississippi. For Mississippi to be in line with that average, the state would need to see a reduction to 52 school districts, eliminating almost two-thirds of the districts in the state.

Florida is the biggest outlier in this group. Removing the Sunshine State from the mix would drop the average district size to 6,513. Even doing that, Mississippi would still need to drop to 75 districts to be at the average. That is a reduction of almost 50 percent.

Among neighboring states, if school districts in Mississippi were to serve the same number of students as school districts in Alabama, Mississippi would need to experience a reduction to 91 districts. To mirror Louisiana, Mississippi would need a reduction to 86 districts. And to match the same number of students per district as Tennessee, Mississippi would need a reduction to 73 districts. Either of these changes would represent a decrease of 40 to 50 percent of the districts in the state.

Additionally, the districts in Mississippi are largely unbalanced. Half of all public school students in the state attend school in one of just 28 school districts. Yet, 63 districts have less than 2,000 students and educate just 16 percent of students.

There is not a magic size for a district. There are poor performing large districts, starting with Jackson Public Schools, just as there are high-performing small districts. But this inefficient distribution of students, which results in excessive bureaucracy, costs taxpayers money and prevents dollars from making it to the classroom.

While there is overwhelming local pressure to oppose consolidation, the legislature should continue with the process of protecting taxpayer dollars and reducing the number of school districts in Mississippi.