An analysis of data by the Mississippi Center for Public Policy shows that a 15 cent gasoline tax increase would add up to about $123 annually per vehicle and a 20 cent per gallon tax hike would average about $180 annually per vehicle. 

For a family with two cars, that would be in the $250-$350 range each year.

When tallying up the cost of a potential gasoline tax increase on a family of four, the price would be much higher a month than the $6.67 increase cited by former state Supreme Court Justice Bill Waller Jr. 

His tax swap plan involving a state income tax bracket and the gasoline tax also would be only a tax increase on 42.8 percent of the state’s population who aren’t part of the state’s workforce.

Lt. Gov. Tate Reeves said the cost of a gasoline tax increase for a family of four would add up to about $500 per year, but achieving that figure would require three gas-guzzling trucks or heavy SUVs driving about 20,000 miles per year apiece and a gasoline tax of 15 to 20 cents more per gallon.

To calculate the average impact on a Mississippi driver annually, we used the top-selling vehicles in the state from both this year and a decade ago that included:

• 2019 Ford F-150.
• 2019 Nissan Altima.
• 2019 Toyota Camry.
• 2019 Honda Civic.
• 2019 Chevrolet Silverado.
• 2019 Chevrolet Tahoe.
• 2009 Ford F-150.
• 2009 Honda Accord.
• 2009 Honda Civic.

Then we calculated how many miles the average Mississippian drives per year. According to the U.S. Energy Information Administration, drivers in Mississippi traveled 40,877 million miles in 2017, ranking 28thnationally. Divide that by three million (the state’s population) and the average driver in the state drives about 13,625 miles per year. 

We also ran the numbers using 10,000 annual miles traveled per vehicle and 20,000 to see how much of a difference that makes.

Each vehicle’s U.S. Environmental Protection Agency rating for miles per gallon was used to calculate the average MPG that a Mississippi owner of that vehicle might face. 

The figure for MPG wasn’t the overall MPG, but an adjusted total that takes into account the amount of rural roads and highways with higher speed limits (84 percent of Mississippi roads are the responsibility of counties and the Mississippi Department of Transportation) and thus higher gas mileage. 

An owner of a Ford F-150 equipped with four wheel drive and the 3.5 liter turbocharged V-6 and driving 20,000 miles per year would pay $142 more per year and $11.83 more per month if the gasoline tax was increased by 15 cents per gallon.

The owner of a Nissan Altima that gets considerably better gas mileage (32.7999 miles per gallon) and drives 20,000 miles per year would still be higher than Waller’s stated figure at $7.60 per month and $91.47 per year with a 15 cent gas tax hike. 

Jacking up the gasoline tax to 20 cents per gallon would add up to $189 per year and $15.75 per month for the owner of the F-150 who drives 20,000 miles per year, while the Altima owner would pay $10.08 per month and $121 additionally per year.

Using the state Department of Revenue’s numbers on petroleum taxes, each one cent increase in the state’s gasoline tax would add up to about $23 million in additional revenue for the state’s highway fund, which is used for state-maintained roads only.

No tax swap for 42.8 percent of state’s population

Waller says eliminating the four percent income tax bracket and exchanging this for a gas tax hike would not be a tax increase. The problem is two-fold for this viewpoint.

According to U.S. Census Bureau data, the workforce participation rate in Mississippi is 57.2 percent, versus 63 percent nationally. Also, 15.9 percent of the state’s population is age 65 or older. 

This means 42.8 percent of the state’s population is not in the workforce and wouldn’t be subject to income tax, which exempts the first $2,000 of taxable income and taxes the next $3,000 at three percent, the next $5,000 at four percent and all taxable income more than $10,000 is taxed at a five percent rate. 

The state also doesn’t levy an income tax on retirement income, pensions and annuities, so that eliminates any tax relief for those age 65 or older.  

On Tuesday, the Jackson City Council tabled for future discussion a possible lawsuit against the Mississippi Department of Transportation over which entity has responsibility for maintenance of Medgar Evers Boulevard.

Jackson city Councilman Kenny Stokes said at the city council meeting that the city’s legal department could find no record of the city council approving the 1987 deal for MDOT to delegate maintenance of the road to the city. 

Stokes, who represents Ward 3, said if the item wasn’t placed on the city council’s agenda in 1987 and approved, the transfer wasn’t legally valid.

According to maps, U.S. 49’s route merges with Interstate 20 westbound in Richland and follows Interstate 220 north before resuming its northwest route at Medgar Evers Boulevard north of the interchange. 

Medgar Evers Boulevard isn’t marked as U.S. 49 south of the I-220 interchange.

 “I’m real concerned how the 49 highway in Rankin County can get over a hundred million dollars for the stretch from Richland to Flowood and it’s not even going to the school, Piney Woods,” Stokes said. “This is the gateway, the 49 highway, Medgar Evers Boulevard, to hospitals. 

“This is a sweetheart deal in Rankin County and you have a duty not to discriminate with federal funds. We’re also going to ask the U.S. Congress to get involved.”

MDOT is spending $150 million to repair and expand U.S. Highway 49 between Richland and Florence, with a completion date set for next year. The project will expand the heavily-traveled highway to six lanes between the two Rankin County cities with new culverts, curbs and bridges.

According to MDOT traffic counts, some of the intersections on 49 between Richland and Florence average about 42,000 vehicles per day.

The possible lawsuit was also supported by City Councilman Aaron Banks, who represents Ward 6

“If that agreement wasn’t executed right, then the state should be on the hook,” Banks said.

Mayor Chokwe Lumumba said at the meeting that the city’s 1 percent infrastructure sales tax is going to fund a repaving project on Medgar Evers Boulevard.

According to Public Service Commission Chairman Brandon Presley, four out of the state’s 26 electric power associations have decided to provide internet service to their electric customers.

The four non-profit co-operatives— Tallahatchie Valley, Tombigbee, Alcorn and Prentiss — that plan to provide high-speed fiber internet to the home are all located in northeast Mississippi in Presley’s district and made their announcements within the space of a week. 

The four co-ops that will provide internet service have about 99,000 combined customers, which represents about 5.5 percent of the 1.8 million mainly rural customers in the state who receive their electricity from one of the EPAs.

Tallahatchie was the first to announce the decision by its members on August 9 and plans to offer the service across its nine-county service area. The news release says it’ll take about 48 months for the system to come online.

Prentiss will pick a contractor in the next two weeks. 

“We’re going to beat this drum until every dirt road and every house and every rural community at the end of the line has the same level of service as a city,” Presley said. He compares high-speed internet service with electricity and says a similar effort like the one that electrified rural areas needs to come from the federal government to bridge what he terms a digital divide.

The Mississippi Broadband Enabling Act was signed into law by Gov. Phil Bryant on January 30 and went into effect immediately. The law allows the state’s 26 EPAs, also known as cooperatives, to provide broadband to their primarily rural customer base.

The new law requires EPAs to conduct economic feasibility studies before providing broadband services, maintain the reliability of their electric service, maintain the same pole attachment fees for an EPA-owned broadband affiliate as for private entities wishing to use the EPA’s infrastructure and submit a publicly-available compliance audit annually.

Presley, a Democrat who’s running opposed for his fourth term as the PSC’s Northern District commissioner, also said Mississippi needs more federal funds to expand rural high-speed internet service and that the EPAs won’t be asking the state legislature for any funds this year.

“I don’t believe we’re getting too much federal money in Mississippi to help our people. We’re not getting enough,” Presley said. “We need it more than they need it in Maryland. We need it more than they need it in New York and California. 

“We need it because we’re on the bottom of the economic ladder and until we solve the digital divide in this state, we’re not going to help our economic problems in Mississippi and we’re not going unlock the opportunities that our people deserve to have.”

According to data from the latest FCC wireless competition report from 2017, there is a digital divide in Mississippi. Ninety-five percent of urban residents in Mississippi have access to high-speed internet service (defined as 25 megabits per second or faster). 

In rural areas, only half of residents have access to that level of internet service. In 12 of the state’s 82 counties, five percent of the population or less has access to high-speed internet.

In 27 counties, only 25 percent or less of the population has high-speed internet service available.

Presley is the incoming president of the National Association of Regulatory Utility Commissioners, which is the nationwide trade association for public utility regulators. He said he’ll use that platform to help spread the word about the digital divide between rural and urban areas nationally.

Staying at a Rankin or Jackson County hotel or eating at a restaurant there can get quite expensive thanks to local tourism taxes.

The highest combined sales taxes on hotel stays and meals at restaurants were located primarily in Rankin and Jackson counties, according to examination of data from the Mississippi Department of Revenue. 

Of the eight cities statewide with total tax levies of 11 percent of more on hotel stays, five of them — Brandon, Florence, Flowood, Richland and Pearl — are in Rankin County. 

The Gulf Coast is also expensive for visitors when it comes to local taxes. All of the other cities on the 11 percent or more list, Pascagoula, Ocean Springs and Moss Point, are in Jackson County. 

Total sales tax on hotel stays in Harrison County, which includes Biloxi, Gulfport, D’Iberville and Long Beach, add up to 12 percent. 

These taxes are earmarked for the Coast Coliseum and Convention Center and the collections amounted to $4,893,319 in fiscal 2019.

There are 28 cities or counties statewide with a combined sales tax for hotels that adds up to at least 10 percent or more.

In Brandon, local and state taxes total 12 percent on hotels. The city levies a three percent tax on hotels that helped construct the city’s amphitheater. Brandon collected $1,224,801 in fiscal 2019 from its special tax.

Rankin County adds an additional two percent tax on hotels, along with the seven percent state sales tax. The county earned $973,495 from its special tax in 2019.

Like its Rankin County neighbors, Richland has a three percent tax on hotels and a two percent tax on restaurants, in addition to what the county assesses. The city earned $476,566 in 2019 from its special tax.

Pearl has two separate taxes. One is levied in the whole city (three percent on hotels and one percent on restaurants), while the other is additional tax (two percent) assessed in the western Pearl restaurant district, which is the area surrounding Trustmark Park and the Bass Pro Shop. 

Pearl collected $1,909,707 in fiscal 2019 from its special tax.

As far as restaurant taxes go, Como in Panola County has the highest combined rate at 11 percent thanks to the state’s highest tax rate, four percent.  

The city has a population of 1,310. According to DOR statistics, the city has collected $73,355 in fiscal 2019, which ended July 1, after earning $70,195 in 2018.

Twelve cities, including Vicksburg, Batesville, Hattiesburg, Jackson and Starkville, have total tax rates on restaurant sales of 10 percent.

The 73 special local levies on restaurants and hotels — the tourism taxes — began life as local and private bills in the legislature. Ten of them are assessed by counties and the rest by cities.

Local and private bills usually benefit a city or county in a legislator's district and are one of the last chores the legislature wraps up before leaving town at session's end.

All of the new taxes will require a referendum of local voters before they can go into effect and usually have an expiration date of three years from passage. Though not all. 

Revenues from these taxes are supposed to go to tourism promotion, such as for a convention and visitors’ bureau, or parks and recreation.

The same rules that govern the passage of general and appropriation bills apply to the local and privates. A three-fifths majority of both chambers are required to pass a new tax, which are pitched as temporary taxes when pitched in a referendum and are often re-authorized when they expire after three years without input from local voters.

Of the special taxes, 39 of them are listed on the DOR site without repeal dates, meaning local officials would have to act to get them off the books.

The local and private committees in each chamber of the Legislature are the only committees authorized by the Mississippi Constitution, with the rest mandated by legislative rules and state law.

The Office of the State Auditor uncovered a raft of issues with the Hinds County School District during a routine audit, according to a release by the office on Monday.

Some of those issues included $50,000 of improper expenses by the district’s finance officer Earl Burke, $54,000 in adjustments that needed to be made to reconcile the district’s bank statements, some credit card statements that weren’t reviewed by the district and $2 million worth of purchases of iPads and Apple laptops that didn’t use a competitive bidding process.

The release also said that auditors found that some spending records had been destroyed before they were reviewed.

Burke, according to audit, was responsible for $50,000 in unauthorized expenses that included:

• A personal car allowance that added up to $33,000 and was never approved by the district’s board.
• Used district funds to make personal purchases such as an in-air internet subscription, a stay in a luxury hotel suite and other unapproved expenses that totaled nearly $10,000.

The iPad and Apple laptop purchases went against state procurement laws, which require competitive bidding for most large purchases.

“This uncontrolled and unlawful administrative spending is not acceptable,” Auditor Shad White said. “It shortchanges teachers and students. It’s not fair for taxpayers. They all have a right to be angry about this kind of administrative spending.

“It results in money going outside the classroom and it violates our spending laws. I expect the district to take swift action to make sure this stops.”

In 2018, the Hinds County School District received more than $63 million in operating revenue, mainly from property taxes ($26.5 million) and state and federal funds ($26.2 million). The district went over its budget by $4.46 million in 2018. 

The district spent 44.7 percent of its budget on instruction, with 39.7 percent spent on support services and non-instructional expenses.

According to numbers released by the U.S. Department of Agriculture, the Mississippi Department of Human Services has the fourth lowest payment error rate nationally with the Supplemental Nutrition Assistance Program.

The low numbers could be a mirage, overshadowed by the state’s use of a consultant whose practices have gotten other states in trouble with the U.S. Department of Justice, which has settled with three states to repay $17 million in unearned bonuses for low error rates. DHS hired the consultant to improve error rates with the SNAP program and the firm earned $424,629 from taxpayers in contracts from 2011 to 2017.

Mississippi’s payment error rate was 2.43 percent on overpayments and 0.49 percent for a total error rate of 2.92. South Dakota was first with a total error rate of 1.04 percent, Idaho was second (2.13 percent) and Louisiana (2.7 percent) was third. The national error rate average was 6.3 percent and only 23 states equaled or were less than the national average.

The error rate in 2017 was 3.29, up from 2014 when the error rate was 1.16 (the USDA didn’t release complete error rate data for all state and territories in 2015 and 2016). States can receive monetary bonuses for low error rates and penalties for higher ones.

Mississippi received nearly $6 million in bonuses while utilizing advice from Julie Osnes Consulting from 2011 until 2017 and could have to pay the money back. The DHS paid her firm $246,270 for their final contract. Osnes agreed on June 18 to pay the U.S. $751,571 to resolve allegations of violations of the False Claims Act by causing states to submit false quality control data.

The way the errors are calculated is a multi-step process. State agencies first randomly select a sample of households that participate in the SNAP program, which adds up to about 50,000 nationally. The state agency staff interview participants and conducted a detailed review of the household’s eligibility. The states then calculate the number of errors. 

The USDA does a check of about 25,000 of the reviewed SNAP cases to assure that the state agency followed proper policy. The state agency then corrects the errors and the USDA analyzes the data to arrive at the national and state payment error rates.

According to the USDA, 60 percent of the errors are with a state agency. These errors can include errors in data entry or application processing or failure to do matching for citizenship, work status or other criteria for eligibility. Forty percent of the errors, according to the USDA, derive from recipients failing to report earnings, assets or expenses.

Taxpayers spent more than $728 million in Mississippi for SNAP for fiscal year 2019. 

Mississippi wouldn’t be the first state to run afoul with the DOJ for using Osnes as a consultant. Three states — Alaska, Virginia and Wisconsin — that employed Osnes as a consultant reached settlements with the DOJ in 2018. Virginia and Wisconsin paid $7 million apiece, while Alaska had to pay back $2.5 million. 

An investigation by the Department of Justice found that Osnes — who was paid by the state of Wisconsin to consult on their SNAP program — used "several improper and biased quality control practices" to lower its error rate and qualify for bonuses to which it hadn't earned. 

According to an archive of Osnes' now-shuttered website, Mississippi received $1.18 million in bonuses for fiscal 2013 for having the lowest payment error rate and $2.7 million in fiscal 2012 for lowest case and procedural error rates. 

Mississippi's first contract with Osnes was a two-year pact that began on October 1, 2011. She received $62,307 for her services in fiscal 2012. In fiscal 2013, her contract netted her consultancy firm $17,900. 

The state and Osnes reached an agreement on a new contract that started on February 2, 2014 and the firm received $53,152 for its work.

DHS continued the deal despite the U.S. Department of Agriculture's Office of Inspector General releasing a report on September 2015 that decried the use of consultants such as Osnes to help with quality control over household eligibility.

The state and Osnes entered another contract starting April 1, 2015 and ended on February 1, 2016, with Osnes paid $45,000 for her services. The department and Osnes reached terms on an extension that started when the first expired. The last payment of $29,541 was made on June 1, 2017 and no more subsequent payments were made, according to an examination of state records.

Nike doesn’t need state incentives to locate a new logistics facility in north Mississippi, but a medical supply business does to relocate to the same area.

Nike announced that it will add to its workforce of 3,200 at four Memphis-area facilities across the state line in Marshall County, just below the Tennessee city of Collierville and conveniently located on Interstate 269. The new facility is expected to open in spring 2020 and create 250 jobs related to logistics and supply chain.

According to Mississippi Development Authority spokesperson Tammy Craft, Nike will receive no subsidies from state taxpayers.

Medline Industries will bring 450 jobs to Southaven in DeSoto County and will receive $3.8 million from state taxpayers, with a $100,000 grant to relocate equipment and a $3.7 million grant for infrastructure, according to Craft.

The distribution hub will cost the company $46 million and the state said in the news release that some of the jobs will be existing positions filled by employees at its Memphis location, but that a large number will be created for Mississippi residents. That adds up to $8,444 per job.

Medline plans to begin operations in Southaven in early 2021.

"Medline's investment in the Southaven community and the creation of hundreds of new jobs marks the beginning of a long-lasting business partnership with the state of Mississippi and a long-term commitment to the people of DeSoto County," Gov. Phil Bryant said in a news release.

Earlier in February, DeSoto County received another heavily subsidized economic development project. German agricultural implement company Krone will receive a $7.3 million in property and inventory tax breaks, in addition to a $250,000 grant to relocate its equipment.

The company is moving its headquarters and 45 jobs across the state line from Memphis to Olive Branch.

Krone could also receive incentives that rebate some income taxes for its employees to the company, provided the workers are paid at least $37,521 annually. 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, or about $19,765 per job.

Medicaid expansion remains deeply unpopular with Mississippi voters, as recently released polling from Mason-Dixon finds and as Tuesday’s Republican primary results certainly did not dispel. 

This is perhaps surprising, given that many people don’t know much about Medicaid. This lack of knowledge has allowed politicians and others to try to sell Medicaid expansion as a cure all for many of Mississippi’s problems. To set the record straight, Medicaid is not a very good parachute for rural hospitals. It’s also not a very good way to boost the state’s economy. Medicaid is not even going to improve health care outcomes for the working poor. Medicaid expansion is going to be far more expensive than anyone predicts. It is also going to squeeze out funding for other priorities, like K-12 education and roads.

In order to understand what Medicaid is, we need to understand who benefits from it. One would think Medicaid most benefits the patients enrolled in it. The academic research indicates otherwise. To understand why, we have to acknowledge that merely holding a Medicaid insurance card does not guarantee health care. Medicaid is not health care; it is a government-subsidized health insurance plan. Compared to private insurance, however, Medicaid insurance is not very good. To begin with, it’s expensive: not for the people on Medicaid, but for the taxpayers who subsidize it. Second, many doctors don’t accept Medicaid because it pays less than private insurance and, sometimes, less than self-paying patients. 

The Affordable Care Act (Obamacare) made a very expensive bet that one group, in particular, would benefit from expanding Medicaid. As it turns out, this bet was wrong. It’s instructive to realize who the ACA did not expand Medicaid coverage to. Not low-income children, who are already covered under a program called CHIP. Not disabled people, many of whom are languishing on home and community based Medicaid waiting lists. Not the elderly, who are already eligible for Medicare. Rather, the ACA expanded Medicaid to able-bodied, working-age adults earning up to 138 percent of the federal poverty level.

Every one of these people already have access to health care, thanks to a federal law called EMTALA, which requires hospitals to treat anyone who enters an emergency room, regardless of ability to pay. Substituting Medicaid coverage for EMTALA coverage will not change the quality of care for most of these patients. Thus, researchers have found that Medicaid expansion “increased the use of health-care services,” but “had no statistically significant effect on physical health outcomes.” In turn, the same team of Ivy League researchers concluded that the primary beneficiaries of Medicaid expansion are hospitals. 

Basically, Medicaid expansion is a backdoor mechanism Mississippi hospitals hope to tap into to pay for the unfunded mandate that is EMTALA. The trick for the hospitals is that Medicaid does not pay very well. Thus, their goal is to steer Medicaid patients toward lower-cost services that will provide a larger profit margin. For some hospitals, this will work. For others, it won’t. The hospitals are willing to roll the dice on Medicaid expansion, but Mississippi voters are not.   

Recent polling by Mason-Dixon found that 55 percent of Mississippi Republican primary voters are less likely to support a candidate who votes for Medicaid expansion. This number soars to 70 percent when voters realize that Medicaid expansion will compete for funding with other priorities, like K-12 education, roads and bridges, and the state retirement system. I believe these voters intuit that Medicaid expansion is a bad bet – not because they don’t care about low-income adults or rural hospitals or poor children (who, again, are already covered by SCHIP!).

Mississippi voters care about all these issues, they just think there are more targeted ways to help each of these groups. Consider that the best way to help the working poor is to encourage them to obtain a good job. Yet, nationwide, more than half of Obamacare Medicaid recipients are not working.

Is it any surprise, then, that Medicaid expansion has been far more expensive than expected in the states that have tried it? According to analysis by Jonathan Ingram and Nicholas Horton, “States have consistently and grossly missed their expansion enrollment projections, already signing up more than twice as many able-bodied adults than they anticipated would sign up at any point in the future.” As a result, Medicaid is squeezing out other state budget priorities, consuming “one out of every three dollars in state budgets.” This includes Indiana, whose 2.0 “reform” cost more in year one than a traditional expansion would have cost and is forcing lawmakers to find new sources of revenue via tax and fee increases. It also includes Arkansas, whose Medicaid expansion cost almost twice as much as predicted, far more than traditional expansion, and whose attempts to rein in costs with a work requirement have been nullified in court.

If state lawmakers want to help rural hospitals, they should craft a credible plan to do so. Likewise, there are many ideas – ranging from deregulating charity care to encouraging nonprofit hospitals to do their fair share – that could increase health care access for low-income, able-bodied adults. Throwing Medicaid money at these problems would be a lazy, foolish, and expensive gamble. Mississippi voters know better.

This column appeared in the Clarion Ledger on August 11, 2019. 

New polling shows that Republican voters in Mississippi oppose expanding Medicaid and are less likely to vote for candidates for office who support expansion.

The poll, conducted by Mason-Dixon Polling & Strategy, found that 55 percent of Republican voters would be less likely to vote for a candidate who supports Medicaid expansion. Just 26 percent would be more likely. 

“Republican voters are not buying the lie that Mississippi needs to expand Medicaid to able-bodied adults,” said Jameson Taylor, Vice President for Policy at Mississippi Center for Public Policy. “Even the lipstick-on-a-pig Medicaid expansions in Indiana and Arkansas are costing far more than expected, leading to tax and fee increases. Medicaid is a budget buster that will radically reduce available funding for K-12 education and roads and bridges.”

When voters were then told that Medicaid expansion has generally cost millions more than expected, which has resulted in tax or fee increases, along with increased competition for general fund priorities like education or infrastructure, opposition to expansion increased even further.

Republican voters, by a 70-13 margin, said they would be less likely to support a candidate who favored Medicaid expansion. 

“Medicaid is the worst form of welfare there is,” Taylor added. “Unlike other forms of welfare, like Food Stamps, the courts won’t let states require that able-bodied Medicaid recipients work or volunteer. There are also no time limits. 

“Medicaid expansion is a welfare trap, which is why more than half of expansion enrollees are not working. Medicaid expansion would deny these people of the American dream, the promise that with hard work and grit anyone can be a success in America.”

The full poll results can be found here.