According to an analysis of data, the nation’s second-most popular vacation destination state receives a slim majority of its gasoline tax revenue from tourists.

Florida received about 50.42 percent (more than $822 million) of its 2018 gasoline tax revenue ($1.631 billion) from out of state visitors. Last year, 126.1 million tourists visited the Sunshine State.

In comparison, Mississippi receives about 10 percent of its gasoline tax revenue (more than $423 million in 2018) from its 19,152,000 visitors. 

The state of Florida’s gasoline tax varies by area and is indexed to the general rate of inflation computed by the Consumer Price Index every January. Municipalities and counties can add their own tax, up to 12 additional cents per gallon, for local infrastructure. 

According to the American Petroleum Institute, a weighted average for Florida would be about 41.99 cents per gallon, which is ranked ninth highest by the non-partisan Tax Foundation.

Alabama, which had more than 27 million visitors in 2018, receives about 16.2 percent of its gasoline tax revenue from out of state visitors. In 2018, the state received more than $477 million from its 21.21 cent per gallon gasoline tax, with more than $77 million coming from tourists visiting the state.

The Alabama legislature passed and Gov. Kay Ivey signed into law a 10 cent per gallon tax increase that will bump the Yellowhammer State’s ranking from 41st to 21st, which is where Georgia sits (31.59 cents per gallon) at present. The tax hike will be phased in over the next three years.

Running the numbers for Alabama results in a same proportion of fuel tax paid by tourists (16.2 percent), but adds more than $36 million to the state’s gas tax revenues, which could increase by more than $224 million annually.

Louisiana, which had more than 51 million visitors in 2018, received about 16.5 percent of its gasoline tax revenue (more than $459 million in 2018) from out of state visitors, which adds up to more than $75 million. Louisiana’s gasoline tax is 20.01 cents per gallon.

The way we calculated the amount of gasoline tax paid by out of state visitors was based on tourism numbers from each state’s tourism agency. For overnight visitors, we used the occupancy rates at state hotels and multiplied by 365 and subtracted it from the total number of visitors.

We used an average of 24.7 miles per gallon for the average U.S. vehicle and an average round-trip distance (1,240 miles) for out-of-state travelers. We also assumed that any visitor, be they an overnight or day tripper, would buy about 35 percent of their gasoline in their destination state.

A non-profit organization in Mississippi that was founded in partnership with five of the state’s universities has given more than $2.5 million since 2008 to out-of-state entities for consulting and research.

The Delta Health Alliance is a non-profit organization that receives most of its revenues from government grants and manages 52 education and healthcare programs in the impoverished Delta region in Mississippi.

In 2016, the DHA gave to $443,946 to the Urban Child Institute, a 501(c)(3) non-profit organization based in Memphis, for what it termed on its IRS tax forms as evaluations. In 2015, the organization gave the Institute $351,091 and $380,200 in 2014 for what it termed “evaluation management.”

The Urban Child Institute says it’s dedicated to promoting the health of children in Memphis and Shelby County (Tennessee). It receives grants from both the University of Memphis and the University of Tennessee, plus the Lebonheur Children’s Hospital Foundation. 

Delta Health Alliance CEO Karen Matthews worked 19 years at the University Of Tennessee Health Science Center.

The University of Illinois received money for four years of consulting services. In 2013, the DHA gave the university $108,008, with $114,636 provided in 2012, $246,672 in 2011 and $137,804 in 2010.

Mathematica Policy Research Inc. received three grants from DHA, with the first in 2008 ($160,000) for external evaluations, the second in 2010 ($313,108) and the third in 2011 ($244,618) for program research.

Princeton, New Jersey-based Mathematica describes itself as a pioneer behind research and policy advancements in health, education, child welfare, criminal justice and other areas, partnering with federal agencies, state and local governments, foundations and universities.

The DHA administers two Promise Neighborhoods (an Obama era U.S. Department of Education program), a medical clinic, headstart programs, anti-obesity and anti-smoking programs among others. 

The organization receives grants from the U.S. Department of Health and Human Services, the U.S. Department of Agriculture and the U.S. Health Resources and Services Administration. 

DHA’s CEO Matthews has averaged more than $350,000 in pay, bonuses and benefits annually over the last seven years.

The majority of state’s gasoline tax was paid for by Mississippi residents from 2012 to 2018, according to an analysis of tourism data from the Mississippi Development Authority and the Department of Revenue.

Out-of-state visitors accounted for only 10.02 percent of the state’s gasoline tax revenues, on average, from 2012 to 2018. 

According to data from the DOR, the state averaged more than $419 million per year from 2012 to 2018 in gasoline tax revenue and an average of more than $42 million per year originated from out-of-state visitors.

According to the MDA’s tourism economic impact report from 2018, 24 million visitors participated in the state’s economy. Of those, 20.2 percent came from Mississippi, leaving 19,152,000 from out of state.

Of the remainder, 11,874,240 booked a stay overnight in the state, while 7,277,760 just did a day trip.

We used an average of 24.7 miles per gallon for the average U.S. vehicle and an average round-trip distance (1,240 miles) for out-of-state travelers.

Assuming that the out-of-state traveler purchased 35 percent of their gasoline in Mississippi on their trip, that adds up to about 17.57 gallons bought at Magnolia State gas stations. That would add up to about $3.30 in gasoline tax paid per out-of-state, overnight vacationer.

As for day trip enthusiasts, they would likely purchase (assuming that they bought 35 percent of their fuel in this state and 24.7 miles per gallon) about 3.4 gallons per trip into Mississippi.  That adds up to about 64 cents of gasoline tax.

All tourism-related gasoline tax revenues in 2018 would add up to $52,460,176 and removing 20.2 percent of them to account for in-state residents leaves a total of $43,644,073.

Taxpayers will spend $1,105,236,550 on the Mississippi Department of Transportation, with $559 million coming from federal funds and the rest from the state’s petroleum tax. 

The Office of State Aid Roads will have an appropriation of $225,410,848 from special and federal funds, which will help maintain 25,857.04 miles of county roads that are considered “feeder” routes between the state highways. This money also goes to maintaining 5,368 bridges on these routes.

Right now, drivers in Mississippi pay 37.19 cents in state and federal taxes on every gallon of gasoline, about 11 cents a gallon less than the national average. The state’s gas tax was last increased in 1987. 

The federal gas tax has been 18.4 cents per gallon since 1993. For every one cent increase, the state’s gasoline tax revenue ($423,642,449 in fiscal 2018) would increase by about $23 million.

Continued discussion over a possible gasoline tax increase is seemingly ignoring the passage of a $300 million infrastructure package in the special session last summer.

The Mississippi-raised CEO of the United Parcel Service, David Abney, said at the Delta Council’s annual meeting last week that he supports both a state and federal gas tax increase.

Republican gubernatorial candidate Bill Waller Jr. said he is also supportive of a gas tax hike, coupled with a possible tax swap that could include a reduction in the state’s income tax. House Speaker Philip Gunn (R-Clinton) proposed a similar plan last year.

The Mississippi Infrastructure Modernization Act of 2018 will send 35 percent of the state's use tax revenues by next year to cities and counties to help with infrastructure. The bill will additionally authorize $300 million in borrowing, with $250 million for the Mississippi Department of Transportation and $50 million for local infrastructure not administered by MDOT.

The other part of the package was the creation of a lottery, the first $80 million in tax revenue annually going to the state highway fund until 2028 and the rest put into the Education Enhancement Fund. Just the highway fund portion alone could add up to $720 million. In 2018, the Arkansas lottery generated $91.8 million in revenue for college scholarships.

After 2028, the first $80 million of lottery tax revenue will go to the general fund, with any additional funds going to the EEF.

The infrastructure bill has increased registration fees for owners of hybrid and electric vehicles and is redirecting gaming tax revenue from sports wagering to roads and bridges. Hybrid owners will pay an additional $75 when they register their vehicles annually, while owners of electrics will pay $150. 

Right now, Mississippi drivers pay 37.19 cents in state and federal taxes on every gallon of gasoline, about 11 cents a gallon less than the national average. The state’s gas tax was last increased in 1987. 

The federal gas tax has been 18.4 cents per gallon since 1993. For every one cent increase, the state’s gasoline tax revenue ($423,642,449 in fiscal 2018) would increase by about $23 million.

The need for more spending beyond the infrastructure bill borne by taxpayers is questionable. In last year’s annual Reason Foundation Highway Report, Mississippi was rated 11th best overall. The condition of the state’s rural interstate pavement was ranked 37th but the state only ranked 19th in deficient bridges.

Taxpayers will spend $1,105,236,550 on the Mississippi Department of Transportation, with $559 million coming from federal funds and the rest from the state’s petroleum tax. 

The Office of State Aid Roads will have an appropriation of $225,410,848 from special and federal funds, which will help maintain 25,857.04 miles of county roads that are considered “feeder” routes between the state highways. This money also goes to maintaining 5,368 bridges on these routes.

One big component in increased infrastructure spending under the infrastructure package is the use tax, which the state can collect from online vendors. This was a result of the 2017 U.S. Supreme Court decision in South Dakota v. Wayfair Inc. that ended the requirement that a state couldn’t collect sales taxes on businesses without a physical presence in a state. The first year after the decision, state use tax revenues increased by 8.37 percent.

In fiscal year 2018, which ended June 30, the state collected $338,166,512 in use tax, which is a 7 percent tax assessed on all out of state purchases. Thirty-five percent of that total would add up to $118,358,279. 

So far in this fiscal year, the state has collected $287,901,358 with one more month left in the fiscal year. That’s more than 19.04 percent more than the same time last year. Thirty-five percent of that is $100,765,475.

Highways weren’t the only focus of the infrastructure plan. 

It will appropriate $3 million to be divided equally among each municipality. Of the remainder, half would be allocated on a basis of the municipality's percentage of the state population and the other half would be divided up using a proportion based on the amount of sales tax revenue distributed to a municipality during the preceding fiscal year.

The counties would receive money as well under the plan. One third of the county monies would be evenly shared with each of the state's 82 counties. 

The next third would be allocated to counties based on each county's proportion of the state's rural road miles. 

The last third would be allocated to counties based on that county's percentage of the state's rural residents. 

The Delta Health Alliance is a non-profit organization that receives most of its revenues from government grants and manages 52 education and healthcare programs in the impoverished Delta region in Mississippi.

The organization has four homes on its property for the use of its employees that are nearly three times as valuable apiece as the median home in the area. The DHA also receives an unbeatable deal on a lease for its headquarters.

The organization’s headquarters is located on land in Stoneville leased from the Mississippi Agricultural and Forestry Experiment Station. The organization has a sweetheart deal on its lease, paying Mississippi State University a symbolic $1 per year in a deal that expires in 2034. 

This also means the organization pays no property tax on five structures valued at $2.83 million. 

According to the organization’s most recent audit, the four executive in residence houses are valued at $843,378, or about $210,844 apiece. The office building is valued at $1,993,612. 

The median home value in Washington County, Mississippi is more than $76,000, according to the National Association of Realtors. 

From 2009 to 2011, the DHA tried to bill the Health Resources and Services Administration for more than $11,000 in maintenance and utility costs for the homes (it referred to them as cabins in paperwork filed with the government) under its Delta Health Initiative Grant. 

Its justification was that DHA employees used the cabins as temporary residence while on travel and calculated the rate based on the federal per diem for a hotel in the area, $70 per night.

In a 2015 decision, the U.S. Health and Human Services Appeal board upheld the original determination by the HRSA to disallow the spending. They said the DHA didn’t show that the per diem costs were solely for employees working solely on grant-funded work.

In fairness, there could be a need for on-campus accommodations since there are only two small hotels located in nearby Leland.  Greenville, which has several large chain hotels, is about 12 miles away from DHA’s Stoneville headquarters.

The DHA administers two Promise Neighborhoods (an Obama era U.S. Department of Education program), a medical clinic, headstart programs, anti-obesity, and anti-smoking programs among others. 

The organization receives grants from the U.S. Department of Health and Human Services, the U.S. Department of Agriculture and the U.S. Health Resources and Services Administration. 

Their CEO, Karen Matthews, has averaged more than $350,000 in pay, bonuses and benefits annually over the last seven years.

Mississippi taxpayers could soon be on the hook to cover part of the cost of restoring unprofitable passenger rail service to the Gulf Coast that was ended after Hurricane Katrina in 2005.

U.S. Sen. Roger Wicker (R-Mississippi) announced the award on Friday of a $33 million grant for infrastructure and capacity improvements from the Federal Railroad Administration.

The grant would pay for half of the cost of $65.9 million project to restore part of the eastern route of the tri-weekly Sunset Limited, which ran through the Mississippi Gulf Coast and connected Orlando, Florida with Los Angeles. 

Under the grant, service would be extended to Mobile and require further contributions from Alabama and Florida to complete the route all the way to Orlando. 

The service was terminated east of New Orleans in 2005 after Hurricane Katrina devastated the track and other infrastructure.

Mississippi’s share of the bill could add up to about $15 million, with Louisiana having already committed to spending $10 million for its part and Amtrak also adding funds. 

The legislature could appropriate funds in the upcoming session after an attempt didn’t make it out of committee in this session. Senate Bill 2542, authored by state Sen. Brice Wiggins (R-Pascagoula), would’ve appropriated $4,696,500 toward Gulf Coast rail restoration and improvements to freight rail service in the area as well.

In Alabama, Gov. Kay Ivey is taking a cautious approach before adding her support to appropriating nearly $5 million state funds for the route. 

She cited concerns with the Alabama State Port Authority as one reason for caution. Port Authority director Jimmy Lyons said in 2017 that passenger rail out of Mobile would be a major disruption to freight operations connected with the Alabama State Docks.

Advocates say that restoring rail service would help promote economic activity along the route. One of these groups is the Southern Rail Commission, which is seeking more extensive passenger rail in the South. 

The SRC cites a May 2018 study by the Trent Lott National Center at the University of Southern Mississippi that says that construction and renovation of the rail lines on the Coast would add $34 million to the state’s economy. It also says restoration of passenger rail on the Mississippi Gulf Coast between Mobile and New Orleans would add $6 million annually to the economy.

The problem is that even Amtrak admits that restoring service will result in a hefty bill for taxpayers, since the quasi-public corporation relies heavily on federal and state subsidies to keep running.

A new Sunset Limited train that connects Orlando with Los Angeles wouldn’t be profitable and would require annual subsidies from taxpayers along the route. According to the latest statistics from Amtrak, the Sunset Limited route lost 2.6 percent of its ridership between fiscal year 2015 and 2016.

Amtrak’s own numbers in its 2015 feasibility study indicate that restoring service from New Orleans to Orlando would result in a $5.48 million loss annually. 

Just running a roundtrip, standalone train from Mobile to New Orleans would yield a loss of $4 million. Having both a tri-weekly train from Orlando to Los Angeles and a separate round trip service between Mobile and New Orleans connection would result in an annual loss of $9.49 million.

This figure doesn’t include improvements to the rail infrastructure and stations along the route, which would cost, at minimum, $14,718,000 for just the restoration of passenger rail service and $102,954,000 for what the study says is a service level for ongoing operations.

Passenger rail hasn’t fared well in Mississippi, which has two Amtrak routes that pass through the state. 

The Crescent train connects New Orleans with New York, while the City of New Orleans links the city with Chicago. 

The most recent Amtrak numbers from 2017, show that the number of passengers boarding and detraining in Mississippi decreased from 118,200 in 2011 to 96,100 in 2018. That’s a decrease of nearly 18.7 percent.

According to the Amtrak 2015 feasibility study for restoration of rail service east of New Orleans, total trips declined from 148,387 in fiscal 1993 to 81,348 in 2005, a decrease of 45.2 percent. 

Even taking into account that the federal government’s fiscal year ends on September 30, the numbers still pale when the final full year of service (2004) is considered, down 35 percent from 1993.

The study blamed delays with the train as one of the key factors in the lowered ridership. These delays, according to the study, were due to interference with freight operations from CSX — which owns the track between New Orleans and Mobile — and equipment malfunctions with Amtrak locomotives and passenger cars. 

The Gulf Coast Working Group’s report to the U.S. Congress on restoring Gulf Coast rail service also mentions that limited space with rail yards and bridge crossings would “present a challenge to operating passenger trains on schedule.”

It would take the average person more than 13 weeks to wade through the 9.3 million words and 117,558 restrictions in Mississippi’s regulatory code. 

This is according to an analysis from James Broughel and Jonathan Nelson at the Mercatus Center at George Mason University. They have taken a deep dive into the regulatory burdens of each state, including Mississippi. 

What do regulations look like in Mississippi? In terms of government subdivisions, the biggest regulator, by far, is the Department of Health, with more than 20,000 regulations. That is followed by the Department of Human Services with over 12,000 regulations, and 10,000 plus regulations for state boards, commissions, and examiners. The most regulated industries were ambulatory healthcare services, administrative and support services, and mining (except oil and gas). 

Overall, Mississippi was middle of the pack when it came to administrative regulations. It would take 31 weeks to read all 22.5 million words in the New York Codes, Rules and Regulations, which has 307,636 restrictions. But regardless of the state, there is generally one consistent – the number of regulations are only increasing. 

Regulatory growth has a detrimental effect on economic growth. We now 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. Real numbers, and real money, indeed. 

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. 

A prescription for lowering the regulatory burden on a state is the one-in-two-out rule, or a regulatory cap. In 2017, one of President Donald Trump’s first executive orders was to require at least two prior regulations to be identified for elimination for every new regulation issued. This is badly needed. We have gone from 400,000 federal regulations in 1970 to over 1.1 million today. 

Many years ago, British Columbia took on a similar mission. And in less than two decades, their regulatory requirements have decreased by 48 percent. The result has been an economic revival for the Canadian province. 

And one state has the unique ability to rewrite their book on regulations. This year, the state of Idaho 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.  

Now, the governor of Idaho is tasked with implementing an emergency regulation on any rule that should remain. The legislature will consider them next year. There are certainly needed regulations, just as there are unnecessary or outdated regulations that serve little purpose. But, the difference is, the burden on regulations now switches from the governor or legislature needing to justify why a regulation should to be removed to justifying why we need to keep a regulation. 

Whether it’s a sunset provision or one-in-two-out policy, Mississippi should move in the direction toward a smaller regulatory state with more freedom. And if a regulation is truly important to our well-being, let the regulators prove why. In a state in need of economic growth, let’s find a way to remove unnecessary barriers and inhibitors. 

This column appeared in the Starkville Daily News on June 6, 2019.

Mississippi is the nation’s most dependent state on federal funds and, if Louisiana is any guide, the addiction to federal money would only worsen if Medicaid was expanded.

Federal funds for Louisiana increased 41.63 percent between 2016, before Medicaid was expanded, and 2019.

In Mississippi’s newest $21 billion budget which goes into effect on July 1, 44.5 percent of revenue comes from federal sources. Only 27.26 percent came from the state general fund (state taxes such as income and sales) and 25.32 percent sourced from other funds, such as user fees.

Medicaid ($4.94 billion in federal matching funds) represented 52.63 percent of all federal funds appropriated for Mississippi. 

Medicaid covers 674,544 enrollees in Mississippi or about 22.6 percent of the state’s population.

Adding other social welfare programs, such as Temporary Aid to Needy Families (TANF) and Supplemental Nutritional Assistance Program (SNAP), bring that social welfare’s share to 68.57 percent of federal outlays for the state.

The percentage has changed little in the past four years, with an average of 44.37 percent of the state’s revenues coming from federal sources. Also not budging was the percentage represented by social welfare spending, which averaged 67.72 percent of federal money appropriated for Mississippi.

The Tax Foundation ranked Mississippi as the state most dependent on federal funds as a percentage of its revenues, with Louisiana second.

Expanding Medicaid as Louisiana did in 2016 would only worsen this dependence compared with the rest of the nation. 

So far, 36 states have expanded Medicaid under the Affordable Care Act, which is more commonly known as Obamacare. The ACA dictates that the federal government cover 90 percent of the costs for expanding eligibility to all individuals earning less than 138 percent of the federal poverty level.

In Republican Gov. Bobby Jindal’s final $28.2 billion budget in fiscal 2016, the Pelican State received 34.98 percent of its budget from federal funds. More than 62 percent of that was for Medicaid ($5.87 billion in federal funds alone).

By 2019, the state’s budget ballooned to $33.99 billion under Democrat Gov. John Bel Edwards, with 41.53 percent of all revenue coming from federal sources.

Medicaid spending ($9.81 billion in federal match) accounted for 69.51 percent of all federal revenue appropriated for Louisiana.

According to the Louisiana Department of Health, 465,871 adults had enrolled in Medicaid expansion as of May 8, 2019, which was a decrease from 505,503 as of April. The state could have as many as 1.7 million people or 37 percent of the state’s population enrolled in Medicaid.

According to a report by the Louisiana-based Pelican Institute, state officials expected 306,000 new enrollees when it expanded Medicaid eligibility.

A non-profit organization that deals with healthcare and education programs in the Delta is in the process of paying back $1 million from a federal grant to taxpayers for spending disallowed by federal rules.

According to a 2015 decision by the U.S. Department of Health and Human Services, the Delta Health Alliance — a 501(c)(3) non-profit organization that receives most of its money from taxpayers in the form of federal and state grants — had to pay back $1 million out of more than $34 million in grants for healthcare and educational programs in the impoverished Delta region. 

According to the organization’s 2017 audit, the organization will pay back the $1 million over a period of 10 years, interest free, with payments of $100,000 paid annually in a deal it reached with the U.S. Health Resources and Services Administration in 2017.

Some of these costs disallowed in the HHS decision included new furniture for the DHA’s offices in Ridgeland and costs related to a gala at the B.B. King Museum to celebrate the one-year anniversary of one of the programs covered under the grant.

The Health Resources and Services Administration, which is an agency of the HHS, determined that the alliance spent more than $1 million on disallowable items in 2014. The DHA appealed the determination before the Departmental Appeals Board, which issued the final decision on March 12, 2015.

When a federal agency supplies a grant, the money comes with restrictions on how it could be spent. The U.S. HHS disallowed some of the spending by the DHA from 2009 to 2011 under the grant. Some of these included:

• $152,474 in payments made for an information technology consulting contract with the Coker Group that included $31,000 and $33,900 for a chief information officer consultant, travel costs plus the costs of renting an apartment along with furniture and utility costs.
• $79,584 for payments to the Keplere Institute for a summer program that provided workforce training in pharmacy technology unrelated to the grant’s purpose.
• $77,998 for direct and indirect costs for charges made for travel and other expenses to the DHA credit card.
• $69,965 for a contract with the Compass Group, which was hired to develop fundraising strategies for the organization for when the grants expired.
• $48,785 in direct and indirect costs for travel and telephone allowances by DHA employees.
• $45,727 in direct and indirect costs for furniture for DHA’s Ridgeland office.
• $42,182 for DCG Inc. for policy development, statistical analysis and consulting services that benefitted other work by the DHA unrelated to the grant.
• $27,575 for payments to external reviewers hired by DHA to assist in evaluating proposals for projects funded by the grant.
• $17,768 for promotional items, sponsorships and other costs.
• $11,232 in direct and indirect costs for event costs that included the rental of space and refreshments for a celebration at the B.B. King Museum to celebrate the one-year anniversary of the Indianola Promise Community, one of the programs covered by the grant.

According to the audit, 70.84 of the DHA’s 33.12 percent of the DHA’s funding in 2017 came from the U.S. Department of Education and 37.72 percent came from the U.S. Department of Health and Human Services.

The organization has received $10.6 million over the past four years from state taxpayers for a technology-based program to help providers reduce preterm births and conditions that can lead to type II diabetes among the Medicaid population in a 10-county area in the Delta.

The legislature appropriated $4,161,095 in the recent session for the project in Medicaid Division’s appropriation bill that was signed into law by Gov. Phil Bryant and goes into effect on July 1.