close

Giving Mississippi public school teachers a pay hike greater than the one passed by the legislature and spending vastly more on K-12 education would hit the state’s budget with a $385 million hammer blow.

The Republican-led legislature passed a teacher pay raise in the final days of the session that will increase teacher pay by $1,500 will cost $58 million annually. House Speaker Philip Gunn said Monday that the legislature is committed to appropriating that amount annually to cover it and that it isn’t a one-time pay hike.

Mississippi teachers have the nation’s lowest average salary ($44,926), but when cost of living numbers utilized by the North Carolina-based John Locke Foundation are used, the state’s teacher salaries now rank 35th nationally and 34thafter the pay hike takes effect.

Analyzing data shows that the $4,000 raise sought by Democrats during the final days of the session would cost $154 million annually. Adjusting the average ($49,574) for cost of living after this hypothetical $4,000 raise would move Mississippi up to 26th nationally.

Even with a $4,000 pay hike, the cost-adjusted average salary for Mississippi teachers would still trail Georgia, Tennessee, North Carolina, Arkansas and Alabama in the southeast region.

That’s not all that public education advocates claim that the state needs. They seek a massive salary increase for teachers and “full funding” for K-12 education under the Mississippi Adequate Education formula.

Increasing the general fund K-12 education budget to the amount dictated by MAEP ($2.477 billion) would add up to about $231 million. Combined with the money required for a $4,000 teacher pay raise and the bill would add up to $385 million.

This increase would be as much as the state’s debt service ($385 million) and more than the entire budgets for:

The complex MAEP formula is designed to increase every year despite declining enrollment in Mississippi public schools.

It also doesn’t include some education programs or revenue from the state’s sales tax deposited in the Education Enhancement Fund ($299 million in fiscal 2018, with $214 million going to K-12) that is split between K-12, community colleges and universities.

Thanks to a state Supreme Court decision in 2017, the MAEP is no more than a funding request for the state’s public schools by the state Department of Education. The legislature isn’t compelled to follow its funding guidelines when appropriating for K-12 education.

Attendance at the taxpayer-funded MGM Park in Biloxi has decreased every year since the minor league Shuckers’ abbreviated inaugural season in 2015.

Those numbers aren’t even close to those predicted when the ballpark was proposed.

In 2018, the Shuckers had 160,364 fans through the turnstiles, an average of 2,259 per game. The team ranked seventh in the Southern League in average attendance. League averages that year were 226,183 fans and 3,388 per contest.

That’s not what a feasibility study commissioned in 2013 by the city of Biloxi predicted. The $25,000 study said the stadium would draw 280,000 fans annually, or about 4,117 per game. Those numbers would’ve put the Shuckers in the top five in the league in attendance.

The Biloxi Shuckers are the Class AA affiliate of the Milwaukee Brewers and they play in the 10-team Southern League, which includes teams in Pearl (Mississippi Braves); Birmingham; Chattanooga; Mobile; Pensacola; Seiverville, Tennessee; Jackson, Tennessee; Jacksonville and Montgomery, Alabama.

Those numbers are down from 2017, when the Shuckers drew 167,151 fans or 2,572 per game. That was good for eighth in attendance in the league, which averaged 3,684 fans per game.

Biloxi drew 180,384 fans in 2016, an average of 2,692 fans that put them eighth in average attendance. The league averages were 232,587 fans total and 3,445 per game that year.

In a 22-game home season in 2015, the Shuckers drew 3,252 fans to MGM Park. The team had to split time with its old ballpark in Huntsville, Alabama while its new home was still under construction.

The city of Biloxi borrowed $21 million to help build the $36 million stadium, which was also funded with BP settlement money and tourism rebate money from a state program. The team was lured from Huntsville, Alabama after playing in front of sparse crowds for years at what was the oldest stadium in the league.

Biloxi Baseball LLC could also receive up to $6 million from the state from the Tourism Rebate program. The state also provided $15 million in money from the BP settlement to help build the park.

Not all feasibility studies are created equal. The one for Birmingham’s Regions Field, which opened in 2013 and cost $64 million, predicted the ballpark would draw 255,300 fans in the first year and 240,800 in the fifth year.

The ballpark — which is located in downtown Birmingham — has outstripped those estimates, drawing a league-leading 391,061 fans in 2018 and 391,725 in 2017.

Total league attendance increased slightly in 2018 (2,261,834) from 2017 (2,171,934), but is still down from a nine-year high in 2014 of 2,367,710. Three teams — Pensacola, Birmingham and Biloxi — have built new ballparks during that time.

A fourth new stadium in Madison, Alabama near Huntsville will be the new home of the Mobile Baybears, who are relocating and changing their name to the Rocket City Trash Pandas. The new stadium will cost Madison taxpayers $46 million.

A feasibility study there predicts the team will draw 400,000 spectators in the first year and level off at an average of 350,000, which would put the team second to Birmingham in annual attendance.

Thanks to an increased tax revenue forecasts, the Mississippi legislature will be spending more taxpayer money going into an election year.

The state’s budget adds up to $6.3 billion, a 3.83 percent increase over last year’s $6.1 billion budget.

The fiscal 2020 budget goes into effect on July 1 and will include a 3 percent pay increase for state workers, a $1,500 pay hike for teachers and increased employer contributions to the state’s defined benefit pension fund.

Mississippi’s budget process is unusual in that there is no single budget document, but a series of appropriation bills for each state agency, board and commission. The Magnolia State is one of 30 states that use an annual budget cycle.

The general fund isn’t the only funding mechanism for appropriations, as some agencies have what are known as special funds, which are funded with fees generated from licenses and other income. Federal money, such as for Medicare, isn’t part of the calculations either.

These agencies will have increased funds in fiscal 2020:

Not every appropriation increased in the budget. Taxpayers will spend $385,241,392 next fiscal year to help retire the state’s more than $4.4 billion in debt, which is the same amount as last year.

Here are some that were actually cut when compared to outlays from last year’s budget:

The state’s budget doesn’t include the more than $371 million in borrowing for various projects that included $45 million for Huntington Ingalls Shipyard in Pascagoula, special states funds that are outside the general fund or federal funds.

In fiscal 2019, the budget with all general, special and federal funds included added up to $20,855.445.148, meaning the state remains the most dependent (42 percent of the budget) on federal funds.

Editor’s note: The Office of State Aid Road Construction receives its entire budget from special funds and not the general fund and its fiscal 2020 budget increased by only $103,555 over last year’s appropriation. A previous version listed a higher amount and we regret the error.

Mississippi teachers make less than their counterparts nationally in the 50 states and the District of Columbia, but when Mississippi’s low cost of living is taken into account, the state’s rank jumps to 35th nationally.

The John Locke Foundation performed an analysis using data from the National Education Association and adjusting the salaries using cost of living indices from the Council for Community & Economic Research (C2ER).

The same process can be applied to salaries taking into account the new $1,500 raise passed by the legislature. Mississippi is still the nation’s lowest average salary ($47,074) when 3 percent salary increases are given to the other states.

The state’s average-paid teacher ($45,574) will receive a 3.29 percent bump from the pay hike, which will cost taxpayers more than $58 million annually.

With the data adjusted for the cost of living ($54,929 in Mississippi), the post-pay hike average teacher salary jumps to 34th, ahead of states such as New Hampshire, Montana, New Mexico and Virginia.

In the Southeast, the adjusted salaries rankings put Mississippi ahead of South Carolina ($52,802.71) and Florida ($50,401.26), but behind Georgia ($64,529.73), Tennessee ($59,514.44), Arkansas ($59,445.21), North Carolina ($59,142.82), Alabama ($58,474.08), and Louisiana ($56,037.06).

If Mississippi’s average teacher salary was increased to $50,132 (10 percent increase), the state’s ranking would increase to 17th nationally ($58,497 with cost of living adjustment) and it would be the second-highest among Southeastern states behind Georgia (ranked 9th with an adjusted annual salary of $62,650).

The average teacher salary nationally is $63,635.46 when adjusted for cost of living.

Mississippi has the lowest cost of living nationally, while Hawaii, District of Columbia, California, New York and Massachusetts are highest nationally, according to the C2ER.

The House and Senate approved the conference report on Senate Bill 2770 on Thursday. The raise started as $1,000 raise phased in over two years and was increased in conference. Attempts to recommit the bill by Democrats in both chambers failed on largely party-line votes.

Some have called the $1,500 raise a “betrayal,” a “joke” and a “slap in the face.”

This is the third teacher pay hike since 2000. The legislature passed a $337 million plan in 2000 that was phased in over six years.

In 2014, the legislature passed a two-year plan that increased teacher pay $1,500 in the first year and $1,000 in the second year, costing taxpayers an additional $100 million.

Teachers in Mississippi receive annual raises after their first three years on the job and also receive pay hikes for earning higher certifications. A teacher in the lowest certification level starts at $34,390, increasing to $39,108 for the highest certification level.

A teacher with 20 years of experience will earn $43,300, while the highest classification nets $53,400. This is before local supplements, which can be several thousand dollars more per year in certain school districts.

According to the Bureau of Labor Statistics, the average weekly salary in Mississippi is $752 or $39,104 annually.

Before the Mississippi legislature left town Friday as the session came to a close, it added $371 million in debt in the form of a large bond bill and several other bond bills for various projects.

Senate Bill 3065 adds up to about $207 million in additional spending that includes $85 million in borrowing for projects for the state’s universities, $25 million in projects at community colleges and $63 million for restoration of historic buildings statewide.

The House and Senate both signed off the compromise on Thursday and the bill needs only Gov. Phil Bryant’s signature to become law.

In a stunning admission while presenting the bill’s conference report, state Rep. Jeff Smith (R-Columbus) said that many of the projects were for “trying to help members that are going to have tough races.”

“We had some big-ticket items and this was the most for the IHL (Institutes for Higher Learning) that we’ve ever had,” said Smith, who is the chairman of the House Ways and Means Committee. “Overall, this bill smells good.”

The “Christmas tree” bond bill isn’t the only bit of largesse being put on the taxpayers’ credit card.

There was also $86 million in projects for the Mississippi Development Authority, $12.5 million to help with the construction of the Mississippi Center for Medically Fragile Children, $7.94 million for the Water Pollution Control Revolving Fund and $3.5 million for improvements at Lauderdale County’s industrial park. All were signed into law by Bryant this week.

Bryant also signed House Bill 983 into law on Thursday. This law will give Huntington Ingalls Industries $45 million from state bonds.

The bill says the funds are for capital improvements, investments and upgrades for the shipyard, part of a three-year deal to help Huntington Ingalls.

It’s not the first time for Huntington Ingalls receiving money from state taxpayers, as the state has borrowed $307 million for Ingalls improvements since 2004. The company was awarded $9.8 billion in new contracts in 2018 and was just given a $1.48 billion contract Tuesday for the 14thSan Antonio class amphibious dock ship for the Navy.

Huntington Ingalls Industries received $45 million from taxpayers in 2018, $45 million in 2017, $45 million in 2016, $20 million in 2015, $56 million in 2008, $56 million in 2005 and $40 million in 2004.

The company leases the land for its Pascagoula shipyard from the state and is exempt from property taxes. It is one of south Mississippi’s largest employers, with 11,000 workers.

In addition to the San Antonioclass, Huntington Ingalls’ Pascagoula yard builds Arleigh Burkeclass destroyers, Americaclass amphibious warfare ships and the Legend class national security cutter for the U.S. Coast Guard.

The state already owes more than $4.441 billion in bond debt and legislators appropriated more than $285 million for debt service for fiscal 2020, which begins on July 1.

The legislature will also borrow $300 million for infrastructure needs under a deal reached in the 2018 special session.

Despite a new tax increase aimed at helping pay for tourism-related expenses, the city of Columbus is running out of money.

According to a story by the Associated Press, Columbus could run out of cash by Sept. 30, when the city’s fiscal year 2019 budget ends. With the city likely to spend $14.2 million before the fiscal year ends and only $10.9 million in revenue projected, the debt could add up to $300,000.

This isn’t the first time the city has been in financial trouble.

According to a November 24 story in the Columbus Dispatch, Columbus operated with an $881,000 deficit in fiscal 2018, which ended on September 30.

Since fiscal 2017, the city has run $1.7 million in deficits under the direction of former chief financial officer Milton Rawle. He resigned in February after more than five years in charge of the city’s finances.

Mayor Robert Smith told the AP that it’s not time for city leaders to panic and that he wants a property tax increase to go into effect for the fiscal 2020 budget, which begins on October 1. This would be the second tax increase to hit city residents this year.

The city will also receive a new 2 percent tax on restaurants that was approved by Gov. Phil Bryant earlier this session and goes into effect on Monday.

Another local bill in the legislature would add another 1 percent to the city’s now 9 percent tax on restaurant sales to pay for the second phase of the city’s new $5.5 million Terry Brown Amphitheater.

Passage is unlikely as the legislature’s session is drawing to a close this week.

Columbus isn’t exactly hurting for tax revenue, receiving $26,651,025 in fiscal 2018 alone. That’s more than similarly-sized Starkville ($20,785,798 in 2016), but less than Vicksburg ($31,165,725 in 2017)

Property owners in the city are assessed at a rate of 46.69 mills just to fund the city’s functions. That rate is average among Mississippi cities, with Jonestown in Coahoma County levying the highest rate statewide at 119.94 mills.

Mills are assessed per $1,000 of a property’s determined taxable value and the owner of an average priced home in Columbus ($128,200 according to real estate site Zillow) pays about $1,596 with an annual homestead exemption on the first $7,500 of value.

According to the latest numbers from the Mississippi Department of Revenue, the city received $718,119.46 in sales tax revenue, up $16,499 from this time last year.

Collections for the year so far are up slightly over the same time last year, with the city receiving $6,416,153.72 in sales tax revenue this year so far as compared with $6,421,907.56 last year.

Columbus taxpayers owe $28,550,411 in debt, with the annual debt service payment adding up to $528,868.

Vicksburg’s total debt adds up to $9,876,050, but Starkville taxpayers owe $55,652,465.

The Mississippi legislature could be approving as many as nine new tourism taxes this session, extending the effective date of six other existing tourism taxes and increasing a couple of existing tourism taxes.

These taxes start as local bills in the legislature and require an initial referendum by the citizens of the city or the county where the tourism tax is levied on hotels, restaurants or both. If a majority of residents approve, the tax goes into effect as local businesses remit the tax to the Mississippi Department of Revenue, who then sends the revenue back to the local government.

Here are some of the new taxes that have been approved or are being considered by the legislature this session:

Signed by Gov. Phil Bryant

House Bill 325– Columbus and Lowndes County have added a 2 percent tax on restaurants with annual sales in excess of $100,000 that will go into effect on April 1 and expire, unless reauthorized in 2020.

The city will receive $400,000 annually of the tax revenue for parks and recreation and special events, while the county will get $300,000 for the same purposes.

The economic development organization known as the Golden Triangle Development LINK will receive $250,000 annually to fund the promotion of community and economic development in the area. The LINK is classified as a 501(c)(6) by the U.S. Internal Revenue Service.

LINK gets most of its annual revenues from taxpayer funds, with 73.4 percent of its budget coming from taxpayers in 2017.

LINK Executive Director Joe Max Higgins’ salary has increased from $194,133 in 2011 to $358,534 in 2017. The amount the organization spends on payroll has increased from $194,133, when Higgins was the only paid employee, to $726,034 for a paid staff of six in 2017.

Higgins was made famous nationwide for his appearance on CBS’ 60 Minutes program in 2016.

Senate Bill 2854– The city of Charleston (population 1,958) would levy a 2 percent tax on restaurants and prepared food at convenience stores to promote tourism.

New taxes still in committee

HB 1682– The city of Columbus wants an additional 1 percent tax on restaurants to help fund the operation and maintenance of an amphitheater.

HB 1423– The city of Lexington with 1,523 residents would levy a 2 percent tax on restaurants and prepared food at convenience stores to promote tourism.

HB 1683– The city of Bay St. Louis, with a population of 13,043, wants to impose a 2 percent tax on bars and restaurants to fund tourism and parks and recreation projects in the city.

HB 1726– This would allow the city of Columbia (population 6,037) to authorize a 3 percent tax on hotels and restaurants for parks and recreation and economic development.

HB 1742– The city of Waynesboro (population 4,903) would impose a 1 percent tax on hotels and restaurants for tourism and parks and recreation improvements.

Tax extensions signed by the governor

HB 653– The city of Baldwyn had a 2 percent tax that expired on July 1. Despite notification from the Mississippi Department of Revenue, city businesses continued to collect the tax and have collected $11,983 from it so far this year. This bill will not only reauthorize the tax for the next three years starting on July 1, it will allow the city to receive the tax revenue collected by the DOR when the tax had expired.

New taxes or extensions awaiting the governor’s signature

SB 3074 would extend the repeal date of Pascagoula’s 3 percent tax on hotels — which expired in 2017 — to 2023 and would allow the city to retroactively collect the tax levied after the authorizing law expired.

SB 2185– The town of Carrollton (population 178) would impose a 2 percent tax on restaurants.

SB 2853– The city of Saltillo, with a population of 4,987, wants to levy a 2 percent tax on hotels and restaurants to pay for tourism enhancements, economic development and parks and recreation.

SB 2896– The city of North Carrollton wants a 2 percent tax on restaurants.

SB 2988 would increase Flowood’s tourism tax on restaurants from 2 percent to 3 percent and extend it until 2029.

Tax extensions still in committee

HB 1565 would add 1 percent to Starkville’s existing hotel and restaurant tax to pay for the construction of sports tournament and recreational facilities and extend the repeal date.

HB 1706 would extend the repeal date on the Jackson Convention and Visitors Bureau and its supporting 1 percent tax on hotels and restaurants. The bill would also change the requirements for the bureau’s governing board. The original billwould’ve added 1 percent to Jackson’s existing levy.

SB 3086 would reenact the 3 percent hotel and restaurant tax in the city of Amory until 2023.

According to a study, wading through Mississippi’s morass of regulations would take 13 weeks to absorb its 9.3 million words and 117,558 restrictions.

Even with 40-hour workweeks and some breaks, that’s not exactly light reading.

The Mercatus Center at George Mason University’s James Broughel and Jonathan Nelson wrote a policy snapshot of Mississippi’s regulatory state as part of a national project to analyze regulatory burdens nationwide.

“We’ve really been pleasantly surprised with all of the interest by state policymakers and state think tanks in finally having some numbers they can apply to regulations on the books,” Broughel said. “There wasn’t any knowledge of how much regulation was in place, so this is one of the first times we’ve cast light on that.”

These regulations can impose huge costs as businesses are forced to comply with them and can also become anticompetitive devices, since many of them are written by the industries that are being regulated.

The two economists used an interesting methodology to study Mississippi and 32 other states so far, with the goal of all preforming an analysis for each of 50 states.

The Mercatus duo downloaded all of the state’s regulations and used a platform called State RegData designed by Mercatus economist Patrick McLaughlin to mine the data by reading and counting it faster than any human reader could.

This tool allows researchers to identify the most-regulated industries by using what are known as restrictive word counts such as shall, must, may not, prohibited and required. 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 in Mississippi in terms of restrictions are:

Broughel said that Mississippi is roughly mid-pack in the amount of its regulatory framework.  Some states such as New York have a lot more 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.

The time that it takes to read Mississippi’s regulations is dwarfed by the three years it’d take to read the 112 million words in the U.S. Code of Federal Regulations. Sixty-eight percent of those regulations, Broughel said, have never been amended, which means they’ve never been re-evaluated for relevancy or economic impact.

This number highlights a problem with regulations at both the national and state level.

British Columbia’s government has enacted a law that forces provincial regulatory bodies to eliminate two rules for every rule they write and Broughel said that’s one way for governments to get a handle on regulations that have outgrown their effectiveness. He said states should also consider limiting the total amount of regulations that can be in effect at one time.

Ultimately, states need to figure out how to reduce the regulatory burden to help boost economic growth.

“What we see in Washington and across the states is that we don’t have very good procedures for reviewing regulations,” Broughel said. “The states have administrative procedure acts, the federal government has an administrative procedure act that created procedures for creating regulations.

“But we don’t have very good procedures for reviewing regulations or moving regulations or measuring the effectiveness of regulations. At some point, having more rules becomes counter-productive and it becomes impossible to comply.”

The leader of Mississippi’s Medicaid program warned taxpayers Monday that the long-term health of the program is in jeopardy absent reform.

Drew Snyder is the Executive Director of the state Division of Medicaid and he told the Stennis Capitol Press Forum that the national program is unsustainable long term unless “we continue to refine our approach.”

He also cited data from the federal Centers for Medicare and Medicaid Services that says if nothing is done by 2026, one of every five dollars spent in this country will be on health care.

One of the reasons for these increasing costs is that 36 states have expanded Medicaid under the Affordable Care Act. Since 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, the impact to the program’s bottom line is worsening.

Medicaid costs for expansion adults only, according to the CMM, were expected to be $855 billion in new federal spending between 2017 and 2026. That would add up to more than 10,000 F-35 fighter aircraft ($85 million flyaway cost).

Expanding Medicaid eligibility in Mississippi has become a campaign issue in the gubernatorial race, as Lt. Gov. Tate Reeves opposes it and all of the Democratic contenders, including Attorney General Jim Hood, support expansion.

One problem is that Medicaid expansion will cost state taxpayers more than expected. The state Institutes for Higher Education did a study in 2015 that said that it’d cost the state $159.1 million per year by 2025 if 95 percent of the eligible population participated in the expansion (310,039 enrollees).

“A number of states that expanded Medicaid have all made estimates and they’ve all been wrong,” Snyder said. “Louisiana was more than expected. Virginia had more enroll than expected. The numbers vary pretty significantly.”

According to a report by the Louisiana-based Pelican Institute, the state expected 306,000 new enrollees when it expanded Medicaid eligibility, but that number has ballooned to 502,647 according to recent data from the Louisiana Department of Health.

Right now, the federal government pays 76.6 percent of most medical costs and anywhere from 50 to 90 percent of administrative costs. In Mississippi, the program covers 674,000 enrollees, with 56 percent of them children and less than 10 percent of them able-bodied adults. Medicaid covers costs on 67 percent of all births in the state.

Under Synder’s leadership, the agency won’t ask for a deficit appropriation from the legislature for the first time in three years and overall state spending on Medicaid is down 9.4 percent less than it was three years ago.

In fiscal 2016, the state spent more than a billion dollars on Medicaid. This fiscal year, which starts July 1, the agency asked for an appropriation of more than $938 million.

Synder says that one reason for that is decreased enrollment in the program due to an improved economy. He said his division has also eliminated non-critical conducts, come up with a more precise budgets, provided better oversight over vendors and aggressively sought to cut excess spending in the program, including decreasing the division’s workforce by four percent.

magnifiercross linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram