The HOPE Act restores the 1990s welfare-to-work reforms that “ended welfare as we know it,” to use Bill Clinton’s phrase. These policies were gutted by the Obama administration as a backdoor way to expand welfare and to expand Obamacare.

In passing HB 1090, Mississippi has again become a leader in welfare reform, just as we led the way nationally with Gov. Kirk Fordice’s “Work First” reforms. According to an independent review of the law, it moves “Mississippi to the forefront of states in overall benefits integrity and the move from reliance on benefit programs to employment.”

Here are 10 reforms the HOPE Act accomplishes:

It gets people back to work … By requiring childless, able-bodied adults to get back to work or obtain training or attend school to keep receiving SNAP (food stamps).

It removes millionaires from food stamps … by restoring federal income and asset tests. (These are the welfare-to-work reforms from the 1990s.)

It tracks out-of-state welfare spending ... to stop welfare fraud and abuse (think: ATMs in the Walt Disney World area).

It verifies immigration status … to remove illegal aliens using stolen social security numbers to illegally access welfare (under federal law, illegal aliens are ineligible for welfare, but no one’s been checking).

It verifies residency … to make sure people in other states are not fraudulently taking advantage of Mississippi welfare programs.

It helps state employees … by giving them real-time data they can use to verify eligibility, eliminating duplicative and inefficient procedures.

It saves Mississippi – and federal – taxpayers millions a year … by removing fraudsters and identity thieves from our welfare rolls as soon as we discover their presence.

It makes sure welfare benefits are properly used … by banning EBT card usage at ATMs in liquor stores, strip clubs, casinos, theme parks and other questionable locations.

It requires state agencies to work together and to share eligibility data … so that people can’t conceal vital information that would illegally increase benefits.

It saves state money by drawing down federal funding … to help pay for cutting-edge fraud prevention measures – while also saving federal funding otherwise wasted on fraudulent Medicaid and welfare enrollment.

As a bonus, the HOPE Act accomplishes all this by preserving existing benefits for those who are truly eligible, preserving the long-term integrity of our Medicaid and welfare programs.

When it comes to fixing the problems facing our state, government’s best strategy is often to get out of the way. That’s especially true when it comes to expanding internet access to rural areas.

Despite efforts by state and local governments to improve internet access, Mississippi ranks 49th in the U.S. for broadband coverage. This has officials in some communities looking for a government-subsidized solution: municipal broadband.

Numerous government internet projects all across America have already failed. Likewise, many municipalities considering such projects already have several internet providers available to them without government getting involved.

While Mississippi doesn’t need local governments using tax dollars to build needless boondoggles, it does need a way to expand internet service to those not currently served. The fastest and cheapest way to make that happen is through a project recently announced by Microsoft president Brad Smith.

The project utilizes unused television stations, known as “white spaces,” to create a sort of high-speed “Super Wi-Fi” broadband service that can connect Mississippi’s rural communities without running broadband infrastructure to remote areas. The only thing standing in the way of this dream becoming a reality is the Federal Communications Commission.

The agency must move forward with its proposal to set aside three currently unused TV frequencies in each market in order for white spaces internet coverage to operate. Once the FCC takes that step, companies can begin expanding high-speed internet coverage to every hillside and hollow in Mississippi — without the high costs and environmental impacts associated with laying miles of wires to build a broadband communications network.

Other countries are already testing white spaces internet. In Malawi, one of the least developed nations in Africa, private sector providers are preparing to use television white spaces to rapidly bring Wi-Fi to millions of people. India is also looking to pioneer the use of white spaces to bring broadband coverage to rural areas.

If places like Malawi and India can successfully use white spaces to expand internet coverage, the FCC should allow rural Mississippians to benefit from the same technology.

That same white spaces technology is another example of why local governments should avoid broadband boondoggles: government internet programs are too expensive, become outdated too quickly and fail to provide service to people who can’t already access the internet.

That didn’t prevent Biloxi from seeking state permission to set up their own broadband network last legislative session. The legislation (HB 1716) promised to bring “more accessible, affordable and ubiquitous Internet services to all businesses and residents within the city at broadband speeds of at least one gigabit.” The current FCC standard for broadband coverage is 25Mpbs. Biloxi community leaders were ambitiously seeking to establish a system offering speeds 40 times faster than that.

In neighboring states, municipal broadband projects have failed spectacularly, leaving taxpayers on the hook for millions. Opelika, Alabama, for instance, has sunk $43 million into its city’s broadband network, shifting costs to electric ratepayers. Lafayette, Louisiana, has spent $160 million on its subsidized broadband network, at a cost of $9,750 per subscriber. Memphis lost more than $32 million on its network, which was later sold for a measly $11.5 million.

Government is already the largest employer in Mississippi, and it is already doing too much. Government needs to stay out of the broadband market, which is competitive and requires ongoing strategic investments in new technology to keep up. While high-speed internet can be a powerful economic catalyst for Mississippi communities, these same communities should avoid using scarce taxpayer resources to invest in technologies the private sector is better suited to provide.

Both the FCC and the Mississippi Legislature should get out of the way and let the marketplace bring affordable, high-quality internet service to Mississippi communities. Just because a problem exists, doesn’t mean government should try to solve it.

Jameson Taylor, Ph.D., is vice president for policy, Mississippi Center for Public Policy.

By Mike Hurst

Recently, while most Mississippians were busy working, raising families and just trying to get by, the state of Mississippi held a little noticed hearing to consider imposing taxes on a significantly larger number of our residents. This occurred after the Mississippi Legislature had already left town, leaving no opportunity for our elected officials to publicly debate this important issue at the state Capitol or cast votes on it. Rather, as has unfortunately become a fact of life in our day and age, unelected bureaucrats in a state government agency, with little fanfare and even less explanation, began a process to expand regulations that will require many Mississippians to pay more taxes with minimal public input and even less accountability.

A few months ago, the Mississippi Department of Revenue filed a notice with the Secretary of State's Office, signaling that DOR would be amending several of its existing regulations. One of these revised regulations would expand the definition of hotels and motels to include rooms in people's homes, as listed on popular internet websites like Airbnb or VRBO. Another proposed DOR regulation expanded the application of local tourism taxes.

These regulatory changes proposed by DOR come on the heels of another recent attempt by DOR earlier this year to require out-of-state companies to collect taxes on sales made to Mississippians over the internet, despite the fact that the U.S. Supreme Court has clearly stated this is illegal and DOR's own commissioner has admitted that what DOR is doing is "probably unconstitutional."

State law requires DOR to timely notify the public of proposed rule changes. DOR did not do so. State law also requires DOR to issue a statement showing the impact of proposed rules on the economy. Again, DOR failed to do so. State agencies are required by law to prepare such economic impact statements when adopting significant amendments to existing regulations. However, in the 11 years since such statements have been required, DOR has never issued one!

The most troubling aspect of all of these proposed regulations is that DOR's actions represent a trampling of the doctrine of separation of powers in our form of government. This unelected bureaucracy is unconstitutionally commandeering authority from our legislative branch to make laws, rather than simply implementing them.

Regarding DOR's proposed tax on people's homes, bills were introduced in both houses of the Legislature during the 2017 legislative session to change the definition of hotel and motel under the local tourism tax to include short-term rentals of residential properties.

None of these bills became law.

Despite our elected representatives choosing not to change the law, this unelected state agency is now attempting to legislate by regulation. The same thing happened with internet taxation, as the Legislature considered and rejected changes to state law to allow DOR to tax out-of-state sellers like Amazon. Again, notwithstanding our elected officials opting not to enact such a law, DOR is proceeding with regulations to do it anyway.

This silent and gradual encroachment into our lives by an unelected and unaccountable Fourth Branch of government is deeply troubling for our form of government and the future of liberty. This governing by regulation is not what our founders intended, not what was written into the Constitution, and not what our government was built upon. Our elected officials need to step up and put a stop to this regulatory tyranny. But we the people also need to let our voices be heard by getting more involved in the rule-making process and challenging bad rules in court.

The only way unaccountable agencies are going to change is if we make them do so.

By Dr. Jameson Taylor

Every year my aunt sends me $5 worth of lottery tickets for my birthday. One year I won $2; another year $1; this year, I won an additional ticket, which also proved a loser. The closest I have come to recouping my aunt's investment is the year I won $4. I was thrilled, but not as thrilled as I would have been had she sent me cash instead. I just don't have the heart to tell her that her birthday present is little more than a tax receipt printed on fancy, scratch-off paper.

 A lottery is only good for one thing: concealing the creation of a new tax. We've all heard the stories of how much revenue a lottery could generate. Governments generate revenue in essentially three ways: taxes, fees and fines. According to the Tax Foundation, the legal definition of a tax is that its primary purpose is to raise revenue. A fee, on the other hand, is "a charge imposed for the primary purpose of recouping costs incurred in providing a service" while a fine is "imposed for the primary purpose of punishing behavior." Based on these distinctions, the Tax Foundation concludes, "The lottery is in part a tax ... the classic definition of a tax, upheld in nearly every federal and state court."

The North American Association of State and Provincial Lotteries boasts that 27 cents of every $1 spent on lottery tickets goes back to the government. This payment is not to be confused with taxes generated from winnings. In other words, state-run lotteries impose a 27 percent tax on the mere act of purchasing a lottery ticket.

It is irrelevant that buying the ticket is voluntary. Taxes are imposed on all sorts of voluntary activities, ranging from using a phone to going to the movies. What is unique about a lottery is that it is a state-run monopoly on a nonessential service -- very different from natural monopolies, like water and electricity provision, with high startup costs. The purpose of the lottery monopoly is not to provide for a public need or to protect the public welfare, but to generate revenue. It's a tax.

Moreover, the lottery is a bad tax. It's inefficient, with much higher administrative costs than other forms of taxation, and it encourages nonproductive, if not downright destructive, behavior.

Let's look at a similar case: the ongoing debate over marijuana legalization. Economists believe marijuana legalization could generate billions of dollars in tax revenue. In 2016, Colorado collected $200 million in taxes on $1 billion in "legal" marijuana sales. That's a lot of money that could be used to fund roads and education. But at what cost? As with the lottery, some people would become addicts. As with the lottery, sales would drain money from other, likely somewhat more productive, purchases and activities. As with the lottery, lower-income, less educated users would consume a disproportionate share. In the case of marijuana legalization, the government would be condoning and profiting from a questionable activity. In the case of lottery legalization, the government would be initiating, advertising, promoting and bolstering a questionable activity.

While lottery advocates claim "people from all walks of life play the lottery,” they often sidestep the question of who plays the lottery most frequently. (As I mentioned, even I "play the lottery" once a year on my birthday.) Research shows that those in the lowest income bracket play 2.5 times more than everyone else and that "increased levels of lottery play are linked with ... males, blacks, Native Americans, and those who live in disadvantaged neighborhoods." A recent 10-year analysis of the New Jersey lottery confirms the typical player has a below-average income and lacks a college degree.

Those who tend to play the lottery most often, it seems, are either poor or think of themselves as poor. In this respect, the lottery is a tax on false hope. And while it may not be the government's business to tell people what or who to hope in, government shouldn't be monopolizing and encouraging such deception.

We already have enough taxes in Mississippi, and we already have enough false hopes. Let's not add anymore with a lottery.

MCPP Praises Passage of Welfare Reforms

“will help more Mississippians move from dependency to dignity, from poverty to prosperity, and from welfare to work.”

(JACKSON) – Mississippi Center for Public Policy President Forest Thigpen praised legislators for passing HB 1090, which will curb fraud and abuse in Medicaid and other welfare programs.  

Thigpen said, “These reforms will help more Mississippians move from dependency to dignity, from poverty to prosperity, and from welfare to work by eliminating loopholes that are found in current welfare policy. Among other things, it will restore the work requirements that were a key to the success of welfare reforms enacted by President Bill Clinton twenty years ago, which have been gutted over the last few years.” 

Thigpen said the bill will help focus key welfare programs on those who are truly eligible by removing people who have moved to other states and people who have died.

“Other states have saved hundreds of millions of dollars by implementing just some of the actions that will now be required of Medicaid and the Department of Human Services,” Thigpen said.

Among the provisions in HB 1090:

•   Requires able-bodied adults without children to transition from welfare to work.
•  Restores income and asset tests to the food stamp program (now known as SNAP).
•  Tracks out-of-state spending to stop welfare fraud and abuse (for example, Electronic Benefit Transfer (EBT) card use at Disney World).
•   Protects Medicaid and welfare for our state’s most vulnerable citizens by giving state employees new tools to identify and eliminate fraud.
•  Saves Mississippi – and federal – taxpayers millions a year by removing fraudsters and identity thieves from our welfare rolls.

“The HOPE Act will help Mississippi lead the way in getting people back to work, saving tax dollars and eliminating welfare fraud,” said Dr. Jameson Taylor, vice president for policy at the Mississippi Center for Public Policy.

The Mississippi Center for Public Policy is an independent, non-profit organization based in Jackson. It works to advance the ideals of free markets, limited government, and strong traditional families. Its work is supported by voluntary, tax-deductible contributions. It receives no funds from government agencies for its operations. To learn more about MCPP, visit www.mspolicy.org.

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Honor System for Welfare Not Working

Trust, but verify. Seems like commonsense. Unfortunately, government programs are often lacking in common sense. According to the Miss. Department of Human Services, self-verification is the method used to determine eligibility for Food Stamps, also called the Supplemental Nutrition Assistance Program (SNAP). The director of Fraud Investigation with the department acknowledges: “The application process for SNAP is based on an ‘honor system,’ trusting that applicants truthfully submit their income and number of dependents.” It should come as no surprise that some people aren’t telling the truth about their identity or residency or income when applying for welfare, whether it be Food Stamps or Medicaid. What is surprising, unbelievable really, is that the state is not really verifying who people are, where they live, and whether they are actually in need. The result is millions of taxpayer dollars lost to fraud, waste and abuse. This is savings that could be going to help the nearly 8,000 Mississippians with disabilities and other serious needs on a waiting list for Medicaid’s Home and Community Based Services. It is savings that could be going to patch holes in our Medicaid budget, or state budget.

A bill (HB 1090) moving through the state legislature would require Miss. welfare programs to use a verification service to check for things like identity and residency. Using databases easily accessible in the private sector, this service would discover whether a Social Security number is being fraudulently used. When Illinois ran a similar audit they found 14,000 dead people on their Medicaid rolls. The eligibility review would also check things like whether someone on Mississippi Medicaid is paying property taxes in another state – a likely sign the recipient is not a Mississippi resident. It would check incarceration status and death records and immigration status – all the things any reasonable voter assumes are already being verified to protect the integrity of our welfare programs.

HB 1090 also includes commonsense reforms like expecting SNAP enrollees to cooperate with a fraud investigation. The bill would track where welfare benefits are being accessed and spent. When Maine ran such a check, they found $3.5 million worth of transactions in Florida, including hundreds of thousands of dollars in withdrawals from ATMs near Walt Disney World. When the state of Florida ran such a check, they found 3,500 of their Food Stamp recipients were also receiving Food Stamps in at least one other nearby state, including Mississippi.

Those who claim welfare fraud is not a problem in Mississippi are mistaken. It is so much of a problem that in 2015 the Mississippi Department of Human Services (DHS) was awarded a $1.9 million federal grant to help eliminate fraud. It is so much of a problem that the state auditor has found millions in questionable TANF costs and warned that the “failure to maintain supporting documentation for eligibility as well as not monitoring and reducing benefits” as required could result in the state having to repay federal funds.

Similarly, we have seen recent arrests for welfare fraud in several counties. According to news reports, DHS has been “knocking, one door at a time, looking for people who’ve applied for food stamp benefits that aren’t entitled.” Instead of going door-to-door, we can harness the power of technology to catch a good bit of that fraud with the click of a button. 

It is no accident that the states most committed to a robust social safety net are also rooting out fraud most aggressively. The first state to proactively verify its Medicaid rolls was Pennsylvania, which launched its own program in 2011. They identified 160,000 ineligible welfare recipients in the first 10 months and saved the state nearly $300 million. Illinois, Minnesota, and Massachusetts soon followed. Altogether, those four states are seeing a combined savings of $1.3 billion annually. We estimate Mississippi would save $40 million annually, based on a fraud rate of 10 percent.

If we want to protect our Medicaid and other welfare programs for those who are the poorest of the poor, the disabled, the elderly, we need to eliminate fraud and waste. We owe it to all Mississippians – including those who are truly eligible to receive these benefits – to be good stewards of these programs.

Jameson Taylor, Ph.D.
Vice President for Policy, Miss. Center for Public Policy

(JACKSON, MISS—FEBRUARY 17) – Today, the Mississippi Justice Institute (MJI) filed a complaint with the Mississippi Ethics Commission following a refusal by the Department of Revenue (DOR) to make available public documents related to a voluntary agreement between that agency and the online retailer Amazon. The agreement, as first disclosed in public statements by Department of Revenue officials, appears to provide for Amazon to collect use tax from online purchases from Mississippians and remit those taxes to DOR. DOR officials have publicly spoken of negotiations between the agency and Amazon.

“Mississippi law requires government transparency and accountability. As taxpayers, the public should be allowed to know the details of our state agencies’ agreements and contracts with outside entities – in this case a billion dollar corporation collecting taxes on behalf of the state. These details are particularly important because they involve an issue with current active legislative debate and recently completed but not yet enacted rulemaking by the Department of Revenue. The state is making policy on this issue without revealing public information which could inform the citizens,” said Mike Hurst, director of MJI.

Hurst continued, “The Department of Revenue denied our open records request citing confidentiality of required tax records. But the agreement isn’t a required tax record because this is a voluntary agreement. Under existing U.S. Supreme Court precedent, the Department of Revenue cannot require an out-of-state company with no physical presence in Mississippi to pay a use tax. There is no exemption to Mississippi’s transparency laws which allows the Department of Revenue to deny review of these public records, so we have appealed their refusal to the Ethics Commission,”

Hurst noted several questions the information requested might answer.

• Has the state agency obligated taxpayers to any agreement?
• Did DOR agree with Amazon that, in exchange for voluntarily collecting these use taxes for DOR, DOR would promulgate regulations attempting to codify the application of use taxes to other out-of-state companies?
• Did DOR structure the agreement at Amazon’s request to give Amazon a competitive advantage over competitors?
• Did DOR agree to give Amazon some kind of benefit for voluntarily coming forward and agreeing to collect use taxes for DOR? If so, what are the details of that contract between a state agency and a collection company?
• Did DOR agree to shield third-party sellers on Amazon’s platform from collecting use tax?

You can read MJI's record request here; the DOR's refusal here, and MJI's complaint to the Ethics Commission here.

The Mississippi Justice Institute represents Mississippians whose state or federal Constitutional rights have been threatened or violated by government actions. It is the legal division of the Mississippi Center for Public Policy. To learn more about MJI, visit www.msjustice.org.

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