Can Trumpism Wean GOP from Big Money Politics?

Anger and frustration drive the voters who will support Donald Trump come whatever.

What I hear:  It’s about time somebody was willing to stick it to those (bad word) in Washington. And to Wall Street too. Those (bad word) in China and Mexico who steal our jobs need a lesson they won’t forget. Those (bad word) in the Middle East better watch out too. We aren’t gonna take their (bad word) any more. And liberals be (bad word), people willing to work and fight for this country are gonna be better off. (Bad words), America is gonna be great again!

It’s a popular message. Lots of folk feel this discontent, Trump folk to a great extent. Certainly, the message is a simple take on an ever more complex world, but it’s howling across America. More of the same from the same old politicians is unacceptable.

Well, not exactly.

Most folk who are going to vote for Trump will also vote to return their current Senators and Representatives to Washington. A handful of Senate and House seats may change, but not many. Now, a handful of changes could shift the power in the Senate, but probably not the gridlock that paralyzes its functions.

No doubt that’s why many Republican officeholders who can’t stand Trump are supporting him. They count on the system, as is, being able to thwart his (bad words) schemes.

Another group of Republicans, however, seems to be looking at all this differently. A recent article in the New York Times labeled these reform minded conservatives “reformocons.”

“These conservatives in think tanks, advocacy groups and the news media — and a few in political office — will be pressing for a new agenda: to update the Reagan-era playbook with an eye to working-class voters without a college education who form the Republican base,” said the Times article. “Ronald Reagan’s notions that policies that benefit the rich and big business lift all incomes now appear outmoded in an era of rising wealth inequality and stagnant wages.”

The article quoted conservative Republican Senator Mike Lee of Utah as saying, “What we have going on right now, and Trump’s position in the Republican Party, makes this recalibration that much more important, that much more urgent.”

Hmmm.

“Some within the party,” Lee added, “have been all too willing to wear the label of the Republican Party as being the party of Wall Street, or the party of the top 1 percent.”

The Times article suggests many conservative voters, particularly young ones, are fed up with party leadership “that pays them lip service while ignoring their concerns.”

The article notes that popular conservative voices, like Rush Limbaugh, will be reluctant to turn away from policies that favor big business and billionaires in favor of working class folk. But if Lee and the conservative National Review are really engaged something may emerge.

This is a movement working class Mississippi should watch closely.

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Tax Needs vs. Tax Cuts Bedevils Legislators

With legislators looking at taxes, some of us should be worried, some thrilled.

The need to study taxes results from weakening tax revenues along with a sluggish economy, and also because the largest tax cut in state history is pending.

Legislative leaders know they need a consistent, dependable tax base to fund state government. Republican legislators, now a dominant majority, know their voter base hates taxes and wants tax cuts. Where is the balance point – is there one – between these two points of view?

And, then, there is the real question. Who will pay?

So, who’s paying now?

The Institute on Taxation and Policy publishes tax information for all 50 states. As you might expect for Mississippi, the data shows sales taxes are a heavier burden on low income individuals while income taxes are a heavier burden on higher income individuals. Interestingly, when added together, the burdens pretty much balance out. The average sales plus income tax burden on both the lowest and the highest income quintiles was five percent of income in 2015. For the middle three quintiles, it was six percent.

Sales taxes and personal income taxes are the two biggest revenue sources for the state’s general fund at $2.0 billion and $1.74 billion respectively.

Looks like the tandem of sales taxes and personal income taxes is pretty flat and balanced for taxpayers.

Some proposals would upset this.

For example, Lt. Gov. Tate Reeves said his preference would be to phase out personal income taxes and replace them with consumer taxes and user fees. (The sales tax is our major consumer tax.) Reeves’ proposal would shift much more of the tax burden to low income individuals and much less to higher income individuals. The bottom three quintiles already spend almost five percent of income on sales taxes while the top quintile spends half that. So is Reeves’ proposal about tax equity or something else?

Unless something changes, business taxes will drop substantially. Over the past four years, legislators approved $350 million in tax benefits for businesses. This year they added another $270 million. While these benefits phase in over multiple years, they represent about ten percent of total state general fund revenues based on current figures. That’s significant.

Also passed this year is phased-in elimination of the three percent personal income tax bracket at a cost of $145 million.

Quite frankly, it appears that to keep the tax cuts already promised to businesses and individuals, legislators will have to substantially cut state spending and/or find new sources of revenue.

With regard to new sources, Alabama is looking at a state lottery. Mississippi already has constitutional authority for a lottery, but powerful casino interests keep it off the table.

Most states, and the IRS, tax retirement income (with some exclusions), but not Mississippi. Thus, in addition to pensions, any income that passes through an IRA, 401(k) or other tax deferral vehicle, forever avoids Mississippi income taxes (another plus for high income individuals).

Whatever, our legislators’ studies won’t reveal any easy answers.

 

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What Has Happened to the Golden Rule?

Sometimes it’s good to pause and reflect.

Studying verses from Colossians chapter 3, while sort of watching the political conventions, led me to pause and reflect on our culture in America today. Paul wrote in verse 12, “Clothe yourselves with compassion, kindness, humility, gentleness and patience.”

We can still see this in our communities today. But not so much on TV, the Internet, blogs, Twitter, and in politics.

Paul continued in verse 13, “Bear with each other and forgive one another if any of you has a grievance against someone.”

Don’t see many Republicans or Democrats practicing this with each other anymore, at least not in public. Don’t see it between conservatives and liberals, who seem never to forget, much less forgive.

Paul concluded in verse 14, “And over all these virtues put on love, which binds them all together in perfect unity.”

In so many ways our culture today seems to be in line with the opposites – anger, malice, pride, callousness, impatience, condemnation, and that which drives all disunity, fear and hate.

Paul’s comments align, of course, with Jesus’ teachings, which include verse 6:31 in Luke, “Do to others as you would have them do to you.” This Golden Rule used to be taught in school. Wonder if it is anymore?

Paul and Jesus were speaking to Christians and Jews, respectively. But the Golden Rule is not exclusive to Christianity. It pervades religion and philosophy:

  • Judaism – “What is hateful to you do not to your fellowmen. That is the entire Law: all the rest is commentary. Go and study it.”
  • Hinduism – “This is the sum of duty (Law): Do naught unto others which would cause you pain if done to you.”
  • Islam – “Do ye enjoin Right Conduct on the people and forget (to practice it) yourselves. And yet you study the scripture? (Law). Will ye not understand?”
  • Buddhism – “Hurt not others in ways that you yourself would find hurtful.”
  • Confucius – “Do not unto others what you would not have them do unto you.”
  • Artistotle – “We should behave to our friends as we would have our friends behave to us.”
  • Locke – “No one ought to harm another in his life, health, liberty or possessions.”

If the Golden Rule is so pervasive, why is it not still a mantra relished by our diverse culture? Well, we know why. Human nature tends toward the dark side. We must be led to the light.

So, then, is our problem lack of leadership? We don’t have enough leaders pushing us to the light?  Or, have we fallen so far that we refuse to hear and appreciate such leaders?

Ronald Reagan once said, “We might come closer to balancing the budget if all of us lived closer to the Commandments and the Golden Rule.”

That aligns well with what Paul suggested in Romans 14:19 (ESV), “So then let us pursue what makes for peace and for mutual upbuilding.”

Let us.

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Legislative Groups Should Target Declining Communities, Disconnected Youth

As legislators gather in their working groups to study programs and budgets, they should also take note of long-term phenomena with significant impacts.

One of these is a downward spiral that can cripple communities. It’s named “The Iron Circle of Poverty.” It’s called the “iron circle” because it is extremely hard to break. Few communities have the talented leadership and sense of common purpose needed to do so. Without help from state leadership and resources, many will not.

Big events or a number of small sustained events can trigger the downward spiral. Loss of major employers and natural disasters are big events that can kick-off the spiral. Population declines, loss of locally owned businesses, lack of new capital investment, aging housing stock, escalating property taxes, an aging and unskilled workforce, middle to upper class residential flight (usually white), growing criminal activity, and declining schools are examples of trends that can aggregate over time and launch the spiral.

Once started, the downward spiral gains momentum as interconnected facets of the community weaken each other, e.g. the local economy slows, quality of life begins to decline, housing stock and infrastructure age without repair, schools deteriorate and qualified teachers leave, the workforce degrades, capital investment slows, job openings dry up, the economy slows further…. Around and around it goes, spiraling downward. Along the way, poverty and crime surge.

What is the state’s plan, its policies, and its resources that communities caught in the iron circle can access? Oh, there are pieces and parts, but no comprehensive help for downward spiraling communities. Some legislative working group should look into this.

Another long-term phenomenon of great impact is the escalation of violence and gang activity among at-risk youth. Too many are becoming disconnected from traditional pathways that lead to success as adults. They become easy prey for gangs and fall into behaviors that leave them even more disconnected. Community leaders tend to look to the juvenile part of our criminal justice system to rectify the problem. But often, the problem is too widespread and deep rooted for the juvenile system to handle, much less resolve.

Research shows that communities wanting to interrupt gang recruitment and cycles of violence for youth must institute a range of complementary programs. Early childhood education is one key component, but not the end all. After-school programs, summer youth programs, youth employment programs, and safe places and counseling for abused children are examples of other programs that together with early childhood education can have impact. But, the programs must reach most at-risk children, not just a small percentage, and must be sustained over time.

State leaders tend to look at early childhood education, juvenile justice, mental health, law enforcement, and youth programs as stand-alone programs. They need to be considered as complementary components of a vital system if we are to effectively deal with our growing disconnected youth problem.

Budgets and taxes are important topics for working groups, but so too are long-term phenomena that destroy communities and youth.

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Republicans Struggle to Find Smart Way to Budget

“Starving the beast” is a popular conservative approach to governance.

“If they (legislators) don’t have the money, they can’t spend it,” one Republican operative explained, strongly endorsing this approach.

True enough, but as another longtime Mississippi leader told me, “‘Starve the beast’ is not a smart way to govern, in fact, it isn’t governing at all.”

Also true.

Supposedly, Republicans in charge of state government are seriously pursuing a smart way to govern. No, not the “working groups” announced by legislative leaders last week.

The long awaited performance-based budgeting and management system, first announced by the Legislature in 1994, would identify wasteful and ineffective programs whose funding could be re-allocated to programs that evidence says work. In other words, it would allow legislators to make smart, evidence-based budget decisions.

But, not yet.

Three and a half years ago, Lt. Gov. Tate Reeves and Mississippi House Speaker Philip Gunn created a partnership with the Pew Charitable Trusts and the John D. and Catherine T. MacArthur Foundation to develop an analytical system to support performance-based budgeting. The Legislature’s PEER Committee was assigned tasks to develop a state strategic plan, a comprehensive inventory of programs and costs, and performance measures and targets. The PEER Committee was to gather data to assess program performance. The Pew-MacArthur model was to calculate cost-benefit ratios for assessed programs.

Last year, the PEER Committee produced a comprehensive guide to ’splain performance-based budgeting to legislators. It included interesting results from a pilot application of the new model.

Unfortunately, it also showed this smarter budgeting approach remains many years away from fruition.  That leaves us with “starve the beast.”

The problem with this approach is that it starves important and essential programs.

Thus, deferred repairs to roads and bridges will continue to reach crisis status while hundreds of millions of dollars go for non-urgent building projects and tax cuts. The Department of Health will eliminate clinics and maternity services and the Department of Mental Health psychiatric beds and addiction units while less important and non-essential programs continue to operate. And so on.

As one of my more conservative friends commented, “Roads and bridges are wonderfully simple examples, but there are so many other areas that need to be functional.”

Quite frankly, the first thing that needs to become functional is the legislature’s basic budget process. Turned murky and complicated by the horribly misnamed “Budget Transparency and Simplification Act,” the budget process this past session featured pretend appropriations bills that were rammed through by leadership to get the bills past deadlines and into six-man conference committees. Leadership then allowed these committees to meet in secret, contrary to the rules. To cap it off, the committee-approved bills with real numbers were not given to members until the last minute, providing them with little opportunity for review or rebuttal.

Not a smart way to govern. Nor is starving the beast.

It’s possible the Legislature’s new working groups could turn things around. But, in Mississippi, politics trumps smart nearly every time.

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2016 Puts Reeves’ Fiscal Credibility on the Line

Lieutenant Governor Tate Reeves has put his fiscal credibility on the line.

The former investment banker told voters in 2011 he was “a true, proven fiscal conservative with a record of executive leadership who will take the difficult stance necessary to ensure our state makes the right financial decisions.”

Reeves appeared to make the right financial decisions during his two terms as State Treasurer and during his first term as Lieutenant Governor when he championed tight budgets, limited borrowing, tax cuts, and “ending the long-time shell game of spending one-time money on recurring expenses.”

Then came 2016.

That’s when tax cuts he championed came home to roost, reducing state revenues so much that Gov. Phil Bryant had to make two mid-year budget cuts, take money out the rainy day fund, and, then, call a special session to take even more out of the rainy fund.

During its 2016 regular session, the Legislature yielded to last minute pressure to pass the Budget Transparency and Simplification Act endorsed by Reeves. Among other things, this controversial bill grabbed millions from agencies’ special funds to shore up the fiscal year budget that began July 1st …once again using “one-time money on recurring expenses.”

Mounting evidence indicates that hasty calculations and underestimating the impact of multi-million dollar tax cuts will lead to a more substantial budget shortfall this year.

And, despite weakening revenue collections, Reeves championed and got passed $415 million in new tax cuts.

So, is the Lieutenant Governor providing “executive leadership” to make the “right financial decisions?”

Elected Republicans, State Treasurer Lynn Fitch, Insurance Commission Mike Chaney, and Secretary of State Delbert Hosemann, have criticized the Legislature’s fiscal actions.

Appointed Republican heads of major state agencies questioned the wisdom and legality of the new budget act and announced unanticipated layoffs and program shutdowns.

Democrats called for “a return to fiscal sanity.”

The unapologetic Reeves said he doesn’t respond to Democrats’ complaints, adding, “they’re frustrated.

This response and others lead some observers to wonder if the intelligent Millsaps College alumnus is becoming more politician than leader. They point to his weak leadership on efforts to raise taxes for needed road and bridge repairs and his reluctance to accept ownership of current fiscal problems, e.g. blaming the Revenue Estimating Committee for underestimating tax revenue, legislative staff for a $56 million revenue miscalculation, and the “Obama economy” for the sluggish state economy (other states’ successes notwithstanding).

In contrast to Reeves’ leadership, they point to how just retired House Appropriations Chairman Herb Frierson took responsibility for problems with the new budget act. During the special session he said, “It was my responsibility to be more diligent, and I wasn’t.”

In response to criticism, Reeves contends that state finances are sound, any budget act problems can be easily remedied, long-range tax policy shouldn’t be based on short-term revenue problems, and his tax cuts will ultimately spur economic growth and tax revenues.

The coming year will fully reveal how 2016 impacted Reeves’ fiscal credibility … and future electability.

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As K-12 Performance Improves, What about Colleges and Universities?

Education is the pathway to success. It starts early.

More children succeeding in kindergarten means more have a chance to succeed in school.

Children in every school district are doing better in kindergarten, reports the Mississippi Department of Education. “Our schools’ and teachers’ focus on literacy is making significant impact on student learning,” said Kim Benton, chief academic officer.

“Nearly 38,000 kindergarteners took the STAR Early Literacy exam in the fall with an average score of 502, below the benchmark of 530 that would indicate a student has basic literacy skills and is prepared for kindergarten,” reported the Clarion-Ledger. “But when taking the test again in the spring, Mississippi students’ average score rose to 703.”

More children learning to read in elementary school means more have a chance to graduate from high school.

More children passed the 3rd grade reading level test on their first try this year, 87% versus 85% last year. The average score was higher too. “This literacy legislation is transformational because helping a struggling child learn to read will truly change his or her life – the most important thing we can do,” said Gov. Phil Bryant when he signed his literacy initiative into law.

More children graduating from high school means more can go to college.

For the 2015-16 school year, the Mississippi Department of Education reported an 80.8% graduation rate, the highest rate yet. That’s up from 78.4% last year, and closing in on the national average of 82%.

More children graduating from community colleges or universities means more can achieve a decent standard of living. Statistics show that the more education people get, the higher their earning potential.

Uh oh.

For too many, the path through college ends with no degree and lots of debt.

Available data shows graduation rates for Mississippi colleges and universities aren’t terrific and hardly improving: 20% of community college students graduate in two years, 24.2% in three years; 26.4% of university students graduate in four years, 49.8% in six years.

Meanwhile, the cost of attending college keeps rising. Annual cost of attendance (tuition, room and board, books, etc.) at universities already exceeds 50% of median income. Average tuition at Mississippi’s 15 public community colleges will increase an average of 7% next year to $2,748. Average tuition at Mississippi’s eight public universities will rise above $7,000 for the first time this fall (it was $4,741 in 2008).

Mississippi has a high proportion of students with debt and one of the highest default rates in the nation. In 2014, average federal student loan debt was $26,177.

Mississippi community colleges are more affordable than universities; many now provide free tuition to recent high school graduates. Mississippi universities are more affordable than those in most states. But, low graduation rates and mounting student debt expose serious challenges to our education pathway.

As leaders succeed in getting more children through school and into college, they should make it a priority to get more through college with degrees and with minimal debt.

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