Day Shows Rural Communities Can Succeed

Rural communities in the South can succeed.

Thomasville, a small town in Alabama’s poor “Black Belt,” has thrived under the leadership of Mayor Sheldon Day. Indeed, Day has his folks believing it is “cool to be rural.”

Census data shows Thomasville with 4,209 residents and a low family poverty rate of 13% compared to 25% for the whole of Clarke County and 19% for Alabama. The town’s poverty rate has been in steep decline since 2010 as median household income jumped 28% from $28,234 to $36,146.

The 500 student Thomasville High School, with 48% minority students and 63% who qualify for free and reduced lunches, boasts a stellar graduation rate of 95%.

During his 20 years as mayor, Day has attracted over $700 million in capital investments and increased the number of industrial parks from one to five. He estimated 50% of the businesses along the Highway 43 by-pass in Thomasville have opened during his tenure and sales tax collections have tripled.

In 2013, Thomasville beat 62 other sites to secure the $100 million Golden Dragon Precise Copper Tubing facility, the first major manufacturer from China to locate in Alabama.

Day is especially proud of the partnership he built among the high school, Alabama Southern Community College, and industries. The dual enrollment program he championed in welding 14 years ago now includes industrial maintenance, information technology, pre-engineering, pre-nursing and sports medicine.

“Today there are more dual enrollment high school students at the Thomasville campus than regular students on Alabama Southern’s main campus in Monroeville,” Day said. Coupled with an intensive work-based learning program at the high school, the dual enrollment program, Day says, has been a “major catalyst to attract industry.”

Fascinated by his success, Betsy Rowell, executive director of the Stone County Economic Development Partnership, invited Day to tour her county and speak at her annual meeting. “He has obviously had great success with partnerships in his area.  Our local leadership needed to hear his message.”

How is Thomasville succeeding in an area where most rural towns struggle?

Day said when he was first elected mayor in 1996 he spent time searching out the best models for rural development. He found that model in Tupelo. He studied Tupelo and became a disciple of Vaughn Grisham, director emeritus of the McLean Institute for Public Service and Community Engagement at the University of Mississippi.

Day points to several similarities. One is the broad cooperative spirit he has nurtured. “In Thomasville, the school, chamber, industry, and city are all partners,” he says. “Everybody talks to each other to get things done.” Another has been his intense focus on developing the local workforce. And, like Tupelo did with Toyota, he collaborated with an adjacent county, Wilcox, to create an industrial park to locate a major industry. Now, he is copying Tupelo’s healthcare model and will soon build a new regional hospital.

No longer the student, he now lectures on how to succeed in rural communities at Auburn’s Economic Development Institute.

“His insight was invaluable,” said Rowell.

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Concentrated Power Waxing in Mississippi Legislature

Concentrated power in the Legislature waxes and wanes with the attitudes of rank and file members. At times, Speakers of the House and Lieutenant Governors have wielded dictator-like power. At other times, members have risen up and made the bodies operate more democratically.

Concentrated power is waxing once again as rank and file legislators cede power to their leaders.

The Mississippi Constitution intends for the House and Senate to be deliberative bodies wherein the elected members discuss and debate the diverse views of their constituents as they formulate policy and law, not fiefdoms ruled by powerful Lieutenant Governors and Speakers. Indeed, the Constitution awards no strong powers to either office except that the Lieutenant Governor shall be the convening “president of the Senate.”  The vast power amassed in these offices is yielded by rank and file members through their rules and through tradition.

Lt. Gov. Tate Reeves displayed his dictator-like power last week when he announced senators would not be allowed to consider House Bill 480. This is the bill to tax online sales. It was passed by the House and touted by Speaker Philip Gunn as a way to fund road and bridge improvements.

In his statement announcing the Senate “will not consider a proposal to tax Internet sales,” Reeves argued the bill may contravene a Supreme Court ruling. That point was argued in the House (and in Alabama where the law is working) but members, given the chance to decide for themselves, passed the bill. Using his power to enforce his personal position, Reeves denied senators the same opportunity.

Earlier in the session, Speaker Gunn played the same power game with regard to state lottery bills. As the Clarion-Ledger’s Geoff Pender reported, “He’s against it, and he doesn’t even want the House to vote on it.”

When Judiciary A Chairman Mark Baker had the audacity to ignore Gunn’s feelings and pass out a lottery bill, Gunn “barged into the committee meeting and had a private meeting with Baker,” Pender reported, adding it was not a cordial meeting.

The premature deaths of these revenue enhancing bills come as the deterioration of state finances has reached an ominous stage.

“The state’s economist and treasurer’s office last week gave lawmakers a dour report on the state’s economy,” reported the Clarion-Ledger on Feb. 21, “saying the state’s growth and other economic indicators are lagging behind the nation, it has lost population and state sales tax collections — its largest source of income — was at (minus) -0.5% for fiscal 2017 through January.

That was the same day Governor Phil Bryant announced his fifth “emergency mid-year cut” and again dipped into the state’s rainy day fund.

A week earlier, State Treasurer Lynn Fitch revealed Mississippi’s bond debt jumped $1.3 billion to a total of $4.3 billion over 10 years, a 43% increase (not including the state guaranteed multi-billion dollar PERS shortfall).

Outsiders looking at Mississippi and seeing revenue shortfalls, burgeoning debt, deteriorating roads, and power plays that abort possible solutions are unlikely to be attracted to our fair state.

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Shift Tax Burden as Recommended or Delay Tax Cuts

The Tax Foundation expert legislative leaders brought in last fall to advise them on tax reform recommended a shift in the state’s tax burden – away from corporate and individual income taxes to user-based taxes.

The key word is “shift.”

User-based taxes – gas taxes, sales taxes, use taxes, etc. – are already on the books in Mississippi. The tax expert called for these taxes to be expanded and corporate and income taxes reduced.

The Legislature has begun the shift away from corporate and individual income taxes with cuts that will begin phasing in next year.

What has not happened, yet, is any shift of taxes on to users.

And, thanks to, eh, subdued leadership on this issue, the Legislature may have missed the window to get it done.

While both Lt. Gov. Tate Reeves and House Speaker Philip Gunn favored the tax burden shift, explaining that meant some taxes would go up as others went down, they didn’t take the bull by the horns and sell it to the rank and file.

It appears the many Republican legislators who promised voters they will never ever raise taxes can’t distinguish a tax shift from a tax hike. Nor have anti-tax groups bought into the notion that a tax burden shift is a good thing. They like the down but fight the up.

A bill, modeled on an Alabama law, would allow the state to collect use taxes on Internet sales and, thereby, increase user-based tax revenue. The Mississippi Tea Party attacked it as a tax increase rather than a shift.

The tax expert told lawmakers they should expand gas taxes enough to cover road and bridge repair costs. That is the essence of user-based taxes – road and bridge users should pay to keep them in good shape. The Mississippi chapter of Americans for Prosperity and the Mississippi Tea Party both attacked this as a tax increase rather than a shift. Subdued legislative leaders abandoned it again this year.

The Speaker, who praised the tax expert’s recommendations, appears to have abandoned gas tax expansion altogether. Instead, he now proposes earmarking Internet taxes for road and bridge repairs.

Given the state’s deteriorating revenues, taxes on Internet sales should go to the general fund, like other use taxes, to offset both existing budget shortfalls and pending reductions from corporate and income tax cuts. That’s if the bill can even get passed.

The most palatable way to handle the gas tax is to phase it in over multiple years just like the tax cuts, e.g. a two-cent per gallon per year increase phased in over six years.

According to the tax expert, shifting the tax burden away from corporate and income taxes is pro-growth and will improve the state’s business tax climate. Likewise, investing in transportation infrastructure is pro-growth because businesses need useable roads and bridges to transport products.

However, there will be no tax burden shift unless Reeves and Gunn summon the gumption to make it happen. That lacking, they should delay tax cuts until state revenues are in better shape.

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Of Shortfalls, Cuts, Contrasting Oversight, and Reverse Repealers

Our Legislature faces deteriorating finances as they move to fund state government for next fiscal year.

Calling revenue collections for this fiscal year “disappointing,” the Daily Journal’s Bobby Harrison reported “revenue is $116 million or 4 percent below projections” for the year after falling another $18.5 million in January. In an earlier article he noted Governor Phil Bryant may have to cut existing state budgets again. Already the Governor “has been forced to cut budgets four times within a 12-month period and dip into the rainy day fund twice,” wrote Harrison.

Shortfalls and cuts this fiscal year bode ill for next year. Legislators will start with less and can expect less from next year’s collections.

Legislators’ efforts to up revenue are meeting opposition. A bill to tax fantasy sports gambling, eh, gaming, failed. A bill to push out-of-state companies to collect sales taxes (called use taxes), similar to one adopted in Alabama, is under attack by the Mississippi Tea Party. They also attacked Commissioner of Revenue Herb Frierson for getting Amazon to voluntarily collect taxes on its sales. Proposals to raise revenue to fix deteriorating roads and bridges continue to be attacked by the Mississippi branch of Americans for Prosperity.

Another hit to next year’s finances come as cuts to business taxes and personal income taxes, passed last year, begin phasing in.

In the face of these financial troubles, it only makes sense for state agencies to right size staffing. The House narrowly passed and sent to the Senate a bill allowing agency heads to ignore civil service rules to streamline operations.

House Appropriations Chairman John Read told colleagues that agency directors need this flexibility. The Clarion-Ledger reported legislative leaders hope to save $13 million from staff cuts. These cuts would add to the 1,999 unfilled positions legislators plan to eliminate. (Note to PERS – this will hurt.)

In other action, the House sent the Senate a bill to give the Governor authority to approve or disapprove operating regulations of state boards “controlled by active market participants.” These are mostly boards made up of licensed practitioners who approve licenses for new practitioners. A U.S. Supreme Court decision made such boards subject to anti-trust rules unless actively overseen by government, an issue the bill resolves. In addition to accountability oversight, the Governor should be able to improve efficiency and customer service among those boards not so good at such behavior. That would be a good thing.

In contrast, the House sent the Senate a bill authorizing the University of Mississippi Medical Center to establish public corporations with limited government oversight. The bill, modeled after one in Alabama, will allow UMMC to establish cooperative arrangements or affiliations with other health care facilities and providers to improve quality of care and lower health care costs. The bill also mitigates anti-trust rules for such arrangements. With appropriate financial oversight, it will be a good way to give UMMC equal footing with out-of-state hospitals encroaching on our state.

These last two items must go to conference, if passed by the Senate, to become actionable since the House meekly put reverse repealers in them.

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Inflated University Enrollment Costs Taxpayers

With tight state budgets looming for the foreseeable future, government operations must be rationalized to higher levels of efficiency and performance. Mississippi’s public universities should not be exempt from this process.

In last week’s column I suggested legislators look hard at university admission standards and out-of-state tuition. IHL’s current approach is to admit under-prepared students and to discount out-of-state tuition. This approach inflates enrollment, drives demand for tax dollars, and results in nonstop tuition increases and requests for new bonding authority.

Consider this. Since 2011 enrollment at our public universities grew from 80,516 to 82,654, but in-state enrollment fell from 61,917 to 57,717, a 7% decrease. The enrollment increase came totally from out-of-state students, growing from 18,599 to 24,939, a 34% increase. No doubt much of this growth results from the 2012 law legislators passed allowing IHL to discount out-of-state tuition.

If the goal is for universities to grow enrollment, things are hunky-dory. But if the goal is for universities to educate and graduate Mississippi residents, things are not so swell.

A compliant Legislature is part of the problem.

The 2012 law allowing discounted out-of-state tuition should be rescinded. Admission practices at the University of Mississippi (UM) and Mississippi State University (MSU) should be at least as high as major universities in neighboring states. And admission practices at the other six universities should incorporate a minimum 21 ACT score. Students with ACT scores as low as 16 can be admitted now.

ACT predicts at least 75% of university students achieving a 21 composite ACT score (18 in English, 21 in social science, 22 in math, and 24 in science) should earn a C average or better. That’s a pretty low standard.

However, the average ACT scores at four universities are below 21 – MVSU 17, ASU 18, JSU 19, and DSU 20. Scores at MUW and USM are 21 and 22, respectively.

The average ACT scores at UM and MSU are both 24. But averages at major universities in neighboring states are higher – Alabama 26, Arkansas 26, LSU 26, and Tennessee 27.

Admission standards at most universities are based on a combination of ACT (or SAT) scores and high school grades on the college preparatory curriculum. Major universities in neighboring states tend to admit students with at least a 23 on the ACT plus above average high school grades.

Eliminating out-of-state tuition discounts and incorporating into admission practices at least a 21 ACT score at six Mississippi universities and at least a 23 ACT score at UM and MSU would just about wipe-out the need for remediation, significantly improve graduation rates, cause dramatic reductions in university enrollment and staffing, and reduce demands for taxpayer support.

Along with these changes, alternative education pathways would need to be provided for the thousands of under-prepared students graduating our high schools. Community colleges are one existing pathway. Others would mitigate disproportionate impact to our historically black universities.

Political fallout would be intense, but taxpayers are demanding more efficient and productive government.

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Legislators Should Take Hard Look at University Admissions

USM cut out-of-state tuition by 40% “to reverse a 2,000-student enrollment dip by pricing a USM education below some public universities in nearby states,” reported the Clarion-Ledger.

IHL data shows the average percentage of out-of-state students attending Mississippi public universities is 30%. The averages for each university are ASU 24%, DSU 17%, JSU 23%, MSU 34%, MUW 15%, MVSU 23%, UM 41%, USM 21%.

Speaker of the House Philip Gunn led a panel of lawmakers discussing the high costs of education in Mississippi to focus in on “the $35 million colleges and universities spend annually on remediation for students that need extra help once they get to college,” reported Mississippi Today.

Enrolling under-prepared students impacts graduation rates. IHL data shows the average six-year graduation rate for Mississippi public universities is 50%. The rates for each university are ASU 34%, DSU 36%, JSU 39%, MSU 61%, MUW 39%, MVSU 26%, UM 59%, USM 45%.

“Mississippi’s postsecondary education system as a whole awards fewer bachelor’s degrees than the national average,” reported BestColleges.com.”

Hmmm.

The above information suggests our high schools are doing a poor job preparing students for university level work, we let far too many under-prepared students into our universities, and we’re having to hustle out-of-state students to keep our universities filled up.

Nevertheless, MSU President Mark Keenum, DSU President William LaForge, and IHL Commissioner Glenn Boyce “warned legislators that continued declines in state funding could cause serious damage to public universities,” reported Mississippi Today.

University officials appear to want more money to keep doing what they’ve been doing without promising better results. Albert Einstein called doing the same thing over and over again and expecting different results “insanity.”

More than one successful business leader in Mississippi have suggested that raising university admission standards could eliminate the need for remediation, dramatically improve graduation rates, and significantly reduce costs.

Gunn’s group also discussed the admission standards, reported Mississippi Today. The report said IHL Commissioner Glenn Boyce called them “one of the lowest” set of standards in the nation and that he and university presidents have begun discussing the pros and cons of the current standards for both in and out of state students. He called access to higher education a pro. “We don’t want to cut that access off,” he said.

Hmmm.

So, which is more important access or success?

Access to near certain failure at universities might be worth cutting off, particularly when access to community colleges is a viable, more affordable alternative.

There is no doubt Mississippi needs many more university graduates. But that doesn’t mean we need to underprice tuition to attract out-of-state students or allow thousands of under-prepared students to enroll.

State money is tight. Pouring more money into a flawed system seems ill-advised, if not insane. Legislators should take a hard look at university admission standards and out-of-state tuition. While raising admission standards and out-of-state tuition prices would be controversial and opposed by most universities, scarce budget dollars dictate hard looks across the board.

 

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Two Meridian Representatives Introduce Conflicting Bills

Meridian Republican Representative Steve Horne has introduced House Bill 305 to abolish party primaries for state and local elections.

Meridian Republican Representative Greg Snowden has introduced House Bill 496 to require party primaries for state and local judicial elections.

Hmmm.

Horne’s bill was referred by Speaker of the House Philip Gunn to the Apportionment and Elections Committee. Snowden’s bill was referred by Gunn to the Judiciary A Committee.

Hmmm.

Horne’s bill would put Mississippi elections in a similar posture to Louisiana’s. Instead of party primaries, there would be a preference primary held three weeks before each general election. Candidates could still qualify with their party of choice or as independents, but all candidates would compete in the preference primary. Any candidate getting a majority would be placed on the general election ballot without opposition. When no candidate gets a majority, the top two would run-off in the general election.

Snowden’s bill would remove judicial elections from their current non-partisan status. Parties would hold regular primaries to choose their nominees. Primary winners and (maybe) independents would run in winner-take-all general elections like all other officeholders currently do. (“Maybe” independents because Snowden’s bill as written says “Candidates for judicial office shall be selected through nominations made by the different parties of this state at primary elections.”)

Given the hyper-partisanship dominating Mississippi politics, Horne’s bill probably doesn’t have much chance. So the Speaker likely sent it to the Apportionment and Elections Committee to die, like his similar bill last year. For the same reason, though, he sent Snowden’s bill to the Judiciary A Committee where it might pass. It didn’t. The committee tabled the bill on a voice vote.

While Snowden’s bill might make sense from a hyper-partisan perspective, it’s not as sensible from a fiscally conservative point of view.

You see, elections cost money, lots of money. Right now there’s the first primary, the run-off primary, and the general election. Under Horne’s bill there would be only the preference election and the general election. Over time, eliminating extra elections would save wads of taxpayer dollars. This would be especially good for many small towns and counties.

Fewer elections covering shorter periods of time would also save candidates and their supporters wads of campaign money.

Indeed, a true fiscal conservative would argue that parties, not taxpayers, should pay for their primary elections anyway.

Snowden didn’t address election costs, but told the Clarion-Ledger his bill would raise the profile of judicial elections and level the field. He argued that because they now run only in the general election in November, judicial candidates face a potential runoff around Thanksgiving. “No one wants to come out and vote during the Thanksgiving week,” he said.

Hmmm.

A useful compromise might be to apply Horne’s approach to judicial and municipal elections but leave all else the same. It would accomplish Snowden’s goal to make judicial elections partisan but also Horne’s goal to save money on elections.

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