On Initiative 42 & Following the Money

Sometimes you just get tired.  Today is one of those days where I find myself tired of reading misleading information about Initiative 42 and how some people who like myself call themselves conservatives have somehow made the decision that public schools are our enemy and thus all conservatives should suddenly just up and decide to drop their support of our Mississippi schools.  I suppose most of them and perhaps their children have never even attended a public school in their life and maybe this is what has led to such opposition to them?  I don’t know for sure what the motivation is, but I am a conservative and such opposition to the idea of public schools seems elitist and foreign to me.

Take for example the newly revised “fiscal analysis” to be listed alongside Initiative 42 on the ballot.  Let’s see… the so-called, somewhat impartial sounding “fiscal analysis” says (and the initiative opposition’s talking points coincidentally seem to also say) that Initiative 42 would cost a little over $200 million to adequately fund our schools in line with existing state laws already on the books. This amount has been implied would cause scary cuts to other agencies and/or some sort of tax increase. Apparently, some agency heads were called into meetings with leadership from the legislature who oppose Initiative 42 telling them that if the initiative passed they would need to show how to immediately drastically cut their budgets for their respective departments with implied job cuts (http://www.clarionledger.com/story/news/politics/2015/07/07/agency-cuts-education/29814897/). Of course, Initiative 42 has a phase in provision to be slowly implemented out of only GROWTH in state revenue outlined from the onset on the original initiative petition itself; no growth in revenue for a year means that year no new money into education and it’s put off until the next time there is growth above and beyond existing revenue (http://42forbetterschools.org/wp-content/uploads/2015/04/42-Phase-In-Plan-Fact-Sheet-FINAL.pdf). So which is it? Would Initiative 42 be such a shock to the system that it would cause immediate budget cuts from prisons, roads, institutions of higher learning, etc.? Or are these just scare tactics with the intent of hurting support of Initiative 42 by making other state agencies (and their employees) fearful of giving education adequate funding? In answering that question, I found today’s article in the Clarion Ledger interesting which also led me to look up a few other facts, especially in relation to Lt. Gov. Reeves’ and Speaker Gunn’s opinion of the financial strain of Initiative 42 for public schools (http://www.pressreader.com/usa/the-sentinel-record/20150908/281762743030565/TextView).

According to the article (http://www.clarionledger.com/story/news/2015/09/11/developer-defends-sealing-renaissance-documents/72100068/), over $155 million in tax breaks were given to “cultural retail” businesses last year. This apparently includes quite a few strip malls one of which (not included in the $155 million) is proposed to be located in Madison County and will have several retail stores. The Madison County strip mall stands to get a little over $30 million for its project this year. This has gotten the attention of some and documents have been requested asking for communications and other related documents between the developer of the strip mall and state officials. But, conveniently it seems that there was a law passed by the legislature several years ago shielding these communications from being released to the public in cases where “select” retail businesses are “chosen” to receive these millions in tax cuts.

According to the article, State Sen. Chris McDaniel, R-Ellisville, said, “I think full transparency in regard to how state taxpayer money is spent should be required,” McDaniel said, “Generally speaking, people have every right to see how their money is spent. … I find it difficult to see what the confidential data would be regarding a strip mall. That strikes me as being a bit unusual.” Yes, I agree a bit unusual.

According to the same article, State Sen. Blount, who works in commercial real estate, said, “I’m all for commercial retail development — that’s my job much of the year. But the taxpayers of the state don’t need to subsidize low-wage retail development that competes with their own cities and counties. It does not enlarge the pie. It makes no sense for taxpayers in Pelahatchie or Jackson to pay to help their competition, to hurt their own tax base.” So these huge tax breaks aren’t given across the board to retail establishments all over the state, they are selected for certain communities and certain developments. Blout goes on to state, “In the case of a Nissan or Toyota plant — they’re bringing something new, expanding the pie, growing our economy with high-wage jobs and not competing with existing businesses.” “But the taxpayers of the state don’t need to subsidize low-wage retail development that competes with their own cities and counties.”

I can see both Blout’s and McDaniel’s points. Yes, one would think this would be something which taxpayers would be able to actually get details about and a law on the books shielding this information for a strip mall that is on track to basically be given $30 million from the state would seem like common sense. But, a few weeks ago, we saw Speaker of the House Gunn and Lt. Gov. Reeves both cite another state law shielding their own emails and correspondence with lobbyist and others about efforts, motivations, & strategies to defeat Initiative 42 (assuming such documents exist as they have refused to say one way or another). It seems that transparency in both cases is something which does not necessary exist as certain parties are given exemptions to public records laws by the legislature. Of course, Speaker Gunn and Lt. Gov. Reeves are both outspoken opponents of Initiative 42 and also outspoken advocates of charter schools some of which are run by for-profit companies (which there is at least one out of state charter school lobbying organization which has given extremely large donations to many state candidates who advocate for charter schools). One would also think that spending money on a retail establishment has little economic growth incentive outside of that particular community. Personally, I am going to see little return or improvement based upon a new Costco store being put into a strip mall outside of Jackson with a cost of $30 million to us as taxpayers. Why not $30 million for a retail establishment in New Albany or Picayune? Better yet, why not the $150 million approved last year and the $30 million the strip mall developer is set to receive being used toward luring another large manufacturer like Nissan or Toyota which could provide enough higher wage jobs to improve a whole region of the state?

So $150 million approved in tax cuts for selected “cultural” retail stores and $30+ million on deck to be provided from the state for a local strip mall in Madison County. Funny, I never heard anything about agencies having to be cut to provide these hundreds of millions. But, wait the interesting part is still to come.

According to the Mississippi Business Journal, March 6, 2015, in reference to Lt. Gov. Reeves (chief opponent of Initiative 42),

“The Republican says Monday he wants to increase the size of his tax cut to $550 million over 15 years. That would include $300 million in income tax cuts, eliminating the first $350 of income tax liability for individual and corporate taxpayers.

Reeves would keep his plan to phase out Mississippi’s $242 million corporate franchise tax.” (http://msbusiness.com/2015/03/reeves-proposes-more-income-tax-cuts-bumping-total-to-550m/)

That’s right, the state is so strapped for cash that a proposal to fund public schools all over the state to improve education, repair facilities, buy buses, and add teachers is going to cause the state such financial pain (even though it has a plan included to be phased in out of growth which these scare tactics totally ignore) that agencies must be slashed, taxes raised, and virtual anarchy would seem to reign as the state reached financial chaos paying the $200 million (their numbers for total adequate funding this year ignoring the growth phase in plan) this year is supposed to be the SAME state which the same person is telling us can cut $550 million in the next 15 years for corporations and individuals. Surely, there were meetings with department heads to discuss how this tax cut would result in their agencies and departments being slashed? No? Okay…

I mean that is only $36.6 million a year though. But, wait that doesn’t take into account the $150 million given to cultural retail businesses last year, does it? Come to think of it, that doesn’t really take into account the over $30 million that one strip mall in Madison is on track to get this year. I am no accountant, but how can money for one not cause cuts and/or tax increases and money for another cause cuts and/or tax increases? But, I will concede that only the tax cuts proposed by Reeves would cut into revenue currently coming in as the tax breaks being dished out to the “select” retail businesses would only come out of future revenue (that is totally assuming that the sales/revenue of these new retail establishments isn’t simply taking sales/revenue away from existing retail establishments who currently pay taxes nearby as a new, bigger, flashier, store is put in literally down the road from the old one with the new one getting the breaks). But, then we have another interesting statement in the article from the Mississippi Business Journal which just piles it on even more.

According to the article, “House leaders have proposed phasing out the $1.7 billion that Mississippi collects from personal income taxes over 15 years or longer, depending on revenues.” Now remember who the other chief opponent of Initiative 42 was mentioned above, the leader of the Mississippi House of Representatives, Speaker Gunn. Yes, that’s right 1.7 BILLION (with a “B”) in addition to the other tax cuts proposed! That would be $113 million per year in straight cuts to existing state revenue per year for this proposal alone! But, wait still no talk of drastic or any cuts whatsoever to state agencies? Still no talk of raising other taxes to pay for these billions of dollars? It doesn’t seem to be the case. So we are up now to what, $113+$36.6 million = $149 million per year each and every year of lost revenue that seems to not cause any cuts or tax increases (of course that’s not counting the $150 million or so mentioned earlier as tax cuts for “cultural” retail or the $30 million possible this year for the Madison strip mall).

****CORRECTION****    –    I stated above that the proposed $1.7 billion tax cut would be a total for the next 15 years and would average out to $113 million per year.  This is untrue and apparently my interpretation of the information read was clouded by realistic thinking.  But, according to the Tax Foundation, the $1.7 billion tax cut proposed by Speaker Gunn was not a cumulative total for all 15 years.  No, the $1.7 billion was how much the total tax cut proposal would (conservatively) be EACH AND EVERY YEAR once it was fully implemented at the end of the 15 year phase in with a total elimination of the entire Mississippi income tax by 2030!  That amount is just simply staggering and definitely makes the contrast with the comments about adequate education funding almost ridiculous.     ****CORRECTION****

My friends, I am for tax cuts as much as the next person. I don’t enjoy paying my taxes. However, the relatively small amount I pay in state taxes in relation to federal does not really bother me, if the money is being spent on things that really benefit all of us. But, what I really don’t like is being misled. I don’t like someone making out to me that all money needed for schools to be adequate would have to come out this year (the $200 million the leadership had placed in the “fiscal analysis”) in one lump sum when there is a plan in place to phase it in over years of growth.  I don’t like someone or group of someones making out to me and the people that work for good state agencies like the highway patrol, prisons, institutions of higher learning, highway department, and others that these agencies would have to face cuts and potentially people to lose their jobs should schools get “adequate” funding when out of the other side of their mouth and by their own statements they show that they have plenty of money to dish out in financial incentives for certain few retail businesses which only impact certain communities and any other corporate or other tax cut they might want to give. I don’t like it when communications take place about defeating a measure to help fund our schools put on the ballot by the people between our legislative leadership and lobbyists and then the same leaders use laws of their own making to allow them to hide these communications from the public (when if they worked in virtually any other government branch in the state they would be bound to share them). I don’t like it when the Legislative Budget Office releases one non-slanted sounding fiscal analysis of Initiative 42 and then has meetings with other legislators and comes back months later with one which implies that cuts or tax hikes would result and this is placed on the ballot as a fake “non-biased” description. I don’t like it when instead of wanting to debate the issues of adequate funding and having a straight up or down vote on the ballot for Initiative 42 (like we have had for every other initiative ever placed on our ballot), the legislative leadership uses for the very first time a provision to list their own “alternative” calling it “42A” with an almost the same (like saccharin vs. sugar) wording and title with the potential to simply confuse voters who support the original initiative and are not expecting something drastically different on the ballot this time than the ones they have voted on in the past. No, I don’t like it when shenanigans and tricks are apparently being used to confuse and scare people at almost every turn instead of just debating the ideas and merits. There is one thing that I do like; I do like the idea of children all across this state having a fair shake at an education with class sizes, facilities, and programs which only adequate funding can provide. Personally, I think that that type of spending is an investment in which we can all reap the rewards from for years to come. I am sorry that this means that the legislative leadership would not be able to continue to not follow their own formula to fund our state schools. I am sorry that this might mean whatever developer in Madison County or whichever “special” place the state wishes to bestow financial gifts upon will have to reach deeper into their own pocket before putting in a big box store to take business away from the existing one down the road. I am so very sorry that basically the legislative leadership will no longer have a pile of money which they can spend however and give to whomever they please at will. Well, I must admit, I really am not that sorry at all.

All of this being said, if you oppose Initiative 42 based upon your own understanding of its merits, I certainly respect that fact. However, I would encourage you to have a look at the scare tactics, half-truths, and seeds of confusion being sown by some to defeat adequate funding at seemingly any cost. Then perhaps examine if it might be these exact same individuals who have given you the other details you currently believe to be problematic about Initiative 42. What does it say to you about the nobility and merits of a cause that requires such efforts to confuse goodhearted and honest Mississippi citizens to keep them from voting for the initiative originally intended with an almost identical “alternative” and a ballot wording that any objective person would have to agree is confusing to cast with confidence? I hope you will consider doing a little independent research and explore for yourself whether these other claims, some of them quite outlandish and seemingly designed to push hot-button issues among good and honest people, might or might not be totally true as well. It is my belief that you as a voter have the intellectual capacity to decide what to believe on your own when given real facts and you do not need to be confused or prevented from thinking on your own and then being able to successfully vote without being confused based upon your decision. As for me, I will vote for Initiative 42 and adequate future funding for the open, public education of children all across Mississippi.

– Clint Stroupe

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