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Driving Economic Development the Tate Reeves Way

November 18, 2016

 

There are differing schools of thought on how a State Government can best drive economic development. One way is to put together incentive packages to attract specific businesses. These make great headlines and fill everyone with excitement over the future. It's fun to add incremental revenue to GDP projections and make graphs point more skyward than they did before! This requires the government to select which projects to invest in and to offer enough to industries to move in and make an investment. The downsides have been apparent through the years as companies structure themselves to take advantage of the incentives without committing to a permanent presence and investment. Secondary and tertiary benefits do not always appear as advertised. Lieutenant Governor Tate Reeves admitted that this is a common "done" approach around the country, but it is not the ideal approach. It appears that for the country, this is partly a zero sum game as states compete against one another for the same companies.

Our Lieutenant Governor Reeves belongs to a different school of thought on economic development. In his words:

 

Our number one priority is job creation, bringing better and higher paying jobs to our state. But I also have a political philosophy which says Government does not create jobs. Government's role is to create an environment which encourages those of you in the private sector to invest capital and create jobs.


Reeves believes that a fiscally conservative government is the first step towards increasing economic growth in our state. The idea is that a fiscally irresponsible government now means higher taxes in the future to pay for current mistakes. This is fairly uncontroversial, but, of course, the implementation is where philosophies can differ again.

The second thing that he addressed was having a tax code that is fair, flat and encourages economic development - not discourage. He spoke about eliminating taxes like the inventory tax and the corporate franchise tax. He believes that this will reduce costs to business owners, thereby making Mississippi a more attractive environment for businesses and making our existing business more competitive in the region.

He did note that Mississippi will eliminate the lowest tax bracket, effectively saving all Mississippi taxpayers $150 if they had more than $5,000 in income.

Thirdly, we must improve the educational attainment level of citizens of the state of Mississippi. Whatever your political beliefs, you must agree with this point. While there are many approaches to HOW to improve attainment, the great thing is that education is a fairly rigorously measured thing anywhere, so it should not be difficult to tell if we are making progress or not. Here, Lieutenant Governor Reeves and I agree fairly well at the top level. He repeated that one of the core functions of government is to provide public infrastructure, and I believe that education is one of the most important public infrastructures that a government can help provide.

There are a few methods that the state is currently using to improve education in our state. He spoke most proudly about the requirement for students to be able to read on a third grade reading level before passing the third grade. The importance of this should not be understated. Third grade was selected because a student should be functionally literate for the classes beyond that grade. If a student cannot read at a third grade level, they will struggle in all other classes beyond that point. This was not an unfunded mandate, he pointed out, as the state spent $50 Million dollars on reading coaches and other resources for teachers and students alike. To back this up, he also spoke of the Early Learning Collaborative programs that the state provided $9 Million of matching funds for local early learning solutions.

Without citing how many students were able to read on a third grade level before the act, he said that 95% of Mississippi students had passed this new level in the second year that the requirement was in place. It's impressive what the state can accomplish in education when they dedicate the resources to a specific goal.

He also mentioned school choice and the introduction of charter schools, but again, it's too soon to have enough data to talk about.

In his tenure as Lieutenant Governor, the state has eliminated 13 school districts through consolidation. In one extreme case, a school district with only 120 students had a superintendent that was paid $128,000. With consolidating school districts, schools get access to a bigger pool of resources and can hopefully reduce administrative costs overall. Although there may be some benefits to consolidation, it clearly has limits as the public school board moves further from the community. It is too soon, he said, to have data here. Again, there is clear potential for growth in achievement, but it depends on what actually gets done in the classroom.

One important theme with improving results while not spending more is spending resources in a more creative way. One example is career track education. More career track education has helped improve Mississippi graduation rates from 72% to 80%.

Overall, it was fairly positive listening to the Lieutenant Governor speak. While he did not really reveal anything groundbreaking, he was very clear and positive on progress that has been and is continuing to be made in the state. Reeves has had 13 years in public service since first becoming Treasurer, and there is always speculation that he is aiming higher. To that - a couple of people did keep calling him "Governor Reeves," an amusing slip of the tongue that may presage more.

Check out the full audio of his statement on our Soundcloud channel below!

 

 

 

 

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