Honey, We Shrunk the General Fund: Medicaid, Education, Gang Debates Loom in 2018 | Jackson Free Press | Jackson, MS

Honey, We Shrunk the General Fund: Medicaid, Education, Gang Debates Loom in 2018

Lt. Gov. Tate Reeves plans to continue to shrink state government in the upcoming legislative session by limiting spending and finding efficiencies.

Lt. Gov. Tate Reeves plans to continue to shrink state government in the upcoming legislative session by limiting spending and finding efficiencies. Photo by Arielle Dreher.

In sunny September, leaders of Mississippi agencies went before lawmakers to make their annual requests for funding. Inside the crowded room on the first floor of the Woolfolk Building, the mood was awkward. State economist Darrin Webb reminded lawmakers of the state economy's "lackluster" performance post-recession.

At one point, all of the public university presidents went before the group of senators and representatives tasked with crafting the state budget. A few university presidents sat with Commissioner Glenn Boyce, while the rest lined up along the wall behind them. Mississippi State President Mark Keenum told lawmakers that higher education is crucial for creating an educated work force in the state.

"I love this state, and I know you do, too. I don't want to see Mississippi left behind," Keenum told lawmakers.

A few months later, the Joint Legislative Budget Committee released a stringent budget that expresses the reality in Mississippi—something has got to give. Even a cursory look at Mississippi's finances show that few state agencies can expect the same amount of funding they have now. But this is by design.

The Republican supermajority plans to continue to shrink the size of government in 2018. Lt. Gov. Tate Reeves has made these plans abundantly clear in past years, passing the state's largest tax cut ever in 2016 and killing the transportation bond bill in 2017. He was not available for an interview prior to the legislative session but sent the Jackson Free Press a statement detailing his priorities.

"I will not operate state government like they do in Washington, D.C.; we will only spend the tax dollars that we are taking in," Reeves said in the statement to the Jackson Free Press.

The Joint Legislative Budget Committee, made up of lawmakers, adopted a budget that cuts the State's general fund by $66.1 million or 1.3 percent. The legislators' plan includes small increases for the Department of Public Safety to fund 60 state troopers who will graduate from in 2018. Beyond that, a handful of agencies and programs, including the Mississippi Adequate Education Program, financial aid and Child Protection Services, will receive the same amount of funding as in 2017, if lawmakers adopt their leaders' budget recommendations.

"I also want to look for more ways to limit spending," Reeves said. "For example last year, the Legislature put a hold on the purchase of new state vehicles. Previous efforts saved us about $20 million total. I would like to implement more efficiency measure likes this to save tax dollars."

The majority of agencies can expect cuts, however.

The governor's budget priorities are a bit outside the lawmakers' suggestions. Gov. Phil Bryant emphasized spending on education, including a potential plan to fund community colleges.

"The Mississippi Works Scholars Program proposes to incentivize high school seniors and adults already in the workplace by offering free community college degrees, certificates and apprenticeships necessary to gain employment in these opportunity occupations," Bryant's budget recommendation says.

Democrats plan to introduce legislation (again) to stop the Taxpayer Pay Raise Act from taking effect. The tax cuts are already eating away at the State's coffers this year. In fiscal-year 2019 (which begins in July 2018), the tax cut will divert more than $33 million away from the general fund.

By 2028, the full cut will cost Mississippi more than $416 million annually.

Sen. David Blount, D-Jackson, said he will introduce a measure again to reduce the cuts. Rep. David Baria, D-Bay St. Louis, said he plans to introduce similar legislation on the House side.

"We should at least postpone it until we are back on our feet fiscally," Baria told the Jackson Free Press, saying the tax cut could have included triggers to not take effect until the Mississippi economy has grown 3 to 4 percent. It is not projected to grow at all in the near future, Webb told lawmakers this fall.

Rewriting MAEP

Top Republican leaders plan to change, scrap or re-write the Mississippi Adequate Education Program in 2018. Last year, legislative leadership hired EdBuild, a New Jersey school funding nonprofit, to evaluate and suggest revisions to the State's education funding formula, called MAEP for short. The EdBuild proposal suggests additional funding for certain student populations, called weights. Students in poverty, students who need special education and those who are English-language learners would all receive more funding.

At the 2017 annual Hob Nob event, Reeves and Gunn applauded the proposed weights that include extra funding to help students in gifted programs and high schools that have college- and career-prep programs.

Gov. Bryant supports the education-funding formula rewrite that House Speaker Philip Gunn, R-Clinton, and Reeves plan to work on in 2018.

"I am again calling for an updated funding formula that is focused on student needs. In January, a group of experts retained by the Legislature released a lengthy report with a number of worthy recommendations, including needed changes to the weights applied to career and technical education," Bryant wrote in his budget recommendations. "I look forward to an open and robust debate about the funding formula reforms during the 2018 legislative session. While this budget recommends level funding for MAEP for FY2019, adjustments may be needed to accommodate a new formula."

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Rebecca Sibilia, the director of education nonprofit EdBuild, answered questions from lawmakers last year in a tense environment when Republicans attempted to rush a re-write of the funding formula in 2017. The formula re-write is set for 2018, instead.

The EdBuild proposal is not meant to be a list or a "menu" of suggestions, Director Rebecca Sibilia told the Jackson Free Press, but instead meant to be taken and enacted as a whole to be effective.

"The bottom line is our recommendations were written in order to ensure that Mississippi is thinking about a holistic way of not just funding schools but resourcing schools and putting the right kind of accountability and transparency in place to happen at the local level," Sibilia said. She acknowledged that it is up to the Legislature to decide how to use the proposal.

She hopes lawmakers will not try to cherrypick the ideas, though. "In no instance were we considering this to be a menu of options. We put forward a holistic set of recommendations that were intended to work together," Sibilia said.

Last session, few lawmakers saw a draft of the legislation containing funding formula changes, and ultimately, a bill never appeared. So far in the off-season, Republicans have kept their proposals behind closed doors, leaving Democrats in the dark about any proposals, but changes seem eminent.

Nancy Loome, with the Parents' Campaign, believes a shortcoming of EdBuild's proposal is the lack of a formula to calculate the base student cost, which MAEP includes.

"(That) means in the legislation, there will be nothing written in as a formula that will determine what that base cost is. It would leave it up to the Legislature every year," Loome said at an education-funding panel at Millsaps in November.

The EdBuild proposal recommends a higher base student cost than the Legislature currently funds but does not recommend language for legislation. The weights could still apply regardless of how much funding the Legislature chooses to appropriate to the funding formula.

"When there's no base cost written in with no formula, you have no way to hold the Legislature accountable because there is no formula for the Legislature to yield a number that is full-funded, so we don't know what full funding is," Loome said in November.

Currently, MAEP provides a way for school districts and organizations like the Parents' Campaign to see how underfunded each district is year over year, leading to ballot initiatives like Initiative 42 in 2015, which would have forced the Legislature to fully fund the formula. Depending on how lawmakers write the EdBuild proposal into legislation, "full funding" could mean whatever the Legislature decides each year.

Grant Callen, who lobbies for "school choice" for Empower Mississippi, believes the current funding formula is broken and wants the Legislature to replace it. He said the EdBuild proposal is more equitable and transparent than MAEP but was disappointed that the proposal did not make specific-enough recommendations for local control. Callen emphasized the importance of parental involvement in student funding.

"The next step is to make sure parents have control of how education dollars are spent on their students," Callen said at Millsaps in November.

"No one is more invested in the outcome of our educational system than students and parents, and if parents see that their child is not being well-served in the setting they're in, they must have the freedom to move that child to a better public school, a charter school, a private school and let the funds follow the child to make sure those funds are accomplishing what the Legislature intended."

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Sen. David Blount, D-Jackson, (left) said he plans to introduce legislation again to stop the Taxpayer Pay Raise Act from taking effect, due to its detrimental impact on the state’s general fund.

Both House Minority Whip Baria, and Sen. David Blount, say they had not seen the legislation for a new funding formula as of press time.

"I don't vote on reports; I vote on bills. And the reason there was never a bill introduced and there was never a vote is because every single member of the Legislature, whether they are Republican or Democrat(ic), will have the same basic questions," Blount said at Millsaps in November. "What is this going to cost? How is this going to affect my local school district, the school districts I represent? Are they getting more money or less money? And what is this going to do to local property taxes?"

The EdBuild proposal is more equitable than MAEP, in part, because the nonprofit recommends that the Legislature eliminate a part of the current formula called the "27 percent rule."

The rule held districts responsible for 27 percent of funding, meaning the State had to kick in 73 percent of funding for public schools. This provision redirects $119 million to 53 districts, and in essence, "biases districts that have a high property-tax base, thereby providing more money than required by the formula," the EdBuild proposal says.

The 27-percent rule creates an "environment in which districts who could arguably raise more money for schools because of their wealth are instead receiving more money from the state to offset their costs than their less affluent peers," the report says.

In EdBuild's data, 53 school districts benefit from this rule, receiving thousands or millions more in funding depending on the number of students in the district.

Sanford Johnson, deputy director of Mississippi First, which lobbies for charter schools, said he supports EdBuild's recommendations but warned against its effectiveness if lawmakers tinker with it too much.

"If the Legislature follows those recommendations ... then I think we'll end up with a good funding formula that will be more equitable than what we have right now," he said at Millsaps in November. "If we start making too many changes to it, there's a chance that we're not going to come out better off, so that's something everyone needs to watch very closely."

Reeves and legislative leaders have been vague about what changes they intend to make to the funding formula.

"Through a new funding formula that prioritizes instruction over administration and support for teacher training and programs that work, we can achieve our goal to give every child a chance at success," Reeves said in the statement to the Jackson Free Press.

Medicaid Fight Coming

Legislation authorizing the State's Medicaid program is up for renewal in the 2018 legislative session. This means lawmakers could easily just reauthorize the program by simply expanding the applicable date. More likely, they might amend how the Medicaid program works between the state agency and the managed-care companies that provide health insurance to Mississippians who could not otherwise afford it.

The Division of Medicaid, under the governor's direct purview, is in a state of turnover. Longtime leader David Dzielak resigned earlier this month, and Gov. Bryant replaced him with longtime aide and counsel Drew Snyder. This change-up comes on the heels of heated pre-session Medicaid meetings and rumors of a possible transfer of eligibility verification from Medicaid to the Mississippi Department of Human Services.

During Dzielak's last meeting before he resigned, House Democrats expressed concerns to him about moving eligibility verification—the process of applying and being approved for medical coverage—to MDHS.

In House Medicaid meetings in December, Rep. Jay Hughes, D-Oxford, brought up MDHS' involvement in lawsuits. In 2017, MDHS sent millions of dollars back to the federal government after not using all of the Temporary Assistance for Needy Families funds allotted to the state. The U.S. Department of Justice is also investigating MDHS' food-stamp program.

"Do you think that it helps patient outcomes or improves services to transfer eligibility of Medicaid to DHS?" Hughes asked Dzielak in December.

"What I can say is Medicaid has some of the best enrollment numbers. We get audited all the time, periodically, by CMS (Centers for Medicaid and Medicare Services) and federal auditors," Dzielak said. "... Part of that audit is looking at individuals who are on the program who shouldn't be on the program. ... We have some of the lowest number of errors in eligibility determination."

"(So) we would be transferring something that's working right to something that's broken?" Hughes asked.

"Potentially," Dzielak said.

Two days later, Dzielak turned in his resignation, which is rumored to be forced—not voluntary.

Rep. Steve Holland, D-Plantersville, who used to be the Medicaid chairman when the Democrats controlled the House, pointed out that Mississippi has the most beneficiaries per capita on Medicaid and also one of the lowest administrative costs to run the program in the country.

"I would just submit to the committee for your consideration right before Santa Claus comes to see you or if he does, that you search your heart very carefully before you make a harebrained mistake of tearing up one of the best eligibility systems in America," Holland said.

The Mississippi Health Advocacy Program polled more than 600 Mississippians about the transfer in eligibility verification and found that 53 percent opposed the transfer to MDHS.

"The results of this poll make it clear that a vast majority of Mississippians do not support moving Medicaid eligibility determination to MDHS or reducing Medicaid coverage. Also, the poll strongly indicates that the public tolerance for political gamesmanship with our Medicaid program is low," Roy Mitchell, executive director of the program, said.

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David Dzielak told the House Medicaid Committee that food security, housing and safety are all social determinants that could help improve conditions of Mississippians last week. Soon after, he submitted his resignation after serving as the executive director of the Division of Medicaid under Gov. Phil Bryant.

"Mississippi legislators who fail to recognize that Mississippians trust and value our state Medicaid program, do so at their own political peril."

Republicans constantly express frustration at the ballooning Medicaid budget, always asking the agency to cut costs. The division will ask for another deficit appropriation in the new year.

Rep. Becky Currie, R-Brookhaven, asked both managed-care companies in the state, United Healthcare and Magnolia, if the Division of Medicaid sanctioned them for violating state Medicaid laws.

The answer from leaders of both companies in December hearings was a resounding "no." Currie expressed frustration on behalf of several medical providers in her district who serve Medicaid recipients but have to wait to get reimbursed or credentialed by the managed-care companies outside the 60-day window prescribed in state law—or never do. She plans to introduce legislation to force the companies to comply with state law or not be compensated.

"I don't want to be all fluffy because there's nothing at all fluffy going on with managed care. We've got to do better, and obviously y'all have got another contract even though your costs have gone up," Currie told the CEO of Magnolia Mississippi in December.

"We have got to put something in this ... bill that sanctions them when they don't obey the law for credentialing and (when) they don't pay the providers for their work," Currie said.

Speaker Gunn said in a statement to the Jackson Free Press that the Medicaid budget "is a big concern."

"It continues to grow, and this needs to be addressed," he said.

Declaring War on 'Gangs'

Sheriffs, investigators and prosecutors in the state plan to push their gang bill, which died in conference last year, once again in 2018. Tony Lawrence, the Jackson County district attorney on the Gulf Coast, said the legislation would address the state's "gang problem."

The JFP's 'Preventing Violence' Series

A full archive of the JFP's "Preventing Violence" series, supported by grants from the Solutions Journalism Network. Photo of Zeakyy Harrington by Imani Khayyam.

The legislation would widen the state's existing gang law, expanding the definition of gangs and criminal gang activity, as well as adding an additional charge for criminal gang activity. Lawrence told the Jackson Free Press that the legislation is intended to dissuade gangs from recruiting members and hurting or threatening former gang members who cooperate as state witnesses.

The state's gang law already has enhanced penalties for crimes connected to gang activities, but the new legislation would make criminal gang activity a separate charge altogether, meaning more time behind bars for those convictions.

In 2015, Lawrence said he had two gang-related murders in his county, which motivated him, along with local law enforcement, to "declare war on gangs." Since then, the DA said he realized he needs changes in state law to prosecute gang activity. The State of Mississippi still has the burden of proof in cases, but if prosecutors can connect criminal activity to gangs using the new legislation, the sentences would be potentially longer.

"We're trying to make sure that the law will fit those kind of actions, and hopefully gang members will realize that it's not going to be tolerated anymore," Lawrence told the Jackson Free Press.

Those convicted under the new criminal gang-activity charge would have to serve at least 50 percent of their sentences before they are eligible for any kind of program or parole.

"Prosecutors believe that if you're convicted of criminal gang activity that it should be a day-for-day crime, like certain crimes we have in Mississippi, but I don't know if we will be able to convince enough legislators to make it day-for-day," Lawrence said. "But we certainly believe it should be a crime of violence, which would mean you have to serve at least 50 percent of your crime before you could be eligible for any kind of program that will release you early."

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While the intent of the legislation is also to dissuade gangs from recruiting youth, Lawrence said the bill will not change or address any parts of youth-court law, or pick out certain crimes where youth are eligible to be tried as adults. Currently, if a minor commits one of several crimes listed in state law, he or she can be charged as an adult in circuit court. Ultimately, the legislation will enact harsher sentencing for men and women found to be in violation of state law and connected to a gang—which would be easier to prove under the new gang law.

Research shows that three strategies work for early intervention for youth at-risk for gang involvement.

"The first strategy is to intervene at the individual level with at-risk children, particularly disruptive children. The second strategy is family prevention, and the third strategy is school- and community-level prevention," a 2010 research brief by James Howell for the U.S. Department of Justice says.

Lawrence could not say whether harsher sentencing works for gang members or if other states have tried the approach Mississippi is considering.

"I don't know what other states are doing. I know it's a problem in other states. My response to that would be here's one thing I do know: If I have an individual who's committing acts of violence in the community, and I put him in jail, the one thing I do know (is) he is not going to commit acts of violence in the community because he's in jail," he said.

"I don't need research to tell me that if I have a violent gang member participating in criminal gang activity in the streets, if we put him in jail, we've made the streets safer."

Many prisons, however, are known for gang activity, and prisoners often come out of prison engaging in more violent crime than when they went in.

"People who join gangs in prison are also more likely to reoffend and to do so more quickly, thereby undermining rehabilitation efforts," researchers David Skarbek and Courtney Michaluk noted in an article for Politico on the importance of breaking up the largest prisons in the U.S. in order to weaken prison gangs.

Lawrence said prosecutors are not trying to create more problems, but simply want the ability to get the people they know are committing crimes, who they know are affiliated with a gang in some way, behind bars.

A Crippled Crime Lab

Mississippi's state crime lab is in desperate need of funds and personnel. So far, proposed budgets do not include a pay bump for the medical examiner, but Joel Smith, president of the state's prosecutors' association, said they desperately need the funds.

"It's important for prosecutors to be able to have an autopsy completed in a prompt fashion, and it's important also not just for the prosecution of the case but it's important for a victim's family to be able to receive closure in criminal cases," Smith told the Jackson Free Press.

Three medical examiners currently work in the state crime lab, housed in the Department of Public Safety. Smith said the office is at risk of losing two of the three medical examiners.

"We've reached a crisis level because in a state where the numbers support for us to have five, six, seven medical examiners, right now we have three, and are in danger of losing two of the three at this point, so if that happened, we'd be down to one medical examiner," Smith said.

"So 'crisis' is a word that's often thrown around or sometimes too often thrown around, but it definitely fits as it pertains to the status of the medical examiner's office in Mississippi. They do great work; they just need additional people there to be able to handle cases they see day in and day out."

The National Association of Medical Examiners recommends a maximum of 250 autopsies per year. In 2016, Mississippi's three medical examiners did 1,500, DPS Commissioner Marshall Fisher told the Jackson Free Press in 2017.

Last year, a criminal-justice reform bill died after Bryant vetoed it, saying it allowed habitual offenders, inmates convicted of their third felony, to be eligible for parole after serving 25 percent of the sentence.

The legislation would have prohibited law-enforcement officials and judges to throw Mississippians in jail for their inability to pay fines; it would also clear the way for nonviolent offenders to be released early. On the first day of the new session, Rep. Andy Gipson, R-Braxton, re-committed the bill back to his Judiciary B Committee, signaling its chance at new life in 2018.

#MeToo at the #MSLeg?

In December, House Education Committee Chairman John Moore, R-Brandon, abruptly retired from the Legislature in the midst of an investigation into sexual-harassment claims, leading the House leadership to institute sexual-harassment training in the new year.

When Speaker Gunn's office received word of the allegations against Moore, he alerted the House's outside counsel to follow protocol and begin an investigation. But Meg Annison, the speaker's communication director, told the Jackson Free Press that once Moore resigned, the investigation stopped.

Gunn's management committee adopted and implemented a harassment policy in 2013. The three-page document outlines where House staff and members should report complaints to and the process for investigations.

The Senate has no specific written policy. The Senate rules only state: "Complaints with respect to any misconduct, inefficiency or omission by the Secretary, officials or employees of the Senate shall be heard by the Rules Committee."

Senate President Pro Tempore Terry Burton, R-Newton, said all complaints, not just those for sexual harassment, go through the Senate Rules Committee. Senators have not taken sexual-harassment training courses in recent years. After news of Moore's retirement and investigation broke, Burton said the Senate might consider training in the new year.

"We are talking about it and contemplating, and it is a possibility," he told the Jackson Free Press.

Roads and Bridges, Redux

Funding for the state's infrastructure will come up in 2018 after the late-night fall out between the House and the Senate in 2017, which ended in no extra funding for roads or bridges. Gunn has been outspoken about his support for plans to divert additional state dollars to roads and bridges. The Senate Transportation Committee, chaired by Sen. Willie Simmons, D-Cleveland, held a meeting this summer to look at all the options for possible tax increases and diversions to fun infrastructure. The meeting signaled the Senate's willingness to work on potential solutions in 2018.

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Sen. Willie Simmons, D-Cleveland, called a Senate Transportation Committee meeting in August 2017, signaling the Senate’s willingness to work with the House on options to fund the state’s roads and bridges in the 2018 legislative session.

Gunn formed a study committee this summer to look at the possibility of a state lottery. The results appeared mixed at the group's November meeting. Rep. Richard Bennett, R-Long Beach, said the committee was not recommending for or against the lottery but instead laying out all options to implement the lottery and including research that shows its economic impact on the state's economy and on Mississippians.

State economist Darrin Webb estimates that annual net revenue from the lottery would equal between $82.6 million and $93.8 million in net gain in state revenue. However, a lottery would also disproportionately affect lower-income people in the state.

"Mississippi is already plagued by people making poor choices, including decisions regarding their health, family planning and education (and) training. A Mississippi lottery means the State will be investing in and encouraging individuals who have limited incomes to make poor financial decisions," Webb told the House committee in November.

Gunn also proposed allowing part of the online sales-tax revenue, which Amazon is now diverting to the State, for infrastructure. The Legislature could also increase the gas tax, but Republican appetite to raise taxes ahead of an election year is low. Reeves and Gunn both seem open to working on infrastructure funding the new year, however.

"There are a few major issues out there, like roads and bridges, and I am hopeful we'll be able to come to an agreement on that and other services that are core functions of government," Reeves said in the statement to the Jackson Free Press late in 2017.

Gunn echoed that sentiment.

"Infrastructure is something we believe is a primary function of government," he said in a statement. "The House has shown a commitment to finding solutions to the problem."

The 2018 legislative session begins this week. Follow state reporter Arielle Dreher on Twitter at @arielle_amara for updates from the statehouse. Email her at arielle@jacksonfreepress.com.

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