Will proposed income tax cuts hijack Mississippi’s high-tech future?
Mississippi Gulf Coast Community College’s School of Engineering, Mathematics, Data Science, and IT presents students with opportunities to study practical and theoretical concepts and to apply their knowledge. It offers career and technical paths including computer networking, cybersecurity, c oding, data analytics, IT specialist, computer programming, and simulation and game design. MGCCC
By Jerry Mitchell
Mississippi Center for Investigative Reporting
Gov. Tate Reeves and House Speaker Phillip Gunn have pushed to increase broadband access and add computer science classes in public schools.
“Students need the knowledge, skills and abilities to compete for the best jobs in the new digital economy,” Reeves said.
Gunn said the goal is for “every student to have the same opportunities to pursue computer science regardless of where they live or what school they attend.”
That may prove difficult if these state leaders get their way and eliminate Mississippi’s personal income taxes, which brings in more than a third of the state’s revenue.
“To think we could reduce the general fund by $2 billion and not have a terrible impact is simply refusing to face reality,” said Nancy Loome, executive director of The Parents’ Campaign. “That’s exactly what Kansas did and suffered horrible consequences.”
A decade ago, then-Kansas Gov. Sam Brownback crowed that cutting the state’s income tax by almost 30% and the tax rate on some business profits to zero would be like “a shot of adrenaline into the heart of the Kansas economy.”
The promised boon never happened. Kansas’ economy fell below the trendline, according to a University of Wisconsin-Madison analysis, with only 4.2% growth, compared to 9.4% nationally.
Four years after slicing taxes, Kansas saw nine rounds of budget cuts, Loome said. “School districts had so little funding that many of them had to shut down schools and end the school year in April because they ran out of money.”
That shortfall led Kansas lawmakers to reinstate the state’s income tax several years later.
The problem with Mississippi’s massive cut is there won’t be enough money to cover new teacher pay raises, much less computer science programs, Loome said. “School district budgets would be decimated, which means school boards would be forced to raise local taxes, cut teacher units and eliminate programs just to survive.”
20,000 tech jobs unfilled in Mississippi
For all the talk of high tech, only a fraction of Mississippi students are pursuing computer science.
More than 28,000 high school seniors attended Mississippi public schools last year, but only 358 of them — 81 of them minorities — took the Advanced Placement test in computer science principles, designed to create “leaders in computer science fields” and engage those “traditionally underrepresented in computer science.”
Even fewer took the test for Computer Science A, which teaches computer programming. Of the 26 in the course, four were minorities.
The numbers are no better at the college level. Of the 13,060 degrees that Mississippi’s community colleges awarded, only 314 went for engineering and 92 for computer and information science.
At all of Mississippi’s public colleges and universities combined in 2021, 14,712 students graduated with bachelor degrees, according to the Institutes for Higher Learning. Only 303 of those students graduated with a degree in computer science. Another 62 graduated with a degree in computer engineering.
The Mississippi Department of Education recommends a computer science background to teach Computer Science A, and the only approved educator program is a Master of Arts in Teaching alternate route program at Mississippi State University, said Jean Cook, director of communications for the Department of Education.
Since the state Board of Education approved that program in 2019, no student has been admitted to the program, she said. “All other educator preparation programs lead to a supplemental endorsement, which is an add-on to an existing license.”
According to The Skills Foundation, 20,000 tech jobs remain unfilled in Mississippi.
The Harrison County campus of Mississippi Gulf Coast Community College offers a Data Analytics Technology program — the science of inspecting raw data with the purpose of drawing assumptions about that information. Data analytics is used in many industries to allow organizations to make better business decisions. MGCCC
To help address this continuing shortfall, Reeves signed into a law a measure that requires all middle schools to offer a course in computer science, starting this fall. Half of elementary schools are slated to offer an hour of instruction in computer science.
In fall 2023, half of the state’s high schools are required to offer a course in computer science.
Mississippi’s investment under this law? $1 million matched by another $1 million from C Spire.
That’s far less than Arkansas, which invested $5 million in computer science instruction in 2015 and $2.5 million a year since, forming partnerships with Microsoft and others. As of 2020, Arkansas had the highest share of high schools teaching computer science (89%) in the nation. By next year, every high school will have at least one certified computer science teacher.
According to Mississippi officials, computer and information technology jobs are going to skyrocket in the state between now and 2030, adding more than 667,000 jobs, which deliver a median annual wage of more than $91,000 — more than twice as high as the wage for all occupations in the state.
Linda Moore, president and CEO of TechNet, warned that measures to expand computer science education will take years to impact the numbers in Mississippi’s tech workforce. She said the state must grow such high-tech workers by at least 20% by 2030 if the state is to maintain its current tech employment levels.
The fastest way to increase such workers? Immigrate more tech students and professionals from around the world, she said. “That would give you more high-skilled workers in a matter of months.”
She said Mississippi is already home to 6,000 immigrant entrepreneurs, who generate nearly $190 million in revenue and support thousands of jobs within the state, according to a new report by TechNet.
Reeves is no fan of immigration, repeatedly bashing the current administration’s policies.
“This past year, over 400,000 illegal aliens were able to evade arrest by U.S. Border Patrol and enter the country illegally,” he tweeted. “If President Biden was a cartel member, he’d be employee of the year.”
‘An opportunity we don’t need to squander’
Even if Mississippi manages to raise up enough high-tech workers, the “brain drain” might steal the ones the state trained.
Since 2017, the state has seen a population loss of more than 48,000, according to U.S. Census estimates. That’s larger than the city of Biloxi, Hattiesburg or Tupelo.
That brain drain cost Mississippi $1.5 billion in income in just a four-year span, according to an analysis by Rethink Mississippi’s Jake McGraw.
A 2017 American Community Survey found that Mississippi had lost 10% of its college-educated millennials — the largest loss in the nation — at the same time the South saw faster growth than the rest of the nation.
According to Mississippi Lifetracks, nearly half of all college graduates leave the state within five years of graduation.
For his honors thesis at the University of Mississippi, student Clifford Adam Conner surveyed more than 1,000 Mississippians and found that economics was the main reason people left with some citing societal concerns, politics, religion and discrimination. Of those leaving, 94% were college graduates. Nearly four-fifths of those who stayed seriously considered moving away.
For a survey for his master’s thesis, University of Mississippi student Clifford Adam Conner, seen here speaking at the state Capitol in 2019, found economics was the main reason people left the state and, of those leaving, 94% were college graduates. Nearly four-fifths of those who stayed seriously considered moving away. Courtesy of Clifford Adam Connor
“I read a thousand different reasons. A lot of them were heartbreaking. Many had experienced racism, discrimination, homophobia and transphobia,” he said. “We haven’t come as far as a society, and that is definitely driving people away.”
Failure to cooperate has helped fuel the brain drain, he said. “The disconnect between Jackson and the suburbs is destructive. I mean, the state capital spent a month without drinking water. If they don’t find a common interest to work toward, they’re not going to overcome those differences.”
They fail to see that their futures are tied together, he said. “If the city of Jackson continues to shrink, Madison and Rankin counties will one day see falling populations as well.”
Mississippi suffers from “a good ol’ boy kind of culture,” he said. “We have one of the poorest states in the nation. We’re the most uneducated and unhealthiest, but we don’t prioritize our social safety. If every child in the state got access to a quality education, we could make a huge difference, but our spending priorities don’t always line up with that.”
Such failures drive young people away, he said. “As long as we ignore the fact that we’re in last place in so many things, we’ll never make progress.”
Conner, who graduated magna cum laude in 2021 with a degree in public policy and political science, plans to join that exodus. “I love Mississippi from the bottom of my heart, but I’d rather live somewhere without judgment or fear or definitely live in a place where I can play a role in bringing positive change,” he said. “I don’t want to be pushed aside, because I’m too young or too liberal or too gay.”
To help stem this brain drain, Reeves signed into law last year a measure that provides a tax refund to recent college graduates who purchased real estate or started a business.
“We’re hoping this will entice some of our best and brightest to stay here,” said state Rep. Trey Lamar, R-Senatobia, who sponsored the bill.
Lamar, chairman of the House Ways and Means Committee, also sponsored the House bill to eliminate the state income tax, which he sees as another way to fight such flight, setting up Mississippi as “the most competitive state in the region from a tax standpoint.”
Economic triggers would prevent this tax cut from leading to a budgetary nightmare, he said. “I don’t want my name attached to something that’s not fiscally sound. We can do this and grow government by several hundred million dollars, which we’ll use to increase our teacher pay and pay of other state employees and some other needs that we have.”
Bill Bynum, chief executive officer and founder of the Hope Policy Institute, said eliminating the income tax “may make for good sound bites, but it is irresponsible fiscal policy. It adds insult to injury because most schools in Mississippi, particularly those outside wealthy districts, are already under-resourced.”
‘I don’t want to be Kansas’
The Kansas governor got the idea for the tax cuts from the supply-side economist he hired, Arthur Laffer, who was behind then-President Reagan’s tax cuts, which opponent George H.W. Bush derided as “voodoo economics.” Decades later, he did a report for the American Legislative Exchange Council (which honored him with a prize bearing his name) that pointed to the nine states without personal income taxes as proof that the lack of taxes meant better economies.
Reeves seems to have read the report, repeatedly telling Mississippians that eliminating the income tax would enable the state to compete with Florida, Texas and Tennessee. “In every instance, we are at a disadvantage,” he said, “because they don’t have an income tax and we do.”
Actually, Mississippi’s personal income grew faster percentage-wise than those three states and the nation in 2020, legislative reporter Bobby Harrison noted in a column for Mississippi Today.
On March 16, Reeves bragged that the Legislature now had a bill that “eliminates the income tax without raising any other taxes. This would be a huge boon to our economy.”
The economic theory behind the Mississippi’s tax cut, like that of Kansas, belongs to Laffer. He developed the Laffer curve, which presumes that if taxes are too high, cutting taxes would grow the economy and tax revenue.
But Kansas saw the opposite — plummeting tax revenue, a middling economy and falling bond ratings.
The Center on Budget and Policy Priorities concluded, “State policymakers seeking to boost their state’s economies and improve the well-being of their constituents should reject reckless tax cutting and instead focus on improving the quality of their education systems and infrastructure and developing targeted policies to encourage entrepreneurship, rural development, and a more diversified economic base.”
Only one of Mississippi’s top leaders has mentioned Brownback’s experiment, and that is Lt. Gov. Delbert Hosemann, who worried whether there would be enough state revenue to cover the bills. “I don’t want to be Kansas,” he said.
Reeves is now vowing to “do whatever it takes” to eliminate the state income tax in Mississippi.”
That may mean a special session — something that Gunn supports.
Scott Waller, president of the state’s chamber of commerce, told Gunn during the fall tax study meetings that the push to eliminate the state income tax has not come up a single time in conversations with business leaders across Mississippi.
“We want to have a competitive and consistent tax policy that also takes care of core government services,” Waller told MCIR. “That’s how we see it.”
The number one issue for those business leaders is that there aren’t enough qualified workers for the current jobs, he said. “We’ve got to make sure we capitalize on technology.”
That means not just preparing students for college degrees in computer science, but also training students for careers that don’t involve college by utilizing coding academies as well as other career paths, he said.
Mississippi has made some great progress through expanded early childhood education, teacher pay raises and workforce development, and that needs to continue, he said. “This is an opportunity we don’t need to squander.”
Email Jerry.Mitchell@MississippiCIR.org. You can follow him on Facebook, Twitter or Instagram.
This story was produced by the Mississippi Center for Investigative Reporting and produced in partnership with the Community Foundation for Mississippi’s local news collaborative, which is independently funded in part by Microsoft Corp. The collaborative includes MCIR, the Clarion Ledger, the Jackson Advocate, Jackson State University, Mississippi Public Broadcasting and Mississippi Today.