Writing in this space recently Peter Gilderson, mentioned conditions detrimental to development of nations, states and cities: high taxes; policies that reduce incentives to work; political arrangements that work to benefit politicians; high crime rates; and policies unfavorable to businesses. Most urban development experts would agree with his list. However, the word “high” here is ambiguous.
If memory serves, not a sure thing in my superannuated condition, his comments were mostly aimed at the Jackson metro area and perhaps the state. After a short discussion of federal taxes, that will be my focus too.
Determining whether taxes are high requires a comparison to the overall tax bite in other states or nations. The same idea applies to determining whether crime rates are high. The Organization for Economic Cooperation and Development keeps track of tax-GDP ratios (the usual measure of tax effort) and other data for developed countries. In 2020 the OECD average was 33.5%. Of the 37 countries rated the U.S. was 31st lowest at 25.5%. So federal taxes are comparatively low.
We ask governments to provide services; education, public safety, national defense, etc. To do so they have to tax. Zero taxes can’t be the standard. Now back to Mississippi.
The state’s current tax-GDP ratio is 11.73%, 11th highest. The national average is 9.62%. So, Mississippi is a bit high but our public services are not commensurate with that. Apparently, our income tax is about to get a bit lower if not all the way to zero. That’s not likely to make Mississippi better.
Crime rates, fuhgeddaboudit! Jackson’s 2021 murder rate was 99.5 per 100,000 people. Highest in the nation! The state as a whole is in better shape. U.S.A. Today finds Mississippi’s crime rate 23rd lowest in the nation.
Mississippi political arrangements work well for legislators but less well for citizens. Exhibit A is the legislature’s dallying over the legal marijuana matter, Initiative 65 on the Nov. 3, 2020 ballot. Despite strong headwinds from various governmental entities the measure passed with about 70 percent of the vote. I voted for 65 but didn’t inhale.
Initiative 65 was designed by citizens. The legislature added 65A seemingly to confuse voters. Even before the election another politician sued the state to throw out all votes 65 might get. Furthermore, to date the legislature has not corrected the flaw in the initiative process created when Mississippi lost one Congressional district after the 2000 census. I see no way to read this other than government’s effort to avoid ceding power to citizens.
If other states are like Mississippi in that regard, perhaps that’s why the Economist (magazine) Intelligence Unit rates U.S. democracy as flawed. Given the vote limiting measures several states including Mississippi have already implemented or are planning and the entrenched power of the two political parties that sounds about right. There’s more to be said about that but I’ll apply the Scarlet O’Hara theory and think about that tomorrow.
Gov. Reeves likes to say, “Mississippi is open for business.” He’s right, for large businesses perhaps. Nissan recently announced a multimillion-dollar expansion of its Canton facility and the Continental Tire plant is about to come on line. The story is quite different for other businesses in the state. The U.S. News and World Report ranks Mississippi’s business environment 49th among the states. Sadly, near the bottom is where we find ourselves on lots of lists of good things states do.
Turning to the Jackson area. A recent Freakonomics podcast discussed rapid growth in Dallas and surrounding suburbs. One of the interviewees was Cullum Clark, an urban economist at SMU. Dallas is about to knock Chicago off the podium for the bronze medal in the city population size free skate. Clark attributed that to three factors; great schools especially in Dallas’ suburbs, public safety, and affordable housing.
How does Jackson measure up? Jackson’s school are third rate at best. As already mentioned, crime is out of hand. However, real estate prices are relatively reasonable. That’s one out of three. Jackson doesn’t even meet the late Meatloaf’s “Two out of three ain’t bad” standard. One out of three gets a baseball player to the Hall of Fame but it’s a loser in urban development.
Neither Gilderson nor Clark mention infrastructure but it is a critical factor in businesses’ decisions to locate in an area. Jackson’s infrastructure is a mess especially its water system. To be fair, Jackson has been working on street upgrades, particular North State Street.
As a Mississippian and resident of the Jackson area I fervently hope one day soon our leaders will figure out the way we’ve always done things hasn’t worked for a very long time. Paying attention to Gilderson and Clark would be a good place to start.
Pat Taylor, Ridgeland
