Pepper: State struggles even in good times

JACKSON – Mississippi, like most other states, is facing major budget struggles, but even in the best economic times Mississippi struggles to fund all of its needs, state Economist Phil Pepper said Friday.
Pepper, speaking at a meeting of the nonprofit Mississippi Economic Policy Center, said that if state taxes were equal throughout the nation, Mississippi would generate 75 percent of the average of other states because of the low per-capita income here.
Yet, because of the high percentage of poor residents, Mississippi needs 110 percent of the average of other states to meet its various obligations, such as health care, prison incarceration and education.
“We will always be short of money in this state,” Pepper told the conference.
The Mississippi Economic Policy Center works on issues affecting working families and the poor in the state.
Pepper and Elizabeth McNichol, a senior fellow with the Center on Budget and Policy Priorities, said current budget troubles facing Mississippi and the rest of the nation are historic.
“The downturn is bad and it will continue for a few years,” McNichol said. “States must figure out how to get by for the next few years.”
More than half the states, including Mississippi, already have made cuts to vital services, such as education and health care. Some states have raised taxes. Among them is Mississippi, which increased the taxes on cigarettes.
While politicians are reluctant to raise taxes, especially in hard times, McNichol said research indicates that it does more harm to the economy for states to make cuts in services than it does to raises taxes.
“It is important to take a balanced approach,” she said.
Pepper predicted economic recovery would be slow and modest. He cited statistics showing that since the early 1960s, the rate of economic growth after recessions has been decreasing.
“That reflects world competition,” Pepper said. “I think you will continue to see that kind of trend.”
The rate of growth, Pepper said, is even slower in Mississippi as the manufacturing jobs leave the state.
“We will see little increase in employment for several years. The world is changing,” he said.
Pepper said the long-term solution to the state’s problems is education. But he said that means more than simply spending more money. He said innovative approaches must replace what has not worked.
“The biggest problem is a lack of appreciation. Parents don’t appreciate education the way they should,” Pepper said. “That is especially hard to attack.”

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Bobby Harrison/NEMS Daily Journal

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