Jackson Free Press

With coastal construction driving healthy tax revenues, you might expect smooth sailing for this year's legislative session. After all, tight budgets mean tough choices, and tough choices mean bare-knuckle fights among legislators. However, the House remains at odds with Gov. Haley Barbour and the Senate, and 2007 is a statewide election year. In other words, even though they have more money to distribute than in years past, we can expect some scrapping among legislators as they position themselves for the elections.

Though no one can predict what issues will truly cause a fire—no one predicted last year that a vote on baiting deer could be stymied for hours—some representatives and senators already have their educated guesses on what issues will become contentious.

Mississippi Adequate Education Program funding was a nasty fight last year, with the largely Democratic House squaring off against Republican Gov. Haley Barbour and the Republican Senate on whether or not to fully fund it. The Legislature has not fully funded the formula, which channels state money to largely rural school districts with limited tax bases, since 2003, which was also an election year.

Rep. Cecil Brown, D-Jackson, who is chairman of the House Education Committee, said MAEP funding may not be the issue it was last year, now that the governor is saying the formula will "likely be funded" after the State Department of Education released a new estimate that lowered the cost by $34 million last month.

Rep. Erik Fleming, D-Clinton, said he remains suspicious of the governor's announcement. "We hear what the governor's saying, but we've been hearing that for the past three months. His definition of fully funding is often not the same as the rest of the Legislature. When we say 'fully fund,' that means every dime called for by the formula goes to the formula. He could just be playing with words," Fleming said.

Brown pointed out that the proposed tobacco tax—which was, perhaps, the nastiest, most protracted fight last year, with former tobacco lobbyist Barbour vetoing new taxes on cigarettes—will come up again this year.

Last year, the Senate failed to override the governor's veto of the tobacco tax, which also would have decreased the state's regressive tax on groceries, but Brown says things will be different considering the approaching elections.

"The upcoming election year could affect the Senate's view this time, but I don't know how strongly held the Senate positions are," Brown said. "The polls support us, but they always have from the beginning. I don't know whether the Senate listens to polls. It depends on how hard the governor pushes back. He'll get involved at some point, but we don't know if he'll get involved in the legislation or when it hits his desk."

Legislature spectators can also expect the Department of Health to be a big issue. The State Board of Health was ready to vote State Health Officer Dr. Brian Amy out of his position, but ultimately the board flinched over concerns raised by the attorney general's office that such a move might be illegal because Amy's term is not yet finished. Last month, the board reluctantly voted 7-5 to keep Amy.

The law establishing the board sunsets July 1 of this year, however, and it is up to the Mississippi Legislature to either let the board fizzle out of existence or reinstate it for another term. Re-forming the board can also mean re-creating it, since the Legislature now gets to tinker with its mechanics before approving it. And, while some House members, like Public Health Committee Chairman Steve Holland, D-Plantersville, have voiced no outward opinion of the performance of the board during the Amy affair, Senate Public Health and Welfare Committee Chairman Sen. Alan Nunnelee, R-Tupelo, says he plans to make significant changes in the Department of Health. He admits that it will be a big job.

"I don't predict what the Legislature might or might not do," Nunnelee said. "The out-of-bounds markers that define the field of play here are: 1) We completely rubberstamp the status quo and keep it just like it is, and; 2) We let it sunset and go away. There is a very big field of play in between those two out-of-bounds markers. What we'll resolve I really don't know."

The House's support of the Partnership for a Healthy Mississippi will also likely come up again. This year, Barbour succeeded in strangling the program of its $20 million in annual funding, but legislators would like to keep the program alive. Barbour sued to stop the automatic payment of $20 million to the program last year, saying the Partnership needed to be funded though the traditional legislative process, and needed more oversight. (He later fought the Legislature's attempt to impose oversight on federal hurricane recovery funds handed down to the state through the governor's office.)

Last year, the Legislature tried to give Barbour what he wanted by creating a bill that would finance the Partnership through the regular legislative process, but Barbour vetoed it.

Barbour took the war on the Partnership a step further by requesting that the Supreme Court grant a stay of expenditure of all funds held by the Partnership while the case continues in court. Supreme Court Justice Michael Randolph gave Barbour what he wanted, ruling that the Partnership "shall not expend any funds that it currently holds," until the courts decide the case.

This year, the House is already looking for ways to re-create the program.

"The partnership may be dead, but that doesn't mean the program is dead," Brown said. "It might be reconfigured in another way, and that's what we'll look at. Barbour had offered some proposals, but they're not as good. They don't replace the Partnership. You can't take $20 million out of the tobacco-cessation program and replace it with $5 million. You can't do that. That's not enough to do what needs to be done."

Decisions regarding the state's wind-pool fund will doubtless be another issue. The wind pool—officially known as the Mississippi Windstorm Underwriting Association—is a last resort insurer for coastal homes and businesses. Barbour announced a $50 million set-aside of state-administered federal grants to mitigate an anticipated increase in the cost of insurance to consumers under wind pool policies, but legislators may wind up haggling over how big that set-aside should be.

Rep. Bobby Moak, D-Bogue Chitto, said the House could choose to put more state funding into the wind pool in order to cover anticipated insurance cost increases after Hurricane Katrina, but Moak said he also wanted to see more tax deductions for business and homeowners to help counter the insurance-premium cost explosion.

"The coastal recovery just won't occur if nobody can afford to build because of insurance costs," Moak said, adding that the state should be looking into taking a more regulatory role in scouting out bad insurance policies.

Misleading policies are the basis for Mississippi Attorney General Jim Hood's multi-million dollar suit against insurance companies. Policy-holders claim the insurance industry misled them on hurricane coverage by claiming policies covered hurricanes, but included no specific coverage for storm-surge damage. Coastal residents discovered that storm surge proved to be the chief destructive force in Hurricane Katrina.

Hood argues that the insurance companies must cover storm-surge, which insurers claim is "flood damage."

"We need to make sure that policy-holders buy a working product," Moak said. "We don't need to prop up a system that will allow them to buy a product that doesn't pay off in a catastrophe. We've let that rest with the executive branch of government for many years, and it has not worked. The Legislature needs to step in and say we need to have a good product."

Other bills queuing up for deliberation include mandatory physical education bills for state public schools—something on which both Barbour and the House seem to be in accord. Rep. John Reeves, R-Jackson, is leading the fight for that bill. He is also pushing for a payment in lieu of taxes bill, whereby the state would compensate Jackson for tax revenue lost to the many properties the state owns here. Those properties would generate significant revenue if they were privately owned and taxed, but Jackson cannot tax government property.

The Coalition for People with Disabilities is pushing another "money follows the person" bill this session. The bill would end Medicaid money restrictions limiting nursing care money to institutional care, such as nursing homes, and allows Medicaid financing of home-care nursing. Home-care nursing is cheaper than institutionalized health care, but the Mississippi Health Care Association opposed the bill during the last session. Sen. Jack Gordon, D-Okolona, let the bill die in his committee hours after the bill deadline had passed saying it didn't belong there.

Supporters of the bill objected that Gordon had close friends in the nursing home industry.

Gordon did not return calls.

Legislators are also likely to consider an effort to extend tax cuts on modular-housing construction. The Legislature recently cut that tax from 7 percent to 4 percent, but may now consider extending it to all forms of modular construction, including modular construction for office and retail space, instead of limiting it to home construction. Such measures could have an impact on coastal construction.

Legislators may also face a push by Jackson County residents and casino advocates to prevent the expansion of off-reservation Indian gaming anywhere outside the Choctaw reservation, near Philadelphia, Miss. The Mississippi Band of Choctaws, which has changed the face of Philadelphia with lightly taxed casino growth, is looking to buy land and build casinos in Jackson County, giving non-Indian casinos in the area some stiff competition. The tribe lobbied to amend the Indian Gaming Regulatory Act, allowing the purchase of new land outside the reservation for casino construction.

Opponents of the expansion want the new casino land to face the taxation and regulation of other non-reservation casinos.