Tourism as an economic driver

*Appeared in the Laurel Leader Call newspaper 

Let’s talk about tourism as an economic driver.  The Mississippi Development Authority, the state agency tasked with promoting Mississippi, recently released a set of data points related to the impact tourism has on the state’s economy – from tax revenues to private sector job creation.  It’s a fascinating picture of just how important this oft-underrated industry is to the Hospitality State.

Before I get into the details of the report, I want to come clean.  I used to roll my eyes at the thought of tourism being an economic boost for the state.  Sure, visitors are important, and maybe they have more discretionary income to spend than Mississippians, but just how many people visit our state?  

 

Turns out, it’s a lot.  These days, my eyes no longer roll; instead, they’re open wide at the numbers of visitors Mississippi receives from all around the country and even the world. 

 

According to the comprehensive MDA report, in Fiscal Year 2020 the state had an estimated 21 million total visitors (including overnight, day leisure, business, domestic, and international).  To be clear, that means that we had 21 million visitors – even during part of the pandemic!  Forty-four percent of visitors are out-of-state, coming from places like Louisiana, Alabama, Texas, Florida, Tennessee, Georgia, and Arkansas.  The top international countries of origin were Canada, the United Kingdom, Japan, China, and Germany.   

 

Tourism and travel accounted for 80,740 direct jobs in Mississippi, with 98 percent of these jobs in the private sector.  The industry also comprised 7.1 percent of total establishment-based nonfarm employment – or one of every 14 jobs.  This puts travel and tourism as fourth in the state in terms of employment, behind private manufacturing, educational and health services, and retail trade.

 

Fourth in job creation!  That’s significant, y’all. Total jobs in this industry are 106,740, once you include the additional 26,000 indirect and/or induced jobs.

 

In terms of revenue, travel and tourism provided 6.5 percent of the state’s $5.6 billion general fund, or roughly $362 million in money spent via visitor expenditures, tourism capital investment, and travel and tourism personal income, sales taxes, and other taxes.  

 

What does this mean?  Think about it this way.  If travel and tourism were taken away yet all other sectors of Mississippi’s economy stayed constant, the state would see its unemployment rate skyrocket from an annual rate of 7.9 percent to 14.3 percent, and individuals would see their annual taxes increase by $525 to make up for the lost revenue.  

 

Not too shabby. 

 

For its part, Laurel was listed in the report as being a tourism place of interest.  That’s no surprise, given the huge success of the HGTV show, “Hometown,” which has attracted visitors from across the globe.  I would be remiss not to mention other factors contributing to Laurel’s tourism success, such as the presence of a regional airport (Hattiesburg-Laurel had 7,933 passenger boardings scheduled for Calendar Year 2020) and the Amtrak station, which is one of 11 stations across the state.  Total ridership in Mississippi was 56,586 in FY 2020, with revenues reaching about $4.55 million. (Side note: I’ve always thought it would be fun to take the train from Laurel to New Orleans.) 

 

Tourism is a critical part of the state’s economy, but we’ve also seen just how dramatically it can change the face of a small town like Laurel.  Anecdotally, I’ve experienced the growing pains associated with tourism boosts – such as being unable to find parking in downtown or having to wait in line for a table at a local restaurant.  But these are growing pains I heartily welcome, because the more people who visit our state and city, the more likely we are to continue seeing economic growth and prosperity.

 

And what’s that they say about a rising tide lifts all boats?  I certainly believe that.  So, tourists, welcome to the Hospitality State.  Come visit us, spend some money, and – most importantly – tell your friends about your wonderful experience in Mississippi! 

 

Changing demographics, changing politics

*Appeared in the Laurel Leader Call newspaper in Jones County 

About a year and a half ago, I went with my family to eat at The Loft in the downtown district. I couldn’t believe my eyes when I saw a line out the door and down the street.  

 

“But this is Laurel – sweet, sleepy, Laurel,” I thought.  As it turns out, my hometown isn’t quite so sleepy anymore. 

 

I was naïve not to understand the changing demographics of the area or just how much the City Beautiful had grown in terms of tourism and economic development.  It was a naivety I could afford, since my name isn’t on a ballot.  But politicians, take note. The changing demographics of the city, if continued, can have lasting repercussions for elected leaders in this area.  

 

Consider the following anecdotal comments from a local architect, who has seen an influx in retirees in his work.  He says the cost of living here compared to where the retirees come from makes a comfortable retirement possible for a lot of new Laurel residents.  In addition to retirees, another influence are the people growing a family. 

 

According to U.S. Census “QuickFacts,” Jones County’s population is comprised of 17.4 percent of people over 65 (as of 2019 estimates).  About five percent of the population are veterans, at roughly 3,500 citizens.  Residents drive an average of 21.7 minutes to work, and the average household size is 2.68. 

 

These are simply estimates from the Census Bureau, but it gives us a good snapshot into demographics of the Free State area.

 

Nearly one in five Jones Countians are over 65, which means retirees are – or should be – a strong voting bloc in this area.  Topics such as healthcare and pensions often take the forefront of this population’s mind, and, correspondingly, often become a platform for local leaders. 

 

Many of these particular topics resonate strongest at the federal level. The Affordable Care Act is federal, as is social security and Medicare. Seniors living in the Free State may have a renewed interest in our federal congressional elections, which happen next year. 

 

The state plays a role, albeit a smaller one, in regulating healthcare and pension plans. Mississippi is a tax-free state for retirement income, so seniors might pay increased attention to tax proposals being pushed at both the state and federal levels.

 

Young and growing families can also impact the politics of an area, with their focus on affordable housing prices, quality schools, and jobs availability.  This group is likely to be more concerned about the school rating of the Laurel or Jones County school districts than they are whether lawmakers in Jackson tax pension funding.

 

Locating in the city versus the county is a big decision for these families, and speaks to the nearly 22-minute average drive-to-work time captured by the U.S. Census data. Another bright spot on the horizon for Jones County is the impact these young families have on the local music scene. (320 Fifth Street, anyone?!) I’m pleased to say one can find live music again in Laurel, Miss.

 

One last point about Laurel’s ever-changing demographics.  “Geographic mobility” as measured by the U.S. Census tracks whether individuals live in a different house than one year ago; live in a different county than a year ago; live in a different state; and/or live in a different country. The rate for Jones County is 6.5 percent, or about half of the statewide rate.  With an influx of new residents, expect this figure to change significantly if population growth continues. 

 

On a more personal note, these days I am proud to split time between Jackson and Jones County (I bought a house in the Free State about 1.5 years ago). It’s exciting to witness the renaissance of the downtown area, as well as the economic growth outside the city limits. From newly paved streets to road construction, from live music to BBQ nachos, I welcome this Laurel transformation. 

 

What’s that sign say that welcomes you into the county on Highway 84? Laurel, Mississippi… “now this is livin’.” 

Tort reform not just about lawyers

*First appeared in the May 7 edition of the Laurel Chronicle

“Every small business is one lawsuit away from bankruptcy,” proclaimed then-gubernatorial candidate Haley Barbour on the 2003 campaign trail. Promising “more and better jobs” by eliminating Mississippi’s position as a judicial hellhole, Barbour’s message of tort reform resonated with voters.

In 2003, I of course had no idea what a tort was. A dessert, maybe? It sounded delicious. Desserts weren’t often in need of “reform,” so I did some digging. Here’s what I found.

Jackpot justice had developed a niche in Mississippi. Our legal climate was scaring off potential employers and threatening the livelihood of existing businesses. As more lawsuits were filed, fewer doctors stayed in the state. Medical facilities were shuttering their doors due to rising insurance costs. In the Delta, one hospital even closed its emergency room because the county government couldn’t pay its medical liability bills.

Frivolous lawsuits had given Mississippi’s economic and healthcare climate a black-eye at a time when the state could least afford it. In 2003, the state was in debt, and jobs were being lost at an alarming pace. Without aggressive action to reform the state’s civil justice laws, Mississippi’s future hung in the balance.

These were the high stakes of the governor’s race in 2003, so in looking back it’s easy to understand why voters were passionate about the issue. Gov. Barbour kept his promise and successfully convinced the Legislature to pass what the Wall Street Journal called “the most comprehensive tort reform law in the nation.”

This year marks the ten-year anniversary of the Tort Reform Law of 2004, which is probably a good time for all you non-attorneys to ask: What does tort reform really have to do with me?

I’ve hinted at the broader implications of lawsuit abuse. Of particular interest to Mississippians, especially in the days of Obamacare, is the impact of lawsuit abuse on our healthcare system. Without appropriate laws in place, doctors and hospitals couldn’t afford to stay in Mississippi. Former state senator Neely Carlton told a group Monday that, prior to tort reform’s passage, more than 500 Mississippi doctors had let their licenses expire in one year and that at least seven Mississippi counties didn’t have a single OB/GYN.

After the new laws were passed, however, insurance rates dropped, new insurance companies entered the market, and the largest health insurance writer in the state began writing new policies. The comprehensive tort reform law ended the healthcare crisis caused by lawsuit abuse.

In a post-recession environment where job growth still lags, the economic impact of civil justice reform can’t be overlooked. Prior to tort reform, the U.S. Chamber of Commerce ranked Mississippi 50th for its unfair legal climate several years in a row. Businesses not only had to weigh the impact of the “lawsuit abuse tax” (costs of hiring lawyers to defend against frivolous lawsuits), they also had to factor in the nuisance value of settling out of court with people filing these lawsuits.

Mississippians for Economic Progress previously estimated that lawsuit abuse had cost Mississippi about 10,000 jobs and another $1,000 per household in economic impact.

Tort reform stopped the hemorrhaging. Businesses begin to view Mississippi as a viable place to do business. Toyota, which has created thousands of jobs in northeast Mississippi, said it would not have considered locating in Mississippi without tort reform. Other major companies have located or expanded operations here in Mississippi. (GE Aviation expanded operations to include a plant in Ellisville. I’m not saying tort reform was the primary cause, but it certainly didn’t hurt.)

Legal issues remain hugely important to job creation. The 2013 Global Manufacturing Competitiveness Index, a collaboration between Deloitte and the U.S. Council on Competitiveness, studied more than 550 CEOs and senior manufacturing leaders. They found that legal and regulatory concerns were the fifth highest drivers of competitiveness, outranking other factors such as physical infrastructure, energy costs, or even government investment.

Mississippi has enjoyed a pro-growth, business friendly legal environment since the passage of tort reform. Leaders would be unwise to deviate from the proven results of these laws.

But don’t take my word for it. Actual experts on the issue will gather in Jackson to commemorate the ten-year anniversary of the law during the “Mississippi Tort Reform: Ten Years After” conference on May 14. The conference will highlight successes of the law, as well as future risks. Anyone interested in attending the event can register online – simply google the name of the event or visit the Mississippi Economic Council’s website and look under “What’s Happening” (www.msmec.com).

"MISSISSIPPI TORT REFORM: TEN YEARS AFTER" - FREE TO ATTEND. REGISTER HERE.

Workforce development key component of economic development

*First appeared in the October 31 edition of the Laurel Chronicle.

This week I attended a workforce development conference hosted by the Federal Reserve Banks of Atlanta and St. Louis, the Mississippi Manufacturers Association, and other statewide partners. The event reminded us that, as MMA president and CEO Jay Moon said, workforce development remains a critical element of successful economic development.

Here are a few more observations from the event.

Panelists at the conference included representation from multiple states and a mix of the public and private sector, and conference attendees represented business and industry; education; and workforce agency stakeholders.

Throughout the day, much discussion centered around “soft” skills. That’s industry speak for things parents used to teach their kids – how to dress for work, how to have a good attitude, punctuality, and motivation to do a good job. Believe it or not, states are spending millions of dollars each year to teach workers these types of skills. Employers are clamoring to find workers who exhibit “conscientiousness” (as one panelist put it). To paraphrase another speaker, employers want a motivated workforce even more than a trained workforce.

As I’ve said before, when the family unit fails our kids, the government tends to step in. Ideally, parents – not training providers – would teach their children these very basic life skills.

Nicole Smith, senior economist at Georgetown University, raised the issue about Mississippi’s “brain drain,” noting our state is a net exporter of college graduates. In essence, we are training young workers to go somewhere else. This is particularly troubling in a state that already suffers from a historically low labor force participation rate (the number of people who are either working or looking for a job). This measure certainly won’t improve if our future workers catch the next train out of town.

Representatives from the construction and defense industries stressed that workforce policy should embrace all career and education pathways – both those which require a four-year degree and those that require a technical degree or certification. The earning potential of non-university careers was explored, with economist Smith noting that a bachelor’s degree in education typically pays much less than a two-year certification in an engineering-related field. (Students: Y’all take that to heart.)

Mike Beatty, president and CEO of the Great Promise Partnership, discussed a Georgia dual enrollment program targeting at-risk youth. The public-private partnership combines traditional classroom education with a job working about 20 hours a week as long the student maintains certain grades and behavior requirements. This program provides real-life work experience – such as those soft skills I mentioned earlier – and demonstrates the value and reward of hard work. It has helped turn the tides for at least 600 Georgia teens since the program’s inception and could be a model for similar Mississippi efforts.

Mark Henry, head of Mississippi’s workforce agency (the Department of Employment Security), is currently serving as president of the National Association of State Workforce Agencies. In this role, he is advocating Congress give states maximum flexibility on federal workforce dollars. Amen to that, brother.

Conference attendees broke into small groups, with each group producing a single idea for further study by Mississippi workforce officials. These ideas ran the gamut: Emphasizing the value of work to youth; developing a single workforce development brand for the state; renewing our focus on entrepreneurship; understanding and overcoming the barriers faced by felons re-entering the workforce; unifying the education system; and developing workforce academies and ensuring courses taught by community and junior colleges meet employer needs.

These topics aren’t new, but they continue to be challenges faced by Mississippi as we look to improve our workforce delivery system. I suspect these issues will continue, at least in the foreseeable future, to dominate discussions on how to move Mississippi forward, since successful workforce development breeds successful economic development.

Economic development is, after all, the art of attracting new business and industry to a city, county, state, or region. While competitive tax structures, financial incentives, and other bells and whistles are important, a company won’t locate its next facility in an area without qualified workers.