THE MISSISSIPPI LEGISLATURE

In response to a legislative request, the PEER Committee studied the fee structures of state agencies in Mississippi. The purpose was to determine the potential for additional fees for state services as a revenue source. The objectives for the review were to:

• develop a theory of fee setting to govern the conditions under which fees are appropriate;


• determine the amounts and types of fees collected by state agencies in FY 2001;


• determine potential agency services where costs could be recouped through collection of fees; and,


• develop estimates of potential new fee revenue for each of the agencies surveyed.

The PEER Committee produced this report as a tool for decisionmaking. Specific decisions on whether to impose a fee as a revenue source are policy decisions for the agency and the Legislature. Future decisions regarding establishing new fees should be based on thorough and up-to-date information on costs and benefits of program services. The PEER Committee takes no position on the creation, raising, or reducing of the fees presented in this report.

PEER focused its review on forty-one executive agencies, judicial agencies, and agencies with boards that receive appropriations of state general funds. However, PEER did not review state entities under the oversight of the Board of Trustees of Institutions of Higher Learning (IHL), as Section 213-A of the MISSISSIPPI CONSTITUTION OF 1890 grants exclusive authority to IHL over its self-generated funds. PEER did not include agencies that do not receive state general funds.

In order to determine the most efficient and equitable way to recommend establishment of fees for state services, the PEER Committee developed a Theory of Fee Setting in Government to form the criteria or basis for decisions on the potential for establishing or increasing fees. PEER reviewed academic literature, economics theory, and policies and procedures from other states and the U.S. and Canadian governments in order to develop the theory and a decision model for implementing the theory. Exhibit A summarizes the Theory of Fee Setting compiled by PEER from the literature.

Exhibit B includes a summary of the potential new fees determined from the review of the forty-one agencies surveyed. The Appendix, beginning on page 23 of the report, includes a detailed analysis of the agency services or programs; expenditures by service or program; sources of funding; determination of private, public or mixed benefit; and the method of calculation used to estimate potential new fee revenue.