MS Senate tax cut plan unveiled. See how much it cuts

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12-02-2025

There will be a tax cut debate between the House and Senate this year after all.
After several days of proverbial hammering from House members, Lt. Gov. Delbert Hosemann unveiled specifics on the Senate's tax cut plan to match what the House passed early in the session.
The plan would seek to cut $538 million in tax revenues over a four-year period in both cuts to the personal income tax and the grocery tax, while leaving local funding levels from sales tax diversions in place for municipalities.
The plan would also raise the gas tax by 3 cents over three years and would raise it to a total of 9 cents on every gallon. Hosemann said during a press conference at the Mississippi State Capitol Building on Wednesday he expects $212 million to be added from that tax to go toward road and bridge infrastructure.
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Hosemann said the tax cut proposal would take four years to fully implement, and it would leave the state's income tax at 2.99% and the grocery sales tax at 5%.
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"One thing that's really important to all of us in the Senate was the fact that we cut taxes immediately and consistently, that there's no bump here for a while and a decrease later on," Hoseman said. "This needs to be a sustainable, conservative approach to taxes."
In the end, it would be a $326 million cut to state funding.
The plan starkly contrasts key provisions of the House plan, dubbed the Build Up Mississippi Act. Which would:
Feature a net $1.1 billion cut to state revenues.
Totally eliminate the state personal income tax over 10 years
Cut the grocery tax on groceries in half but allow cities to levy a 1.5% local sales tax.
Remove sales tax diversions from the state to municipalities.
Implement a 5% fuel tax to then fund infrastructure projects.
The $80 million that was going to MDOT per year from gambling revenue will now be headed toward the Public Employee Retirement Systems of Mississippi to address a $25 billion deficit in future retirement benefits.
Establishes a "budget stabilization fund" that will act as a secondary rainy-day fund.
In contrast, Hosemann said the Senate tax plan does not contain provisions to address the state's public retirement system, but it would be a sticking point in another piece of Senate legislation.
Hosemann also said he thought the House proposal was too ambitious of a plan and that any plan to cut taxes beyond a four-year window is unwise.
"When you get beyond four years, you really get into Neverland about what's going to happen," Hosemann said. "Nobody really knows what's going to happen. You'll see we are very reluctant to get into something further than what we've done today."
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House Speaker Jason White, R-West, in response to the unveiling of the Senate plan that the House will stand firm in its resolve to totally eliminate the state's personal income tax. He also said he is glad the Senate has at least come to the table with a proposal.
"I'm glad they have a play," White said. "I'm glad now hopefully we could start moving down the road of comparing their ideas, the house ideas, and see where the common ground is, where the differences are."
The differences in the chambers' approach to tax cuts tees the policy up for a lengthy debate between House and Senate lawmakers. If those conversations are fruitful, one side will likely bend one way or another.
For now, the bill that will feature the Senate's plan will have to be filed and pass through both a Senate committee and the floor before the House can consider it.
Grant McLaughlin covers the Legislature and state government for the Clarion Ledger. He can be reached at [e-mail] or 972-571-2335.
This article originally appeared on Mississippi Clarion Ledger: MS Senate unveils tax cut plan