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Yahoo
06-04-2025
- Business
- Yahoo
Bobby Harrison: Will your taxes go up when Mississippi eliminates the state income tax?
House Ways and Means Chair Trey Lamar estimated that the Mississippi income tax will be phased out in 14 years under legislation passed this session and touted by members of the state's Republican political leadership. Nobody was crowing louder about the phase-out of the income tax than Republican Gov. Tate Reeves. He even went on Fox News to brag about it. 'There are moments in a state's history that mark a turning point,' Reeves said on social media. 'A moment where the past gives way to the future … The elimination of the income tax is not just a win for our economy. It's a win for freedom. A win for families. A win for the idea that Mississippi can lead — that we will lead.' Reeves claimed victory even though he originally proposed just before the 2025 legislative session began to eliminate the income tax much quicker. But if Lamar is right, the income tax cut that the Legislature eventually passed and the governor signed into law will be fully eliminated just as the now 50-year-old Reeves nears retirement age. This is at least a little ironic since for years, Mississippi has not taxed retirement earnings. But many of those retirees who do not pay an income tax under state law and other Mississippians as well will face a tax increase under this newly passed legislation touted by Reeves and others. The same legislation that Reeves touts for eliminating the income tax increases the excise tax on a gallon of gas by 9 cents to 27.4 cents per gallon. This will surely represent a tax increase for many seniors, who as stated earlier, pay no income tax. But it also will result in a tax increase for some lower income Mississippians, who pay a limited tax on their earnings because the state's income tax already is so low. Supporters of the legislation argue that a reduction in the tax on groceries from 7% to 5%, which also is included in the new law, will offset the 9-cent per gallon increase in the gasoline tax. Each person's situation is different, based on how far they have to drive, the amount and type of food they buy and the income they earn. But in general, according to information released by legislative leaders, the gasoline tax will bring more revenue to the state — $212 million per year — than the grocery tax cut will take from the state at $128 million per year. It stands to reason more Mississippians will pay more, not less, from the combined increase in the gasoline tax and the cut in the grocery tax. The group that will receive a windfall from the legislation is the state's most wealthy. For Mississippians earning more than $365,000 annually, they will save more than $40,000 per year, according to the national nonprofit Institute of Taxation and Economic Policy. The savings for the wealthiest Mississippian will be as much as the annual earnings of average Mississippians according to Kyra Roby, a policy analyst for the advocacy nonprofit One Voice. But these assumptions are based, in part, on another assumption: that the income tax will be eliminated. Much could happen after Reeves leaves office. A new Legislature and governor — facing possible declines in revenue — could halt or repeal the tax cuts if they faced the option of having to make significant cuts in health care, education and other public services. And then there is the issue of the bill's flaws. The legislation calls for the income tax to be reduced from a flat rate of 4% to 2.9% on taxable income by 2030. But the rest of the income tax phase-out will be determined by growth triggers placed in the legislation by the Senate to ensure that the income tax cuts would be slowed or even halted for a year if revenue did not meet certain levels. But typos in the bill, the House leadership and Reeves reasoned, left the triggers at low levels and thus would lead to a quicker elimination of the tax cut. By contrast, some cautioned the language creating those triggers could be interpreted as only reducing the income tax by a minuscule amount each year, meaning it might take much longer to completely phase out the income tax. In the past, such complex language would go to conference, where House and Senate leaders would take time to ensure the language was correct and did what was intended. But Reeves and House leaders eschewed that process. They believed it was more important to pass what may be a flawed bill and tout the elimination of the income tax while leaving the possible consequences for perhaps a whole new group of state leaders. This column was produced by Mississippi Today, a nonprofit news organization that covers state government, public policy, politics and culture. Bobby Harrison is the editor of Mississippi Today Ideas.
Yahoo
21-03-2025
- Business
- Yahoo
Mississippi House passes state income tax bill
MEMPHIS, Tenn. — Mississippi House lawmakers have passed a bill that would phase out the state's income tax while adjusting other taxes. House Bill 1, also known as the 'Build Up Mississippi Act', would 'phase out the state income tax on the taxable income of individuals.' The bill, authored by Representative Trey Lamar, was transferred to the Senate in January and amended earlier this week. The House voted 92 to 27 to agree with the Senate's amendments on Thursday. Mississippi Governor Tate Reeves celebrated the move. 'Congratulations to the Mississippi legislature on passing historic tax reform and ELIMINATING THE INCOME TAX!' Reeves posted to Facebook. 'What a great day for Mississippi taxpayers.' While Reeves says he can't wait to receive the bill, the bill's ultimate fate is uncertain as a motion to reconsider was also entered on Thursday. Reeves acknowledged that there are lawmakers who 'desire future tweaks to this law.' Reeves says that changes can be considered in future legislation. In addition to phasing out the income tax, House Bill 1 would reduce the sales tax rate on groceries and 'revise the sales tax exemption' on gas. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Associated Press
18-03-2025
- Business
- Associated Press
Mississippi Senate, House propose new income tax elimination plans, set stage for showdown
Mississippi House and Senate leaders on Monday evening unveiled new plans to eliminate the state income tax and raise gasoline taxes — charting a path to more negotiations over the most notable legislative debate of the 2025 session. Monday marks the first time the Senate leadership has proposed a plan to eliminate the income tax, a significant move from its previous position wanting only to cut the tax that accounts for nearly one-third of the state budget. Republican House Ways and Means Chairman Trey Lamar said the move could bring the chambers closer to reaching a final agreement. 'I can't underestimate the importance of the Senate placing into written form and out in the open public that they are agreeing to eliminate the income tax,' Lamar said. 'We're willing to work with them. We are not willing to compromise on total elimination of the income tax and taking care of some the infrastructure needs we have.' The House also changed its position Monday on a few key provisions. It agreed to increase the state's net sales tax from 7% to 8%, down from the eventual 8.5% target the chamber had originally proposed. The revenue from this tax increase would provide $48 million annually to pay for infrastructure improvements via the State Aid Road Fund. The remaining funds would go into the state's general fund. It also changed what had been a new 5% sales tax on gasoline to a 15-cents-a-gallon excise tax increase, phased in at 5 cents a year over a three-year period. That would bring in approximately $23 million a year once fully phased in, Lamar said. This would be added to the current 18.4-cents-a-gallong excise Mississippi motorists currently pay. The House plan would also cut the sales tax on groceries from 7% to 5%. The new House plan would also create a new fund that gives those over the age of 65 property tax credits of $200 a year. This provision is designed to allay the concerns of senior citizens, who stood to benefit little from income tax elimination because Mississippi exempts retirement and Social Security income from state income taxes. However, the most surprising development was in the GOP-majority Senate, which finally answered calls from House leadership and Republican Gov. Tate Reeves to propose a plan that eliminates the income tax. Senators proposed phasing out the tax over an undefined period, but it would most likely take longer than the House has proposed. The House held to its position that the income tax must be eliminated by 2037. Republican Lt. Gov. Delbert Hosemann called the Senate plan fiscally responsible, while House leaders said a quicker timeline is needed for abolishing the tax to ensure that economic growth for the state. The Senate plan would decrease the 4% income tax rate — already among the lowest in the nation — by .25% each year from 2027 to 2030 and leave it at 3% in 2030. Afterward, the income tax would be reduced with 'growth triggers' or at a proportional rate depending on the difference between the state's revenue and spending plans that year. 'We're going to basically let our economy dictate the rate and how progressive we are in reducing the income tax on citizens in our state while protecting the core functions of government that we're supposed to provide,' Senate Finance Chairman Josh Harkins said. Lamar said the Senate's language on triggers, which he had not seen as of Monday afternoon, would be crucial to reaching a final agreement. 'The last thing we want to do is mislead the Mississippi citizens to have them believe they're going to get their income tax eliminated and not (have it) actually work,' Lamar said. 'So that trigger language will be key.' The Senate plan also immediately reduces the sales tax on groceries from 7% to 5%, increases the gasoline tax by 9 cents over three years to fund infrastructure projects and overhauls the state public employee retirement system. Many Democrats are expected to oppose either plan. Democratic Sen. Hob Bryan of Amory said the new Senate plan marks a 'sad day' in the state's history because it forsakes the government's responsibility to provide key services in one of the poorest states in the nation. Bryan and others have warned that cutting revenue and upending the state's tax structure in uncertain economic times — with potential massive cuts in federal money Mississippi relies on — is foolhardy. 'I know the snake oil salesman who showed up in Mississippi selling this bill of goods must be happy,' Bryan said. Despite the new offers from each side, the two chambers are still far apart in their negotiations and the Republican leadership of each has continued criticizing the other as the 2025 legislative session is scheduled to end in roughly two weeks. Lawmakers will likely conduct negotiations on a final tax cut proposal in a conference committee. The deadline for them to reach a final agreement is March 29. If they don't meet that deadline, they could try to suspend their rules. If the two chambers can't reach an agreement, the governor could call them into a special session and try to pressure the two chambers to find a way to abolish what he and others call the 'tax on work.'
Yahoo
09-03-2025
- Politics
- Yahoo
Bobby Harrison: ‘School choice' supporters in MS want public money without accountability
It is becoming crystal clear that proponents of school choice — sending public funds to private schools — want the money but do not want the accountability. Two of those leading proponents — House Ways and Means Chair Trey Lamar and state Auditor Shad White — have made it clear in recent days through their words or actions that they eschew accountability for private schools receiving public funds. The latest example of avoidance of accountability for private schools receiving public funds is legislation authored by Lamar, a Republican from Senatobia, that has passed the House and is pending in the Senate Finance Committee. The legislation over time could more than double the public dollar amount that private schools could receive from a dollar-for-dollar state tax credit on the amount donated to the schools. Lamar, whose hometown private school Magnolia Heights received $386,500 through the program last year, tried unsuccessfully in 2024 to pass similar legislation. The legislation died in the Senate after the agency that oversees the program revealed it did not know the number of children served by the private schools through the multi-million dollar program. Last year the Department of Revenue in response to questions said, 'This information (number of eligible students enrolled) is provided to DOR at the time of application … but is not updated annually. DOR does not maintain this information other than with the original request.' In the original application, 'DOR reviews the information provided and issues a letter ruling advising whether they qualify or not. The original request is covered under confidentiality statutes.' In 2019, legislation called the Children's Promise Act was passed to provide a tax credit for institutions providing services to foster children. But sneaked into the legislation and barely mentioned at the time was language to provide tax credits for private schools that enrolled low-income students and students with a chronic illness, or a physical, intellectual, developmental or emotional disability. Nancy Loome, executive director of the pro-public education group The Parents' Campaign, pointed out that theoretically the school could enroll one student with a food allergy or with an attention deficit disorder and be eligible to receive up to $405,000 annually under current law in tax credit funds. The legislation does not place any guidelines on the number of students who must be enrolled to be eligible for the tax credit benefits. Supporters argued that the tax credits are not public funds. That is a disingenuous argument. Under the law, a person can receive a dollar-for-dollar credit for up to 50% of his or her property tax liability, and a business can receive the same 50% reduction in the amount of income tax owed by making a donation equaling 50% of the tax liability. No matter how you strike it, that's money coming out of the state coffers. Currently $9 million annually in tax credits can be doled out to the entities and individuals making donations to private schools. Lamar's legislation could more than double the amount over time. In 2024, when asked the number of students who made the schools eligible for the tax credits were being taught, Lamar admitted he did not know but would find out. One year later, it appears that information still is not available. White, the state auditor, on numerous occasions has been critical of public school funding even though under state and federal law, public schools face what some argue are burdensome accountability standards. While White demands accountability of public schools, he said recently during a Mississippi State Stennis Institute of Government/Capitol Press Corps luncheon that no government oversight of private schools receiving public funds is needed. 'They are held accountable by the parents who choose to send their kids there,' White said. White went on to bolster his argument claiming that the government does not provide oversight of the private colleges and universities that enroll students who are aided with their tuition costs by federal PELL grant funds. When pointed out to White that the federal government does monitor or provide oversight of those schools to ensure that the federal funds are being properly spent, he replied, 'Great. Again the standards are going to be different for a lot of these programs.' He then said Dollar General is not being monitored for the federal food stamps it receives. In reality, though, both the stores that take food stamps and the people who receive the food stamps are monitored. Both can face consequences for the improper use of those food stamps. So, in White's analogy, Dollar General would be subject to more governmental oversight than private schools receiving public funds would — if Lamar and White get their way, of course. This column was produced by Mississippi Today, a nonprofit news organization that covers state government, public policy, politics and culture. Bobby Harrison is the editor of Mississippi Today Ideas.
Yahoo
02-03-2025
- Business
- Yahoo
This week in politics: School choice bills return for second round in MS House
The Mississippi House of Representatives has for the second-year advanced bills that would increase the amount of taxpayer cash available for families to spend on private schools. On Wednesday, the House passed House Bill 1902, 1903 and 1894, containing code sections of state law relating to the Children's Promise Act, a multi-million-dollar tax credit program allowing parents to collectively receive $9 million in tax breaks for sending their children to private schools. The Children's Promise Act, first passed in 2019, has been used as a tax credit program for families to get back money they pay to "charitable organizations." House Ways and Means Chairman Trey Lamar, R-Senatobia, told the Clarion Ledger the program's current funding limit is inadequate. "It's a priority of mine," he said. "The need and demand for this outpaces the allowance of credits, and other tax credit programs are not being fully utilized." HB 1902 would take unused tax credits away from other programs and place them with the Children's Promise Act. HB 1903 would increase the amount of money the program receives in total each year from $9 million to $16 million for families to receive tax breaks. The other piece of the puzzle is HB 1894, which at first glance looks only to be a state bond issuance bill. Within it lies the Children's Promise Act. When Lamar introduced the legislation to his committee, he made no mention of the portion that included tax dollar spending on private schools. The bill passed committee without any opposition. "It is a little bit frustrating… It would be helpful to the whole House if (Lamar) would give us more time and a little bit more headway in terms of being able to understand what's in the bills," Minority Leader Robert Johnson, D-Natchez, said. For years, similar tactics have been used to get legislation through the Capitol. Lamar's most recent was Smith Wills Stadium, which transferred from Jackson's ownership to the state via a land conveyance bill passed in 2024. Jackson delegates later said Lamar made no direct mention of the bill's intent when presenting it. Senate Education Chairman Dennis DeBar, R-Leakesville, has been on the record for years as opposing legislation that increases public funding for private schools. First 2025 School choice effort dies: MS House Speaker says school choice bill doesn't have consensus among House GOP. See why On Thursday, independent pharmacists gathered at the Capitol to urge lawmakers to pass meaningful reform on Pharmacy Benefit Managers, the pharmaceutical middlemen who often control both drug prices on consumers and the amount of money pharmacists can make on prescriptions. "Independent pharmacies are often reimbursed less than the acquisition cost of medications," a press release on the press conference stated. "Furthermore, an independent audit found that chain drug stores and other PBM affiliates are paid eight times more than your hometown, independent pharmacy. PBM's steer patients to mail order or big box stores, killing small, independently owned pharmacies. This practice hurts communities and limits access to care." School choice moved up via in-house rule School choice in MS House lives by in-house rule, not Democratic principle. See details PBM issues: Independent pharmacists could risk closure by 2026 in Mississippi. Read why Both the House and Senate have passed legislation to increase transparency and accountability for the business that PBMs do in Mississippi. In 2024, the Clarion Ledger identified that independent pharmacists on whole faced closures within the next few years if nothing was done to address what they described as unfair PBM business practices. House Speaker Jason White said in a press release this week he is committed to ensuring some transparency and accountability is put on PBMs. On Tuesday, Lamar told the Clarion Ledger that if push comes to shove, he would be happy if the governor calls a special session to fully eliminate the state income tax. Both the House and Senate have passed bills to dramatically cut taxes in some areas and raise them in others. One major difference between the chambers' approach is that the House plan seeks to fully eliminate the income tax while the Senate seeks to only reduce it to 2.99%. Tax cuts: Senate passes tax cut plan. See what it does For several weeks, rumors have been circulating that Republican Gov. Tate Reeves is mulling whether to call a special session to force the Senate to negotiate an income tax elimination. Reeves has gone on the record for being largely in support of the House plan. Lamar said he and his colleagues are dead set on full elimination, and if the Senate doesn't like it, he's happy with suspending all other legislative business until some sort of agreement is made. "I fully support the governor calling special session to highlight the need to eliminate our income tax for the future of Mississippi," Lamar said. Grant McLaughlin covers state government for the Clarion Ledger. He can be reached at gmclaughlin@ or 972-571-2335 This article originally appeared on Mississippi Clarion Ledger: MS politics: School choice bills advanced by State House again
