Constituent Report for March 21

JACKSON, MS – Constituent Report

This week we passed a major tax cut bill called the Taxpayer Pay Raise Act of 2016.  Senate Bill 2825 would phase out income tax on the first $5,000 of taxable income and gradually eliminate franchise tax on the property of businesses and their capital.

The idea is that Senate Bill 2858 will reduce the tax burden on small businesses, making it easier for them to grow and reinvest.

The bill would also eliminate the 3 percent and 4 percent tax brackets levied on income, keeping more money in the pockets of taxpayers.

The plan would be phased in over a 15-year period, making it a fiscally responsible approach because business and job growth by then will have offset the tax dollars that the state no longer collected.  The bill was sent to the House for their consideration.

Without a doubt, the bill with the most controversy this week was Senate Bill 2921.   We debated the bill for almost 4 hours before it passed the Senate.  As originally submitted the bill would have added an 8-percent sales tax on gasoline and diesel, increase the cost of car tags with varying user fees and require counties to raise taxes in order to share the money that would be generated to fix the state’s ailing roads and bridges. At current prices, it would raise the cost of gasoline 12 cents a gallon at the pump and increase car tags for passenger cars by $6.  The bill, as it existed, had little to no support.

Instead what we passed was a placeholder or “dummy bill” in order to meet Wednesday’s deadline for a floor vote. It includes sections of state law that, if it is passed by the House, would allow for a Conference Committee to propose the best way to finance needed highway and bridges repairs and upgrades.  Any recommendations would have to be passed by both the House and Senate

There is no argument that the state’s infrastructure is in bad need of repair and upgrade.  The Highway 51 Bridge is just one example.  Its proposed two year repair is going to have a negative economic impact not to mention a huge inconvenience to businesses and individuals.  Imagine if it were the I-55 Bridge over the Coldwater River.  While there is no easy answer, we need to address the issue and it needs to be sooner rather then later.

The Senate also passed a proposed $6.2 billion 2017 Fiscal budget that would direct an extra $55 million toward public education at all levels and reduces agency funding by an average 5 percent in other areas.

Under the proposal, the Mississippi Adequate Education Program, the school funding formula, would receive an additional $40 million to its $2.3 billion budget, universities would see a $10 million increase, and community colleges would receive a $5 million increase over their current budget. State general fund revenues have grown $166.7 million over the past two years with MAEP receiving $150 million of that growth. Meanwhile, other agencies were either cut or received level funding.