For the past few years, the Mississippi Senate put the brakes on the push by the House and Gov. Tate Reeves to eliminate the state’s personal income tax.
Key senators and Lt. Gov. Delbert Hosemann rightly said that it would be foolhardy to cut out about a third of the state’s revenue stream until Mississippi got a better handle on how much of its recent collections boom was a result of massive federal outlays during the COVID-19 pandemic. Such caution became even more sensible with the reelection of Donald Trump as president, who has charged back into the White House on a mission to slash government spending and the number of federal employees. Given that Mississippi is a leading recipient per capita of federal spending, if Trump is able to reduce outlays by anything close to what he desires, this state is going to feel it in a lot of places, including in the state treasury.
Thanks, however, to a few typos that Senate leaders, their attorneys and other members of that chamber didn’t catch, the bill that passed the Legislature last week threw caution to the wind. Instead of phasing in elimination of the income tax over, at best, 20 years, it will be done in about 10, just what the House of Representatives said it wanted.
The Senate’s counterproposal was supposed to say that once the income tax was reduced to 3%, further graduated cuts would depend on there being enough additional revenue to cover 85% of the cost. Instead, the Senate drafters of the bill got their percentages and decimal points confused, and what appeared was .85%. Rather than hundreds of millions of dollars in new surpluses triggering future tax cuts, it would only require a few million.
So instead of a real counterproposal, the Senate by mistake delivered the House a bill that required no further negotiation. And instead of sending the bill back to the Senate, knowing that was not what its members intended or thought they were voting on, the House and Speaker Jason White said, “Thank you, very much,” and rushed the bill on through for Reeves’ anticipated signature.
There is still a chance that lawmakers could fix the error before the session is over with a separate piece of legislation. That would be the honorable — not to mention prudent — thing to do. But early indications are the House is unlikely to do so, saying instead there is plenty of time to fix the problem, since the triggers don’t come into play until 2031.
That may be true, but flawed legislation should be fixed now, not later. Six years from now, many of those currently serving in the Legislature won’t be at the Capitol. Their replacements should not be shouldered with amending a law that never should have passed in that form in the first place.
Late last week, Hosemann was trying to gloss over the error, pointing out all of the other wonderful things the legislation does: reducing the sales tax on groceries, putting more money into road and bridge repair and construction, shoring up the state’s financially troubled pension plan. He seemed irritated that reporters were so focused on the typos in the income tax portion of the bill.
But those typos repudiated what Hosemann and many others in the Legislature had been saying all along — namely, that after two huge tax cuts in recent years, Mississippi needed to be careful before taking a third large swipe from the stream that funds state government and the services it provides.
There is no way to overlook those typos. Until they are corrected, the bill puts Mississippi on a path that will most likely require either cutting services or raising other taxes, such as already high sales and property taxes.
The bill is ill-advised. There is no mistaking that.
