Speaker Philip Gunn’s last-minute tax cut plan is the latest, and most extensive, of the revenue reduction schemes put forth by state leaders in the current session. A plan devised by Lt. Gov. Reeves was passed by the Senate yesterday on a vote of 38-9. See how your senator voted here. That plan would pull close to $400-million from the state budget. But Speaker Gunn raised the stakes significantly with a last-minute bill introduced Monday night, passed yesterday by the House Ways and Means Committee, and passed by the full House today. See how your representative voted here. Numerous amendments were offered; all failed. Amendment 1 would have made the income tax cuts effective only after the MAEP has been fully funded for three consecutive years. See your representative’s vote on that amendment here. Amendment 2 would have made the income tax cuts effective only after PERS had been funded at 80% for three consecutive years. See your representative’s vote on that amendment here. If enacted, the Speaker’s plan would devastate Mississippi’s budget by $1.7-billion.
Some of the state’s largest newspapers have published editorials decrying the idea of tax cuts at a time when Mississippi’s public services, including education, are under-funded. These editorials offer particularly harsh critiques of Speaker Gunn’s plan.
An excerpt from the Sun Herald:
Speaker of the House Philip Gunn’s proposal to phase out Mississippi’s individual income tax is political pandering. It is both deceptive and unworkable.
It is cruel because it gives taxpayers the idea that state government really can, in the words of Lt. Gov. Tate Reeves, give them “a pay raise.”
But not even Reeves, a former state treasurer, dared to take the idea to the extreme Gunn has done.
Click here to read the full editorial on The Sun Herald‘s website.
An excert from the Northeast Mississippi Daily Journal:
An outbreak of financial delusion that would rob our state’s essential budgets of 30 percent, or more, of reasonably anticipated income happened Tuesday at the state Capitol.
House Speaker Philip Gunn, a Clinton Republican, has joined an apparent election-year contest to see which GOP leader – the governor, lieutenant governor or speaker of the House – can propose the largest tax cut and, in his case, the most irresponsible one.
Gunn proposes abolishing Mississippi’s personal income tax, which could cost the treasury $1.75 billion in current revenues by 2028. The formula won’t kick in fully unless state revenue growth is above 3 percent per year, but that’s hardly sufficient protection against the fiscal risks involved.
Eliminating the income tax, for example, could cost as much as the equivalent of one-half the K-12 education budget.
Click here to read the full editorial on the Daily Journal website.
An excerpt from The Clarion-Ledger:
First off, if lawmakers cut out the state income tax, they will have no other choice than to raise taxes other places if they want to protect Mississippi from going bankrupt.
Personal income taxes currently amount to $1.7 billion, which is nearly 30 percent of the state’s $6.1 billion general fund budget.
Granted, Gunn wants to phase this out over 10 years, but that doesn’t really matter. A stepped phaseout is just a gimmick to make it seem easier. The plan cuts 30 percent of the state’s revenue, period. Over the course of 10 years, lawmakers will either cut spending by 30 percent — not at all doable — or offset the personal income tax cuts with tax increases in other areas.
Click here to read the full editorial column on The Clarion-Ledger‘s website.
