In a climate of expected discussions regarding tax reductions, Mississippi’s Republican Governor Tate Reeves advocated for the abolition of the state income tax during his State-of-the-State Address on Wednesday. He emphasized that the money generated from this tax should belong to taxpayers instead of the government.
Last week, the House passed legislation designed to phase out the state income tax, along with a reduction in the grocery tax while also increasing sales and gasoline taxes. This proposed plan aims to ultimately reduce the state’s general fund by around $1.1 billion from its current total of $7 billion.
Delivering his speech on the Capitol’s south steps before a combined audience of the House and Senate, Reeves indicated favor for the House’s approach, although he fell short of fully endorsing its details. He remarked on the bipartisan support for the bill, highlighting its potential to permanently eliminate the tax on work in Mississippi.
The governor, however, did not address the provisions of the House bill that involve raising sales taxes and introducing a new gasoline tax of 5%. Previously, he has expressed his opposition to any “tax swaps” that would increase overall tax rates, even if intended to result in a net tax reduction.
As for the Senate’s approach to tax cuts, there is currently no proposal available, though Republican Lt. Gov. Delbert Hosemann has committed to presenting a plan soon. Reeves urged Senate leaders to advance the House proposal to his desk without delay. He made it clear that inaction was not an acceptable option.
In addition to tax discussions, Reeves reiterated his stance against expanding Medicaid for the working poor, labeling it as “welfare.” He noted that upcoming changes from the Trump administration regarding Medicaid could lead to increased costs for states that have chosen to expand this coverage.
Medical professionals throughout Mississippi have advocated for Medicaid expansion, arguing it would improve healthcare access for low-income residents. Economists have also predicted that such an expansion would be financially beneficial for the state.
Although no significant legislative proposals have yet been introduced to expand Medicaid, both the Senate and House Medicaid Chairs advanced preliminary “dummy” bills to facilitate potential future legislation. This move is seen as a proactive measure given the uncertainties with the incoming Trump administration.
Responding to Reeves’ address, State Sen. David Blount, a Democrat from Jackson, highlighted the need for health coverage through Medicaid expansion, increased funding for public education, enhanced teacher salaries, better infrastructure, and combating corruption. He criticized the push for income tax elimination, labeling the proposal as reckless.
Blount pointed out that Mississippi has enacted substantial tax cuts amounting to over a billion dollars annually in recent years. He cautioned that while federal aid during the COVID-19 pandemic has temporarily helped the state budget, such funding is not a sustainable solution.
He encouraged Mississippi to align with the majority of states that have extended Medicaid coverage to working-class individuals, emphasizing that the federal government covers 90% of the expansion costs. This initiative could provide insurance to many low-income residents who currently lack adequate coverage, putting them at risk of financial distress during medical emergencies.
Reeves celebrated the recent economic developments in Mississippi and urged enhancements to accountability measures within public K-12 education. He commended newly released statistics indicating improvements in math and reading scores among public school students in the state.
