Mississippi’s legislative leaders believe two things will happen when lawmakers convene for their next session in January: They will attempt to cut state taxes in some form, and they will have almost the same amount of money to spend during the next fiscal year as they do for the current fiscal year.
Members of the Joint Legislative Budget Committee and Republican Gov. Tate Reeves agreed on Thursday morning to estimate that the state government will collect about $7.6 billion in tax revenue during the next fiscal year, a slight increase in revenue collections of $26.9 million from the current fiscal year.
Reeves, who is strongly urging lawmakers to pass legislation to abolish the state income tax, pointed out that $600 million in tax revenue from the current fiscal year remains unspent, and that it could be used for tax cuts.
“I would encourage you for the additional $600 million that we return that back to the taxpayers,” Reeves said.
House Speaker Jason White, who is the current chair of the JLBC, has also strongly encouraged his colleagues to support eliminating the income tax and trimming the grocery tax. He joked with Reeves that there are “lots of crosshairs” on that unspent revenue.
“Now, some have different bullets than others, but targets nonetheless,” White said.
The income tax accounts for about 30% of state general fund revenue.
Republican Lt. Gov. Delbert Hosemann, the leader of the Senate, wants lawmakers to trim the 7% sales tax on groceries, the highest of such a tax in the nation. He told reporters after the meeting that he wants to trim the tax while also making sure the state’s public employee retirement system is adequately funded.
Hosemann said he has an ideal rate in mind for where he would like to see a new grocery tax reduced to, but he declined to share it with reporters ahead of the 2025 legislative session.
Corey Miller, the state economist, told the lawmakers that Mississippi’s economy this year will grow slightly more than anticipated, but predicts the state economy, like the U.S. economy, will slow slightly in 2025 and 2026.
Miller also said sales tax collections have slumped compared to last year, but income tax collections have increased in recent months. He attributed the increase in income tax revenues to anecdotal reports of an increase in the number of new businesses started.
The Thursday meeting is typically a pro forma part of the state’s budget writing process. The more important meeting will occur in early spring when the committee will adopt a final revenue estimate to determine how much money lawmakers can spend before they pass a budget and adjourn.
Republish our articles for free, online or in print, under a Creative Commons license.
