Governor renews call for income tax elimination in his latest budget proposal

Gov. Tate Reeves renewed his call to eliminate the personal income tax, a major source of state revenue, in the first budget proposal of his second term.

The Republican governor’s proposal would phase out the income tax, which currently accounts for about 30% of the state general fund, by 2029. An earlier $525 million cut in the income tax, passed during Reeves’ first term, is currently being phased in.

“My objective this year is to keep our state’s momentum going — for all Mississippi,” Reeves said in a statement.

Overall, Reeves is proposing a state-support budget of $7.96 billion — an increase of $120 million or 1.5% over the budget passed by the Legislature and signed into law by Reeves for the current year. The new budget year begins July 1. Legislators are scheduled to finalize a budget for the upcoming fiscal year in April or May.

Reeves is proposing $100 million for development “in every region of our state” of potential sites for major economic development projects. In 2023, the Legislature approved $20 million for site development.

“Project-ready sites are the lifeblood of economic development, and Mississippi will continue winning new business as long as they are available,” Reeves said in his budget narrative.

Additional funds are being proposed in the governor’s budget for workforce training and to improve ports and airports. Reeves also is calling for “adding capacity” to I-55 in DeSoto and state Highway 7 in Lafayette County “to entice additional companies to Mississippi.”

In the budget narrative, Reeves committed to increasing the rate paid to hospitals through Medicaid managed care, resulting, he said, in an additional $70 million for Mississippi hospitals — most of which are financially stressed and many of which are in danger of closing or reducing services.

Legislative leaders are considering other options for the state’s stressed health care system, such as expanding Medicaid to provide coverage for primarily the state’s working poor and providing an additional stream of revenue for hospitals. Reeves has consistently opposed Medicaid expansion and did not address the issue in his budget narrative. Medicaid expansion would garner more than $1 billion annually in federal funds.

Reeves is proposing $10.4 million to increase the state police force patrolling in portions of Jackson to 235 officers. Some have criticized efforts by the state to expand its police presence in Jackson, saying instead the state could provide funds to supplement the Jackson Police Department.

In the area of education, Reeves renewed his call for legislators to pass his Patriotic Education Fund.

“No American child should be taught that the United States is an inherently evil nation that solely acts in its own self-interest,” Reeves wrote in the budget proposal. “Unfortunately, that worldview is being taught by radical activists in too many schools across the country, and that’s why Mississippi must take proactive steps to ensure this warped ideology does not infiltrate our state’s schools.”

The governor is proposing $5 million for grants to schools that choose to teach positive American history.

He also is proposing an additional $1.8 million for special needs children to attend private schools.

The governor does not provide any additional funds for the chronically underfunded formula that provides the state’s share of the basics to operate local school districts. The Mississippi Adequate Education Program was underfunded $176 million for the current school year and $3.5 billion since 2008.

Reeves’ budget narrative also calls for legislators to pass a “parents bill of rights” that would ensure “that parents represent the sole decision-making authority for their children.”

He’s also proposing a women’s bill of rights, which “would unequivocally recognize the distinct biological differences between men and women and would place this language clearly and concisely into law.”