Lt. Gov. Delbert Hosemann’s House counterparts took advantage of typos in a bill his Senate approved — bringing forth the most sweeping tax overhaul in modern Mississippi history.
But after a day’s silence on the issue, Hosemann on Friday acted as though he knew little about the snafu.
Hosemann outlined what he said were victories in the bill headed to Gov. Tate Reeves with the Senate’s typos unfixed. Then he attempted to end a press conference after taking, but not really answering, one question from Mississippi Today about the errors. As statehouse reporters kept pressing, Hosemann said he hadn’t “focused” on the typos and didn’t know whether the House had intentionally passed the bill to back the Senate into a corner.
“I don’t know whether they knew it had a flaw,” Hosemann said. “Nobody told me that.”
Hosemann said his team spent “hundreds of hours” drafting its tax overhaul legislation and “an untold amount of allocations and computations” went into the process. But the thoroughness Hosemann described did not prevent a few errant decimal points from making it into the legislation the Senate ultimately approved by mistake.
The upshot is that a bill eliminating the income tax at a much faster clip than Hosemann and many senators wanted, a position they stuck to for months, is set to be signed into law thanks to a clerical error. The law that will be headed to the governor’s desk would dramatically alter Mississippi’s tax structure.
As confusion swirled throughout the Capitol late Thursday and early Friday, many lawmakers said they were unclear how quickly the income tax elimination would happen. The Senate when it voted on its plan intended it to take many years and hinge on economic growth “triggers” being met. But decimal point typos essentially removed the triggers, meaning hundreds of millions of dollars in income tax revenue will have to be cut even if there is growth of just a few million dollars.
At most, the Senate plan would eliminate the income tax over a little more than a decade — roughly the same timetable as House leaders had proposed. Senate leaders had called that approach unwise, and thought the counteroffer they sent to the House would have taken 20 years or more, dependent on growth.
The House, which along with Gov. Reeves has favored eliminating the income tax at a faster rate, ran with the Senate’s mistake. They approved the bill on Thursday and on Friday disposed of a procedural motion that will send it to the governor’s desk.
Opponents of the changes say the poorest state in the union can’t afford to slash a third of its budget and still provide services to citizens, and that a shift to “regressive” taxation with an increased gasoline tax will hit poor people and those of modest means the hardest. Proponents say the bill will bolster Mississippi’s “consumption-based economy” by drawing corporate investment and letting workers keep more of their money.
House Speaker Jason White on Friday afternoon issued a brief statement but did not address the typos in the Senate bill or the bizarre way his chamber found a way to send the tax plan to the governor.
“As of today, we are Building Up Mississippi by eliminating the income tax to further our state’s competitive advantage and award our workforce! HB 1 has crossed a historic hurdle and is heading to the Governor,” White wrote.
White thanked Reeves and House Ways and Means Chairman Trey Lamar. He did not mention Hosemann.
But Hosemann indicated negotiations might not be over, pointing to another tax reform bill his chamber approved Friday morning. Other Senate leaders said little about the mistake and operated as if everything were normal. They voted to invite conference on a separate Senate tax cut bill that remains alive.
Hosemann said he hadn’t seen the House’s tax bill head to the governor’s office yet, and that he hoped the other Senate-approved bill would be the final product.
“There may be some clarifications needed and these issues have come up this morning. And so we’ve done SB 3095 and sent it back down to the House to take a look at it,” Hosemann said. “Hopefully the governor will sign the amended legislation the Senate sent back to the House.”
But it is doubtful the Senate has any leverage to force the House back to the negotiating table since much of the House’s plan is already headed to Reeves, who vowed on Friday to sign it into law.
White, in his Friday statement, suggested the Legislature could use the Senate’s tax bill as a vehicle for changing the structure of the Public Employees Retirement System, which had been a key wedge issue between the chambers in their negotiations over tax reform.
“I’m encouraged that the Senate has invited conference on SB 3095 to establish a dedicated stream of revenue to fund PERS going forward,” White wrote, referring to his chamber’s preferred approach to fixing the system.
Before taking questions at Friday’s press conference, Hosemann celebrated elements of the bill headed to Reeves, including lowering the sales tax on groceries from 7% to 5%, increasing infrastructure funding and cutting PERS benefits for future employees to help shore up the system financially.
“Today is about the biggest win we have had on these issues in the history of this state,” Hosemann said. “Now, if we need to clarify something, they’ll clarify it. But what’s happened today, both on the grocery tax, the income tax, and PERS … I think we’ve done so many positives. I don’t want to take any of the glow from the House or the Senate on the work that we did for a year.”
The events of the past few days were a “team effort,” Hosemann added.
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