Consider This: Teacher Pay, ARPA Funds and the State Income Tax

JACKSON, Miss. (WLBT) - There is lots of activity happening at the state capitol this week.

The state legislature approved a much-needed teacher pay raise plan. For years, Mississippi teachers have been underpaid. If people didn’t realize the value of teachers before, parents quickly understood their importance when kids were stuck at home during the pandemic.

Kudos to the legislature for increasing the pay above the southeastern average. It will help with teacher recruitment and teacher retention. Now, Governor Reeves needs to sign the legislation to make if official.

On the contrary, there is no cooperation among the chambers when it comes to the state income tax.

Speaker Gunn and House Representatives were holding hostage billions of dollars in federal relief funds that are desperately needed in communities across the state, using that as leverage to get the Senate to agree to the terms of their tax cut plan.

The Speaker is now walking back that position and, hopefully, those dollars will soon be flowing to help the towns, cities, and counties across Mississippi. However, we are now hearing adequately funding the budget for the upcoming year could be the next hostage target.

Here’s a statement made this week by Lieutenant Governor Hosemann regarding the situation at the capitol:

“We understand the House is now prepared to allocate the one-time ARPA funds and we look forward to working with them to finalize a plan.

On taxes, the Senate has proposed $439 million in recurring-dollar tax cuts on top of the $235 million ($674 million total) which has yet to be phased in from the 2016 cuts. This is a conservative plan to return money to taxpayers.

During the many hours we have spent with the House on this issue, we have not said we do not support ever eliminating the income tax in Mississippi. We can address further cuts at any time. Taxpayers expect us to be responsible stewards of tax dollars.

The Senate’s plan includes cutting taxes and taking care of core government services—not gutting them.

We also understand the House is inclined to base the budget on the Legislative Budget Recommendation (LBR) from December. Normally, agency budgets finalized at the end of the Session address deficits, new programs, court costs, and other necessary expenses.

Without any adjustments from LBR, there will be no funds for the new state trooper class and no trooper raises. No new fire trucks for rural communities. No new funds for Corrections, even though the agency is embroiled in a federal lawsuit. No match money for the federal infrastructure bill which helps maintain our roads, bridges, and water systems. No public school, community college, or university building funds.

None of us were elected to grind government to a halt. We will not conduct ourselves this way in the Mississippi Senate. We will continue to work and call for public conference committees on the budget and other general bills.”

Most of us would love to have lower taxes, but most people also understand it takes money for government to function properly. If Mississippi didn’t have huge issues that still need to be addressed, then it would be great time to have a tax cut.

But… Mississippi does have lots of issues, and that takes money. And, if eliminating the state income tax is so appealing when recruiting new businesses and residents… why is DeSoto County the fastest growing area in Mississippi? It borders Tennessee… a state with no income tax.

It seems Lieutenant Governor Hosemann and the State Senate are taking a more pragmatic, common-sense approach when it comes to the right way to provide tax relief and not negatively impact our state. We need more of that at all levels of government.

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