Lieutenant Governor Hosemann: Suspend Mississippi gas tax for 6 months
Speaker Philip Gunn, R-Clinton, left, joins other Mississippi House leaders to say they have approved a plan to raise some of the lowest teachers’ salaries by $4,850 on average of the country, during an afternoon press conference at the Mississippi Capitol. in Jackson, Mississippi on Thursday, March 10, 2022. The plan is now before the Senate for consideration. (AP Photo/Rogelio V. Solis)
PA
JACKSON, miss.
Mississippi Lt. Gov. Delbert Hosemann said Monday he and other Senate leaders are pushing to suspend the state’s gas tax for six months to give drivers a break as prices rise. gasoline continue to rise.
Several states are taking similar steps, and Hosemann’s announcement adds a new twist to increasingly contentious legislative discussions about possible tax relief in Mississippi.
Republicans control the state House and Senate by wide margins, but leaders from both chambers disagree on proposals to cut or eliminate income taxes.
The state gasoline tax is 18.4 cents per gallon and the money goes to the Mississippi Department of Transportation. Republican Hosemann proposes that the state use money from a capital expenditure fund to give $215 million to the department to offset the temporary loss of gas tax revenue.
“We can do this because we’re having a really good year in Mississippi,” Hosemann said at a news conference.
Mississippi has enjoyed strong tax recoveries in recent months, in part due to federal spending during the COVID-19 pandemic.
House Speaker Philip Gunn and Governor Tate Reeves, who are also Republicans, want the legislature to phase out state income tax.
House Ways and Means Committee Chairman Trey Lamar, a Republican from Senatobia, said the proposal to suspend the gas tax was a political gimmick.
“Taxpayers are faring significantly better off from the initial phase of our income tax reduction and eventual income tax elimination than a one-time, temporary gas tax break” , Lamar said Monday.
Lawmakers face deadlines later this month to agree on tax and budget bills for the year that begins July 1. The regular three-month session is scheduled to end on April 3.
Mississippi’s income tax generates 34% of state revenue. Critics say the state cannot afford to cut taxes because it chronically underfunds education and has significant financial obligations to improve its mental health and foster care systems.
Gunn is pushing to phase out all state income tax. Hosemann says he wants to reduce but not eliminate income tax.
Several state legislatures are considering tax cuts this year.
The Mississippi House and Senate passed separate tax cut proposals. Senate Bill 3164 would eliminate some of the income tax, while House Bill 531 would phase out the income tax over several years.
On Monday, a Senate committee inserted the latest version of the Senate plan into the House bill, and a House committee inserted the latest version of a House plan into the Senate bill.
Both plans would reduce the 7% sales tax on groceries. The Senate plan includes one-time income tax refunds of $100 to $1,000, with larger refunds given to people with higher incomes.
Mississippi has a 7% sales tax on most other items. Senate leaders opposed the sales tax increase and House leaders on Monday backed away from their proposal to raise it to 8.5%.
Senate Finance Committee Chairman Josh Harkins, a Republican from Brandon, said the Senate’s latest plan would give leaders a chance to consider further cuts if the state’s economy does well in a few years.
Harkins also said of the Senate plan, “It would be the biggest tax cut in Mississippi history.”
Mississippi’s poorest residents would see no benefit in eliminating income tax because they are not paying it now.
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Follow Emily Wagster Pettus on Twitter: http://twitter.com/EWagsterPettus.
