Gunn stated that the House will not stop federal pandemic stimulant money from being spent or set a budget for next fiscal year. He made it clear that the House could not stop spending more than $2B in surplus state funds and other measures due to the tax debate. READ MORE: States, cities, and counties call for federal stimulus spending to be approved amid tax cut standoff. He reiterated his desire to see Mississippi’s personal income tax abolished — not cut — even though it may take many years. Gunn stated that at least four proposals or plans have been submitted to the Senate. “… There is extra revenue. What does the Senate do if we don’t give it back to the taxpayers? Spend it,” Lt. Governor. Lt. Gov. Hosemann stated that the Senate has a conservative plan that “includes tax cuts and taking care of core services–not gutting” but he said that he isn’t opposed to eliminating income tax one day, but that that can be dealt with over time. The House’s latest proposal was to reduce the state personal income tax, which generates approximately $1.8 billion or one-third state general fund revenue. This would be done by $100 million per year until it is eliminated. The new proposal includes a six-year “repealer,” which means that lawmakers will have to review the plan and reinstate it within six years. Gunn also noted that the Legislature could suspend the tax cuts at will if the budget falls apart. Under the new proposal, elimination would take 18 years. A $100 million per year cut in income tax would translate into $100 for a Mississippian earning about $40,000 per year, or $200 for a couple earning $80,000. Gunn stated that this ($100 million per year) would amount to 1.5% of our budget or about a penny and a half on the dollar we would give back to the taxpayer. “… Right now we have $1.5 billion in surplus revenue and are on track to have $2.5 billion. We believe that we have sufficient revenue to provide some relief for the taxpayers and will do so before spending these extra dollars. Gunn stated that “we have addressed every Senate objection.” “… One objection remains: “Do you spend the money, or give it back the taxpayers?” Republican Gunn, the House leadership, has been pushing for the elimination of personal income taxes for over two years, but have been stopped by Republican Hosemann, his Senate leadership. Hosemann claims that the current surplus in the budget is due to billions of dollars being dumped into state economies and is likely temporary. He stated that it is not wise to eliminate a third the state’s revenue in uncertain economic times. Senate leaders said there should be many opportunities to reduce or eliminate taxes down the road, depending on the state of the economy. Hosemann and Senator have nevertheless proposed the biggest tax cuts in state history. They also propose a one-time rebate to taxpayers for this year, ranging from $100 up to $1,000, depending on income. House leaders call the Senate tax cuts a “half measure” and claim that Mississippi would be more attractive to businesses and individuals if they eliminated the personal income tax. Hosemann and Senate leaders argue that improving infrastructure and education in the most economically disadvantaged state in the country would be more beneficial to industry and people. Gunn’s House tax reduction proposal has gone through many iterations over the past year. It began as a tax swap. The plan would eliminate the personal income tax and raise the retail sales tax by 2.5 cents per dollar. It contained “growth triggers”, which would have eliminated personal income tax and increased state revenue over the years. Gunn faced opposition from business interests and has since retreated, then recently eliminated sales tax increases. Gunn also has retreated from cuts to car tags fees and reducing grocery sales tax, even though the Senate still proposes lowering the grocery tax from 7% to 5.5%. Despite the Senate’s recent tax cuts, it remained firm against the elimination of the income tax. Hosemann recently proposed that the state’s top tax bracket, at 5%, be reduced to 4.6% for four years and then eliminate the lower tax bracket, at 4%, over the four-year period. In the original proposal, the Senate only proposed the elimination of the 4% bracket. When fully implemented, the new eight-year Senate tax reduction plan would cost $439 million per year. Hosemann and Senator are also proposing to suspend Mississippi’s 18.4-cent-a-gallon gasoline taxes for six months. They will use about $215 million of tax dollars to reimburse Mississippi Department of Transportation. This gas tax is used to fund roads, bridges, and matching federal dollars. With gas prices so high, House leaders stated that Mississippians wouldn’t notice the change. On Wednesday, Mississippi county and city leaders welcomed Gunn’s promise that the House wouldn’t block federal American Rescue Plan Act money from being spent on tax cuts. ARPA funds are being distributed to Mississippi counties and cities in a total of $900 million. The state has received $1.8 billion. Both the Senate and House made proposals to the state for matching local infrastructure spending. This would allow for more significant upgrades. Many counties and cities have deteriorated water, sewerage and roads. ARPA funds provide what Hosemann called a “transformational and generational” opportunity. READ MORE: States, cities and counties call on lawmakers to approve federal stimulus funding amid tax cut standoff Hosemann had denounced Gunn’s threat to halt ARPA spending in favor of tax elimination. Leaders of 299 cities and 82 Mississippi counties called on lawmakers this week to approve the spending in order to give local governments time to invest in major infrastructure projects. Shari Veazey of the Mississippi Municipal League, which represents city governments, called Gunn’s announcement Wednesday “progress.” Veazey stated that she was very supportive of ARPA funds being used. That sounds like progress. There are cities that have shovel-ready projects. But, it takes time to plan and engineer a project, then bid them out and finally the actual construction. These things can move at a snail’s pace — there are supply chain issues and other issues now — and delaying ARPA spending could lead to losing the money, if either the federal deadlines for spending were missed or Congress decides to take back the unspent money. Hosemann reacted to Gunn’s threats and a halt to other spending, legislation or tax debate. Hosemann stated, “None were elected to stop the government from moving forward.” We will not behave in this manner in the Mississippi Senate. We will continue to work, and we will call for public conferences committees on the budget or other general bills.”