/The Mississippi Republican income tax bet

The Mississippi Republican income tax bet

Due to the fact that Mississippi lawmakers pay them less than other states, Mississippi is facing a serious teacher shortage. Many of the teachers that we have aren’t equipped with the necessary classroom resources, sometimes even classrooms, to teach our students. Because state employees salaries are so low, agencies that provide essential government services are losing staff. Staffers are now moving to the more lucrative private sector. Because the potential workers lack the skills or education required to perform these jobs well, businesses across the state have difficulty attracting and retaining workers. Many Mississippians are experiencing problems with their daily lives due to aging roads, bridges that have collapsed and water systems that are failing. Ambulance services and police are reporting staff shortages which could hinder their ability to respond quickly to emergencies. As they struggle to survive the pandemic, hospital leaders have been begging legislators to provide financial assistance. Mississippi’s house is not in order. Mississippians are in dire straits. They have been struggling. These realities seem to have been overlooked by Republican leaders at the Capitol. Philip Gunn, Speaker of the House, is putting forth every bit of political capital to repeal the Mississippi personal income tax. This tax accounts for approximately one-third the state’s general revenue and funds basic government services such as the ones mentioned above. Lt. Governor. Lt. Gov. Delbert Hosemann responded with a lower income tax cut but one that many feel also threatens the state’s ability to finance basic public services. Gunn recently stated that “We have done all.” We have all the government’s funding. We have surplus money. Let’s return it.” READ MORE: Mississippi has more money now than ever before in the ongoing income tax cut battle between Senate and House leaders. The state’s revenue is on the rise due to federal stimulus dollars, which have been funneled into the state to both individuals and the government. Many see this moment as a unique opportunity to solve some long-standing systemic issues facing the state. Others call it once in their lifetime. Although the Beau Rivage isn’t their floor, Republican leaders look ready to make the biggest bet of all time. They are pointing out projections that only use the best estimates of economists to sell their income tax cuts proposals. These projections can be very inaccurate because they are only guesses. (This fiscal year, revenue collection will likely be around $1 billion below last year’s “best guess.”) The wager Republicans are making is that Mississippians will use the income tax money that they “save” in other ways and that other tax collections would rise. There is no way to be sure if this bet will pay off. If they are correct, Mississippi’s state government will be funded. If they are wrong, the government budgets of Mississippi will be cut to balance the state budget. Mississippians will also lose access to basic government services they don’t get enough of. As legislators navigate the next few weeks, everyone is wondering: Can Mississippi afford this tax cut? Ask teachers who have been long underappreciated by legislators and underpaid. Gunn and Hosemann have their own versions for a substantial teacher pay increase that will cost the state around $200 million per year. Education groups don’t think the pay increases, which are not inclusive of basic public education services, will be paid in perpetuity if the tax cut bet fails to pay off. Nancy Loome, a public education advocate group The Parents’ campaign, wrote that Mississippi does not have any excuse to stop fully funding public schools. She also suggested that teachers should be paid at the Southeastern average. This is before giving away state funds. “If Mississippi doesn’t have enough state funds to properly care for our children, teachers, and families, we certainly cannot afford a tax reduction,” Nancy Loome, of The Parents’ Campaign, wrote. She asked retirees who don’t pay income tax what they think of having to pay a higher tax on many of their spending. Ask Mississippians with lower incomes about the possibility of paying more taxes if Gunn’s plan is approved. “The tax cut proposal is like applying lipstick to a pig. It doesn’t matter how you style it, eliminating the income tax is bad news for Mississippi, especially for working families, communities, and retirees,” One Voice, an advocacy group, wrote in January. “The state’s surplus does not have the resources to make the necessary investments in public services Mississippians desire, such as quality schools, affordable healthcare, safe neighborhoods and affordable housing. It also doesn’t have the funds to support another tax cut that mainly benefits the state’s richest citizens. Ask leaders of Mississippi’s largest companies, who maintain that the income tax cuts will not increase their ability to attract and retain better workers. According to a report by the Mississippi Economic Council, “The Mississippi tax environment wasn’t high-profile nor even considered significantly as a priority.” MEC hosted 51 town-hall forums with community leaders and business leaders from across the state, as well as representatives from many sectors between July and September 2021 to compile this report. The issue of income tax was not even brought up at any meeting, until August. According to the report of the business council, “There was the possibility that (eliminating income tax) might drive up other costs and it could affect the state budget or households.” According to the Tax Foundation, a conservative think tank, Mississippians spent $614 per capita on income taxes in 2020. This is a substantial amount of money that nobody would refuse. What would Mississippians really get from spending extra money on services that aren’t provided by the government? Is this real relief? Teachers could get some additional money to purchase supplies for their classrooms and other teaching materials that aren’t covered by the state. Drivers could get a new set or tires to replace the roads in bad condition. This could help Mississippians who have higher water bills due to the need for costly repairs and higher medical bills. It could provide tuition money to help them get the skills they need, or money to pay for gas to travel long distances to find the job. In many cases, the income tax money that taxpayers would “save” would have to be used to plug holes that lawmakers left. Mississippians would have to spend money that they wouldn’t otherwise need because lawmakers didn’t do their jobs properly. As Republican leaders make best guesses to allay these fears, Mississippians will soon have to see their big bet unfold over the next few years. The stakes are certain to be high.