/To pay for roads, proposal would increase fuel tax, phase out a tax bracket

To pay for roads, proposal would increase fuel tax, phase out a tax bracket

This year, the House has passed several road funding bills. One of the ideas that Rep. Charles Busby (R-Pascagoula) floated at Wednesday’s Mississippi Economic Council Legislative Scrambler was a revenue bill. It would increase the state’s fuel taxes and eliminate the 4 per cent income tax bracket. The House Transportation Committee chair Busby stated that the bill would increase gasoline’s price by 3 cents per gallon for the next four years, and then index the tax (by linking it to the consumer price index). It would add 3 cents to every gallon diesel fuel for five years, then index it.” According to the Tax Foundation, Mississippi’s gas tax is 18.4 cents per gallons, which makes it the 46th-lowest in the country. Pennsylvania has the highest national gas tax at 58 cents per gallons. Busby stated that phasing out the 4 per cent income tax bracket would mean eliminating 1 percent every year for four years. Busby stated that the 4 percent income tax bracket generates approximately $150 million in revenue. He said that about 20 percent of the fuel in the state is sold outside the state. This would make the $150 million “tax-neutral”. The new program, however, could generate $180 million even without including diesel revenue. Busby stated that “I believe that the citizens of Mississippi support that program, so long as they can be sure that those funds will be used to improve our infrastructure.” This program will get us where we need to go together. It’s something I believe has the support and the solution of the speaker.” The program would also include an annual $300 fee for electric vehicles and a $150 annual fee for hybrid vehicles. This proposal could have legs in Senate. Lt. Gov. Tate Reeves is a staunch opponent of raising the gas tax, but has spoken out about his desire for more money to support infrastructure. He spoke about this earlier in the year about his desire that the 4 percent income bracket be eliminated. Reeves was the leader of an effort to eliminate the individual income brackets 3 and 4. However, only the elimination of 3 percent occurred. Reeves stated earlier this month that there would be a lot of interest in continuing to lower individual income taxes in the state. “I believe that having one tax bracket is more beneficial than having three,” Reeves said when asked about Busby’s plan. On Wednesday, Sen. Joey Fillingane (R-Sumrall) said that he would consider the proposal. Senator Willie Simmons (D-Cleveland), who chairs the transportation committee, said that the Senate would examine what the House sends them. However, Senate leadership is seriously considering an infrastructure package to bring the Legislature closer towards the suggested $375 million per annum investment by the Mississippi Economic Council. The Senate could use language from road funding bills already proposed by the House but he said that there are other options. Simmons stated that while Simmons could not give details, he said that a measure he was going to present will be meaningful in addressing the infrastructure and highway needs. The House passed an infrastructure bill in the first week of this year’s session that would take $108 million from state budget and redirect it to bridge and road funding throughout the state. The House passed House Bill 722, which allocates 35 percent of tax revenue to counties and cities for bridge and road repair. It was approved by the House within the second week. Busby stated that although it would be difficult to determine where the cash will come from in the general fund, this topic has received the most attention during his tenure as chairman of transportation. Busby stated, “I believe we have leadership that is willing to make a difference, and I believe the body has begun to recognize the dire state of our roads, bridges, and the need for urgent repairs.” Busby cited TRIP’s report, which was sponsored by insurance companies and other businesses involved in transportation engineering and construction. It stated that motorists can be charged up to $2,100 annually for poor infrastructure due to increased vehicle operating costs, congestion-related delays, and traffic accidents caused by insufficient roadway safety features. Simmons stated that $108 million in infrastructure and roads funding would still be a temporary solution. Simmons stated, “It would send a wrong message to the systems that we are solving the problem if it was a bandaid approach.” Simmons said, “It would send the wrong message to the system that we are fixing the problem if we do a band aid approach.” Contributing: Adam Ganucheau_x000D