Republican Mississippi Gov. Tate Reeves took to the podium Wednesday at the capitol building in Jackson for his State of the State speech, using the opportunity to tout achievements seen during his tenure and call on legislators to eliminate personal income tax.
Reeves mentioned an array of topics such as a record $32 billion in private sector investment since he was sworn in as governor five years ago and said Mississippi “has never been stronger than she is at this moment.” He reminded onlookers that the state has seen strides in education such as higher graduation rates, lower dropout rates, and improved reading scores.
But one topic that was expected to be zeroed in on as it remains on the forefront of minds both inside and outside the capitol is tax reform.
“The single best thing we can do for our state and her people is to eliminate our state’s income tax,” Reeves said. “This money doesn’t belong to the government. It belongs to the hardworking Mississippians who earned it.”
Reeves calling for the complete elimination of income tax is nothing new. He has used social media, interviews, and speaking appearances as of recent to commend the House of Representatives for passing a plan earlier this month that would phase out income tax in just over a decade’s time while cutting the nation’s highest grocery tax.
The Senate, on the other hand, has been slow to roll out its promised tax reform plan with some voicing concerns over a loss of revenue if income tax is eradicated. Endorsing the House’s plan while commending Speaker Jason White and Rep. Trey Lamar for their work on the bill, Reeves urged senators to work with their cross-chamber colleagues and find a way to make Mississippi move forward without a tax on work.
“If there’s something in the bill you don’t like, let’s talk about it,” Reeves said. “But if we truly share the same goal, let’s figure it out together. Here I am reminded of what my friend and former Jackson State head football coach [Deion Sanders] loves to say: ‘I ain’t hard to find.’”
In the Democratic response to the governor’s speech, Sen. David Blount, of Jackson, criticized the prospect of eliminating income tax. He said Republicans have failed to fully realize that federal funds stemming from the COVID-19 pandemic are the reason Mississippi is in financial shape, and without income tax, the state cannot operate on all cylinders.
“We believe this is irresponsible. The income tax pays for one-third of the state’s general fund budget,” Blount said. “We all know that our state’s economy – like the economies of every state – have seen an unprecedented windfall of federal money in recent years. This was during COVID-19 and the Biden administration. That money’s gone and it’s not coming back.”
Reeves promised more dollars coming into Mississippi from future avenues such as further economic development and the energy sector would help make up for a loss in revenue if income tax is eliminated. The House plan would also raise the sales tax on non-grocery items from 7 percent to 8.5 percent while levying a 5 percent tax on gasoline.
“We always need more dollars flowing through Mississippi. We always need more action in the state of Mississippi. We know how to make that happen,” Reeves said. “Today, I want to issue a challenge and make a promise that will result in more winning than Mississippi has ever dared to dream. We must be a leader in American energy.”
Referring to power as the “key to prosperity,” Reeves said officials are already working to bring more nuclear, solar, and wind energy to the state’s grid while trying to place emphasis on the natural gas sector. According to him, economic development and the ability to provide power are married in concept.
“When private sector companies learn they can trust that we can provide the power to manufacture, smelt, and compute, their eyes light up and their wallets open up,” he said.
Another topic, one that Reeves ignored during his State of the State speech a year ago, brought up Wednesday was his belief that Mississippi should not join 40 other states in extending Medicaid benefits to hundreds of thousands more residents.
With uncertainty on the federal level as to what Republican President Donald Trump may do with his healthcare agenda, state lawmakers are hesitant to pass legislation this session expanding Medicaid. Reeves took concerns a step further and opined that those that have chosen to expand government-provided health insurance to new groups might have to spend more in the future to continue doing so.
“We now have an administration in Washington that is dead set on reducing spending and getting us closer to a balanced budget,” he said. “Medicaid changes, for example, are coming. What they will be, we do not yet know. But there is a large possibility that those changes will result in a greater spend by states who have enacted this type of welfare expansion.”
Blount disagreed. The Democratic senator contended that Mississippi is still in the midst of a healthcare crisis and Medicaid expansion is a route to solving it. He vouched expansion will pay for itself through what could be billions in federal dollars while saving shuttering hospitals and increasing access to healthcare.
“Medicaid expansion is still the most important issue facing our state,” Blount said. “This new money will have a major, positive economic impact. In fact, the state economist reports that it will more than pay for the cost of expansion and create jobs in healthcare, especially in rural areas. Just as important, Medicaid expansion provides health insurance to more Mississippians who go to work every day and are one medical emergency away from bankruptcy.”
Blount used the rest of his response to call for a raise in teacher pay while discouraging school choice, urge legislators to restore the ballot initiative process, shore up the public employees’ retirement system, and find ways to prevent governmental corruption. Reeves, at times in his speech, promoted school choice and called for an overhaul in how school districts are graded, “despite this amazing trajectory we find ourselves on.”
