Businesses Hope for Tax Breaks During Session

State officials are hoping some targeted tax cuts could help stimulate job growth in Mississippi, but there might not be the finances to make it happen. MPB’s Stephen Koranda reports.

The falling economy is hitting Mississippi businesses hard. Mark Smith is president and CEO of the CPI Group. The Columbus-based company manages staffing and human resources, but times are growing tough.

“Our business as a whole is down probably 25 percent,” said Smith. “I know of some other competitors that are down quite a bit more than that.”

Smith hopes focusing on some key areas will help them weather the storm.

“Basically healthcare and government are growing and that’s about it. Fortunately for us, we have focused on government contracts and will continue to,” Smith said.

Some types of businesses are getting hit by the downturn and by taxes, says Lt. Governor Phil Bryant. He’d like to reduce or eliminate the state’s inventory tax, to help Mississippi businesses and attract new companies to the state.

“It’s difficult for us to go out and say we want to bring companies in, and say ‘but we’re going to tax you, not only for the goods that you buy, but for those that you store,’” said Bryant.

There is a catch to reducing the inventory tax, it’s one of the main funding sources for local governments. Mississippi Economic Council Chairman Anthony Topazi says those governments can’t lose that funding.

“We have to think about other ways to rebate the inventory tax,” said Topazi. “Maybe this isn’t the year to do it, but we can put in place a plan so when the state is financially more healthy, inventory taxes can be reduced and eliminated.”

Even if businesses can’t get all the tax breaks they’d like because of tight finances, there are still ways to improve the workforce and make Mississippi more attractive to business. Topazi would like to see education improve.

“Anything we can do to help ourselves in the arena of education is money in our pockets down the road,” said Topazi.

New sources of revenue could help make funding for things like education a possibility. Some house members, like George Flaggs of Vicksburg, are now open to the idea of putting revenue from a cigarette tax into the general fund, instead of earmarking it for a program like Medicaid.

“I think it’s going to minimize the impact on all the budgets, and all the agencies in the state,” said Flaggs.

The financial outlook for state government continues to get worse. Yesterday Governor Haley Barbour said the total deficit could range from 175 to more than 300 million dollars.