“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 does not belong to the government; it belongs to the hard working Mississippians who earn it.”
Eliminating the state’s income tax has long been a priority of Reeves, and the House’s passage of the “Build Up Mississippi Act” last week is the furthest such a proposal has gotten in the legislative process. Reeves called on the Senate to send the bill to his desk.
“Doing nothing is not an option,” Reeves said. “Let’s get this done.”
Senate leaders have not revealed their tax cut plan yet, but it is expected to be much more modest in scope than the House bill, which would reduce state revenues by $1.1 billion per year when fully enacted.
Mississippi's income tax currently provides around one-third of the state's general fund, and Lt. Gov. Delbert Hosemann, the leader of the Senate, has said a more methodical approach to further income tax cuts is needed to protect the delivery of core government services.
Potential federal spending cuts under the Trump Administration are also a concern of lawmakers wary of eliminating the income tax.
“For a state that receives $3 for every $1 we send to Washington, we could be most affected by cuts at the federal level,” Sen. Daniel Sparks, R-Belmont, said. … “We better make sure our house is in order.”
Reeves also cited potential reductions in federal funding while arguing against Medicaid expansion, disdainfully calling it "welfare expansion" as he has in the past.
“With all of the good things happening in Mississippi, especially when it comes to workforce development and economic development and job creation, now is not the time to expand welfare in our state,” Reeves said.
Medical and business leaders across Mississippi have argued expanding Medicaid would be a major boon for the state’s economy and low-income workers who cannot afford medical care. It's the top policy priority for legislative Democrats, who argue the policy is needed to create the healthy workforce Mississippi needs.
“You're talking about 9,000 new jobs, $1 billion in additional revenue, and that will have a ripple effect in the state's economy, the same way that a new factory coming into town might have a ripple effect,” Sen. John Horhn, D-Jackson, said.
The Medicaid committees of both legislative chambers advanced “dummy bills” on Wednesday that could be amended later to include proposals for expansion. Lawmakers have cited the uncertainty around Medicaid’s future under the Trump Administration as a reason neither chamber has put forth a proposal for expansion yet.
The Medicaid expansion bill passed by the House during the 2024 session included a provision to reverse course on the policy should the federal government reduce the 90% reimbursement rate for expansion costs.
Much of Reeves' address focused on his optimism for Mississippi’s future, with the governor citing the record levels of capital investment in the state and educational gains of 2024 as evidence the state is thriving under conservative leadership.
While celebrating a $10 billion investment by cloud computing giant Amazon Web Services in Madison County, Reeves said projects of that scale could become a standard for economic development in the state. To achieve that goal, Reeves said the state needs to maximize energy generation to attract power-hungry development projects, and teased future announcements on that front from his office.
“We must be a leader in American energy,” Reeves said. “We must be at the front of the pack in the race to have more power in today's world. Power is the key to prosperity. If we can be on the bleeding edge of energy technology, we can beat our peers and bring about more wealth and better lives for all Mississippians.”
Reeves also called for the overhaul of accountability standards for K-12 schools. The governor celebrated education gains made in recent years, but thinks the current accountability model places too much weight on growth and not enough on proficiency in key subject areas.
"We cannot keep doing the same old thing and expect to get new and improved results," Reeves said.
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