Mississippi has nearly two billion dollars from the federal government for coronavirus and infrastructure relief. But leadership in the Mississippi House of Representatives claim they will block spending of that funding if their tax plan is not adopted by Wednesday’s deadline. Reporters asked Governor Tate Reeves if he would call a special session of the legislature to allocate ARPA funds if the gridlock lasts throughout the session.
“I’m optimistic that we’re going to get a plan passed to ultimately eliminate the income tax, and I’m optimistic that we’re going to pass a spending plan for those American Rescue Plan dollars,” says Reeves. “And I’m going to make sure that we do it in a way that we set ourselves up for an economy that can grow gross domestic product significantly for many, many, many years to come.”
Opponents to eliminating the state income tax say the plan relies on one-time federal funding to justify this reduction in revenue. Authors for both the House and Senate plans claim their bill accounts for that loss in revenue. And if no bills are passed to reduce taxes in Mississippi, Reeves says he would consider a special session to eliminate the income tax.
Reeves says “You want to help people in Mississippi who are getting up and going to work every day and paying significantly more for a tank of gas? The best thing you can do to help them is not suspend the gas tax, but the best thing you can do is give them three or four thousand dollars a year that they don’t have to send into state government. That will help them deal with inflation much, much, much more than more governmental spending.”
Senate lawmakers say their plan would eliminate part of the state income tax, as well as reduce several additional taxes and offer a one-time rebate to residents.
ARPA funding is expected to be spent on projects such as water infrastructure, hospital staffing improvements, and rural broadband.
