JACKSON, MS. – by Bobby Harrison The co-chairs of the Mississippi State Legislature have formed special committees to achieve their goal of passing further tax cuts during the 2025 legislative session.

On Tuesday, House Speaker Jason White, who formed a special tax cut study commission earlier this year, announced a day-long policy summit on tax cuts for Sept. 24. Also on Tuesday, Lieutenant Governor Delbert Hosemann, who presides over the Senate, announced he had formed a special commission to study the state’s fiscal policy.

The committee is led by the chairmen of the two Senate Finance Committees: Chairman of the Senate Budget Committee Briggs Hopson and Chairman of the Finance Committee Josh Harkins.

“Our primary goal is always to reduce the tax burden and ensure that taxpayers’ money stays in their pockets,” Hosemann said in a press release. “To do this, budget and finance chiefs must sit at the table and review all revenues and expenditures to ensure that we are as efficient as possible while fully funding necessary services.”

Both Governor Tate Reeve and White spoke in favor of eliminating the state income tax, which accounts for about 30 percent of the state’s general fund revenue. White also spoke in favor of reducing the state’s food tax.

Hosemann at least spoke out in favor of reducing the current 7% food tax, the highest nationwide tax on food in the United States.

Hosemann said that when considering tax cuts, ensuring the financial integrity of the state should not be ignored.

The income tax brings in about $2 billion annually, while the grocery tax is estimated to bring in about $325 million annually based on a 2019 study. However, due to significant increases in food prices, the grocery tax would bring in much more now than it did in 2019. Because the 7 percent sales tax is levied on the cost of food, state economist Corey Miller has explained that inflation has given the state significantly more grocery tax revenue in recent years.

In 2022, lawmakers passed a $525 million income tax cut, which Reeves signed into law. It is currently being implemented. After full implementation in 2026, income in Mississippi will be taxed at a 4% rate.

In addition, a corporate tax cut passed in 2016 is still being phased in, with annual cuts of $42 million planned through 2029.

Calls for further tax cuts have intensified largely because tax revenues have increased at unprecedented rates in recent years. Most states have experienced similar growth, thanks largely to the large influx of federal funds provided to states, primarily to deal with the COVID-19 pandemic. In addition, revenue growth has been aided by Mississippi’s reliance on sales tax for revenue. As prices of retail items have risen during the inflationary period, this has resulted in the 7% sales tax being imposed on more expensive items, generating more revenue for the state.

Nevertheless, revenues have declined over the past year. In the last fiscal year, which ended June 30, the state took in only $18.4 million, or 0.24 percent more than the previous year.

And if the state had not collected $68.7 million, or 84.4 percent, more in interest revenue than the previous fiscal year, it would be in the rare situation of collecting less revenue than the previous fiscal year for only the sixth time since 1970. Higher interest rates have led to higher revenue from the unprecedented surpluses the state currently enjoys.

White’s tax summit at the Sheraton Refuge in Flowood will feature several speakers, including Governor Reeves, state leaders, other state officials and Arkansas legislators who have pushed for tax cuts in the neighboring state. National tax cut advocate Grover Norquest is also scheduled to speak.

“It is exciting to convene this policy summit, which is free to the public, to encourage participation from all interested parties so that legislators, tax professionals and all Mississippians can participate in a rich dialogue that will lead to a better, brighter Mississippi,” White said in a press release.

Other members of the Hosemann Study Group include Senators Andy Berry, Bradford Blackmon, Rod Hickman, Chris Johnson, Dean Kirby, John Polk, Derrick Simmons and Daniel Sparks.

This article was first published by Mississippi Today. We republish it here under a Creative Commons license.

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