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Proposal: eliminate income tax, add 5% tax on gas, allow cities, counties to levy local sales tax

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mississippitoday.org – Taylor Vance – 2025-01-13 12:30:00

House leaders on Friday unveiled a sweeping tax cut proposal that would eventually abolish the state income tax, slash taxes on groceries, increase local sales taxes and shore up funds for state and local road work.

The plan would over time take more than $1 billion from current revenue.

“We will Build Up Mississippi by eliminating the income tax to further our state’s competitive advantage and award our workforce,” House Speaker Jason White wrote on social media. “We will build up Mississippi by cutting the grocery tax in half to boost the pocketbook of Mississippians.” 

Long a priority for House Republican leaders, the legislation would reduce the income tax rate from 4% to 3% this year. Then, it would reduce the rate by .3% each additional year until the tax is eliminated in 10 years. 

The plan also trims the 7% sales tax on groceries to 2.5% over time. Under current law, Mississippi’s 7% sales tax is split between the state and municipalities where the tax is collected. To shore up the loss, the legislation would end the state’s 18.5% sales tax diversion to municipalities, meaning the full sales tax collected will go to the state budget. 

To make municipalities whole, the bill adds a general 1.5% local sales tax for both municipalities and counties that the local governments can vote to opt out of. 

The legislation also adds a new 5% tax on gasoline sales, which would go toward the Mississippi Department of Transportation’s budget for road and bridge infrastructure. The tax is expected to generate $400 million a year. Currently, Mississippi has an 18.4 cents-a-gallon flat tax on gasoline — a flat rate no matter the cost of a gallon. Transportation leaders have for years said they need an indexed tax that would rise with the cost of gasoline in order to generate enough money to keep up road maintenance.

The office of the State Economist recently published a report analyzing Mississippi’s tax structure, though it didn’t specifically look at the House’s latest tax cut proposal. 

It noted that Income taxes are subject to more fluctuation in the economy, but they have more potential for growth. Sales taxes, according to the report, are more stable because they’re directly linked to consumer spending, but they have only limited potential for growth. 

The report concluded that Mississippi is transitioning to a more consumption-based tax structure. The report noted that consumption-based taxes primarily impact low-income earners the most because poorer people spend more of their overall income on goods and services. 

As an example, the report illustrated that one person who makes $5,000  and another person who makes $10,000 spend $1,000 on goods that are subject to the same sales tax. Both of these individuals will pay $70 in taxes. 

“In this example, the first individual pays an average of 1.4% of his or her income in sales taxes, while the second individual pays an average of 0.7% of his or her income in sales taxes—thus meeting the definition of a regressive tax,” the report reads. 

The bill will first go toward the House Ways and Means Committee for consideration, which is led by Republican Rep. Trey Lamar of Senatobia. Lamar, its primary author. Lamar, a champion of income tax elimination, wrote on social media that the tax cut bill was one of “the most transformational pieces of legislation” the state has ever seen. 

Lamar had not scheduled a committee meeting, but Speaker White has said the House would consider the bill early on in the 2025 session. 

Robert Johnson III, the House Democratic leader, said he is keeping an open mind about the legislation and still reading over it, but he believes Mississippi still has a lot of needs that government leaders need to address with tax revenue.

“I know I have needs in my district that have yet to be met that the state hasn’t answered or said we don’t have the money for,” Johnson said. 

If the bill passes the full House, it would likely head to the Senate Finance Committee for consideration, which is led by Republican Sen. Josh Harkins of Flowood. 

Harkins told Mississippi Today that he had not yet reviewed the House’s tax cut package and had no response to it. He also plans to advance a Senate tax cut package out of his committee in the coming weeks. 

If the Legislature compromises on a tax cut plan, it would head to Republican Gov. Tate Reeves for consideration. It’s unclear if the governor supports the House’s latest tax cut proposal. 

Reeves at a Wednesday press conference reiterated that his main priority is eliminating the income tax, but he is generally supportive of all tax cuts.

However, the governor said he does not support tax cut plans that increase another type of tax and has in the past opposed any “tax swaps.” 

While the House’s latest plan is an overall net tax reduction, it still adds a new local sales tax and adds a new 5% tax on gasoline. Reeves on Monday morning thanked White and Lamar for wanting to eliminate the income tax, but only said their latest plan was “serious.”

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

Mississippi Stories Videos

Mississippi Stories: Chris Lockhart of Capital City Kayaks

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mississippitoday.org – Marshall Ramsey – 2025-01-14 11:39:00

In this episode of Mississippi Stories, Mississippi Today Editor-at-Large Marshall Ramsey took a tour of one of the best kept secrets in Jackson with Chris Lockhart of Capital City Kayaks. What started as a hobby to explore the green side of the capital city has turned into a family-fun spot for tourists and Jacksonians alike.

For more videos, subscribe to Mississippi Today’s YouTube channel.


This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

The post Mississippi Stories: Chris Lockhart of Capital City Kayaks appeared first on Mississippi Today.

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Mississippi Today

Lawmakers must pass new legislation to improve access to prenatal care

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mississippitoday.org – Sophia Paffenroth – 2025-01-14 10:27:00

Lawmakers will file another bill this session to help low-income pregnant women get into the doctor earlier – after the federal government rejected the program set up under last year’s law. 

The implementation of the program has been delayed for months as a result of the discrepancy between what was written into state law and federal regulations for pregnancy presumptive eligibility.

Rep. Missy McGee, R-Hattiesburg, told Mississippi Today she will file a bill before next week’s deadline.

“It’s a priority to get pregnant women into the doctor as early as possible,” said McGee, who authored last year’s bill and chairs the House Medicaid committee. “The goal is the same, the priority for us is the same.”

House Medicaid Committee Chairwoman Missy McGee, R-Hattiesburg, said the passing of legislation that would extend postpartum Medicaid coverage from two months to a year, by the committee is “the right thing for women and babies in Mississippi,” Tuesday, Feb. 28, 2023, at the Mississippi Capitol in Jackson. (AP Photo/Rogelio V. Solis)

The problem with the 2024 legislation is that it included a proof of income requirement – meaning patients would need to bring paystubs into the doctor’s office – which the Centers for Medicare and Medicaid Services, the federal agency responsible for approving the state plan, does not allow. Although the law is intended for low-income individuals, the federal government maintains that vocal testimony should suffice. 

Federal guidelines state that while the agency may require proof of citizenship or residency, it should not “require verification of the conditions for presumptive eligibility” – which are pregnancy and income. 

McGee said she will be taking out the proof of income requirement. The proof of pregnancy requirement is null, she said, since doctors would be able to see pregnancy during the first visit. 

The law presumes certain low-income pregnant women as eligible for Medicaid, and allows them to receive treatment right away at no cost to them while their official Medicaid application is pending. This interim coverage only lasts 60 days, at which point the Division of Medicaid will typically have approved or denied their application, according to average application processing times. 

The policy will cost roughly $567,000 and could cut down on the number of premature infants who end up in the intensive care unit, where the state might pay up to $1 million caring for a single baby. Mississippi has the nation’s highest rate of preterm birth, which adequate prenatal care has been proven to mitigate

Advocates argue that the mandatory documentation is just another burden on pregnant women already facing socioeconomic barriers to health care. 

Officials with the Mississippi Division of Medicaid said several times throughout the summer and fall that they were in negotiations with the federal government to work out the problem with state law.

Matt Westerfield, spokesperson for the Division of Medicaid, confirmed that the agency could not work out with the federal government the proof of income requirement state lawmakers wrote into the law. 

McGee said the easiest solution is to draft new legislation. She is hopeful that the policy will garner the same overwhelming support this year that it had from lawmakers in both chambers last year. 

“We do not believe that the changes do any harm to our objective, so we are willing to make these changes,” McGee said. “And really, I think it’s been helpful for the Division of Medicaid to have these in-depth conversations [with CMS] so we have a better idea of what CMS is looking for.”

The House passed the law 117-5 last year, and the Senate passed it 52-4. 

The deadline to file bills is Jan. 20. McGee says she hopes to push the bill through the Legislature early on this year – as she did last year. In 2024, it was sent to the governor less than halfway through the session. 

Thirteen providers were approved to participate in the policy in 2024, including the University of Mississippi Medical Center – the state’s largest Medicaid provider.

In addition to negotiating with CMS and accepting provider applications, the Division of Medicaid also conducted several provider training sessions throughout the fall.

Westerfield was not able to comment on whether the approved providers would be automatically enrolled in 2025 or whether they would need to reapply. He also declined to comment on whether the implementation process would be streamlined the second time around. 

Other than minor changes to income verification, everything in this year’s bill will stay the same as last year. 

An expectant mother would need to fall under the following income levels to qualify for presumptive eligibility in 2025:

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Mississippi Today

On this day in 1963

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mississippitoday.org – Jerry Mitchell – 2025-01-14 07:00:00

Jan. 14, 1963 

On the same portico of the Alabama Capitol in Montgomery where Jefferson Davis was sworn in as president of the Confederacy, Alabama Gov. George Wallace delivered his inaugural address, telling the crowd, “In the name of the greatest people that have ever trod this earth, I draw the line in the dust and toss the gauntlet before the feet of tyranny, and I say segregation now, segregation tomorrow, segregation forever!” 

Asa Carter, a member of the Ku Klux Klan, wrote his speech, which made national headlines and thrust Wallace into the national spotlight. 

Seven months later, Martin Luther King Jr. responded to that speech, saying, “I have a dream that one day, down in Alabama, with its vicious racists, with its governor having his lips dripping with the words of ‘interposition’ and ‘nullification’ — one day right there in Alabama little black boys and black girls will be able to join hands with little white boys and white girls as sisters and brothers.” 

Before his death, Wallace called his most famous phrase “his biggest mistake.”

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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