Senate passes its income tax cut plan

by Taylor Vance, Mississippi Today
February 24, 2025

The Senate voted Monday evening to pass a tax cut that reduces the state income tax and the sales tax on groceries while raising the gasoline tax, setting up negotiations with the House.

The measure passed the GOP-majority Senate 34-15, with four Democrats supporting it and four Republicans opposing it. It now heads to the House, whose leadership is advocating for its own plan, which would eventually eliminate the state individual income tax.

The Senate plan amounts to a net tax cut of $326 million, a more modest sum than the $1.1 billion net cut passed by the House. The Senate would reduce the state’s flat 4% income tax to 2.99% over four years, while the House would eliminate the income tax over more than a decade.

Senate Finance Chairman Josh Harkins, a Republican from Flowood, told reporters that the legislation was a responsible way to cut taxes while slightly increasing the gasoline tax to provide more revenue for infrastructure funding. 

“I think we’ve put forward a really good plan that helps families at the grocery store by lowering the sales tax on groceries,” Harkins said. “And it provides incentives and rewards work.” 

The Senate plan would reduce the state’s 7% sales tax on grocery items, the highest in the nation, to 5% starting July 2025. Municipalities receive a portion of grocery tax revenue, and the Senate plan would make cities whole. 

The Senate bill would raise the state’s 18.4-cents-a-gallon gasoline excise by three cents yearly over the next three years, eventually resulting in a 27.4 cents-per-gallon gas tax at completion. This is an effort to help the Mississippi Department of Transportation with a long-running shortfall of highway maintenance money.

Most of the chamber’s Democratic members opposed the plan over fears that the state could not afford to wipe out around half a billion dollars each year from its budget and still address some of the state’s critical issues such as public education and health care. 

“That’s a lot of money, and we need that money for basic infrastructure,” Democratic Sen. Hob Bryan of Amory said. “Everyone benefits from infrastructure.”

Some Democratic members attempted to amend the bill to eliminate the grocery tax or change the tax structure to avoid increasing the gas tax. But the GOP-majority chamber on party-line votes defeated the amendments. 

Four Republican senators voted against the final measure because it raised the gasoline tax, something they viewed as going against the GOP’s core ideology. 

Sen. Angela Burks Hill, a Republican from Picayune, told reporters the gas tax increase would hurt rural people the most because they have to drive further for work and to purchase groceries. 

“I’m just trying to follow my party’s platform of low taxes,” Hill said. 

Now that both chambers at the Capitol have passed separate tax proposals, the key question will be how much legislative leaders can compromise on a final package. House Speaker Jason White, a Republican from West, and Republican Gov. Tate Reeves have said abolishing the income tax is their primary goal this session. 

White previously told Mississippi Today that he’s willing to compromise with the Senate, but he wants a final tax cut that’s substantive and meaningful. 

“We’re not interested in a small piece of a tax cut while not addressing other issues,” White said. 

Reeves has thrown cold water on the Senate’s proposal because it doesn’t entirely eliminate the income tax. If lawmakers can’t agree on a proposal, he could call them into a special session to address taxes. 

Harkins, though, said he hopes lawmakers can “build consensus” on a final package during the regular session. House and Senate leaders will likely debate the measure for the next month. The deadline for lawmakers to approve tax and appropriations bills is March 31. 

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

Feb. 24, 1956

U.S. Sen. Harry F. Byrd Sr. coined the term “Massive Resistance” to unite white leaders in Virginia in their campaign to preserve segregation. The policy appealed to white Virginians’ racial views, their fears and their disdain for federal “intrusion” into the “Southern way of life.” 

Virginia passed laws to deny state funds to any integrated school and created tuition grants for students who refused to attend these schools. Other states copied its approach. 

When courts ordered desegregation in several schools in Charlottesville and Norfolk, Virginia Gov. James Lindsay Almond Jr. ordered those schools closed. When Almond continued that defiance, 29 of the state’s leading businessmen told him in December 1958 that the crisis was adversely affecting Virginia’s economy. Two months later, the governor proposed a measure to repeal the closure laws and permit desegregation. 

On Feb. 2, 1959, 17 Black students in Norfolk and four in Arlington County peacefully enrolled in what had been all-white schools.

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

An illness is spreading through the Mississippi Capitol: special session fever.

Speculation is rampant that Gov. Tate Reeves will call a special session if the Senate does not acquiesce to his and the House leadership’s wishes to eliminate the state personal income tax.

Reeves and House leaders are fond of claiming that the about 30% of general fund revenue lost by eliminating the income tax can be offset by growth in other state tax revenue.

House leaders can produce fancy charts showing that the average annual 3% growth rate in state revenue collections can more than offset the revenue lost from a phase out of the income tax.

What is lost in the fancy charts is that the historical 3% growth rate in state revenue includes growth in the personal income tax, which is the second largest source of state revenue. Any growth rate will entail much less revenue if it does not include a 3% growth in the income tax, which would be eliminated if the governor and House leaders have their way. This is important because historically speaking, as state revenue grows so does the cost of providing services, from pay to state employees, to health care costs, to transportation costs, to utility costs and so on.

This does not even include the fact that historically speaking, many state entities providing services have been underfunded by the Legislature, ranging from education to health care, to law enforcement, to transportation. Again, the list goes on and on.

And don’t forget a looming $25 billion shortfall in the state’s Public Employee Retirement System that could create chaos at some point.

But should the Senate not agree to the elimination of the income tax and Reeves calls a special session, there will be tremendous pressure on the Senate leadership, particularly Lt. Gov. Delbert Hosemann, the chamber’s presiding officer.

Generally speaking, a special session will provide more advantages for the eliminate-the-income-tax crowd.

First off, it will be two against one. When the governor and one chamber of the Legislature are on the same page, it is often more difficult for the other chamber to prevail.

The Mississippi Constitution gives the governor sole authority to call a special session and set an agenda. But the Legislature does have discretion in how that agenda is carried out.

And the Legislature always has the option to do nothing during the special session. Simply adjourn and go home is an option.

But the state constitution also says if one chamber is in session, the other house cannot remain out of session for more than three days.

In other words, theoretically, the House and governor working together could keep the Senate in session all year.

In theory, senators could say they are not going to yield to the governor’s wishes and adjourn the special session. But if the House remained in session, the Senate would have to come back in three days. The Senate could then adjourn again, but be forced to come back if the House stubbornly remained in session.

The process could continue all year.

But in the real world, there does not appear to be a mechanism — constitutionally speaking — to force the Senate to come back. The Mississippi Constitution does say members can be “compelled” to attend a session in order to have a quorum, but many experts say that language would not be relevant to make an entire chamber return to session after members had voted to adjourn.

In the past, one chamber has failed to return to the Capitol and suffered no consequences after the other remained in session for more than three days.

As a side note, the Mississippi Constitution does give the governor the authority to end a special session should the two chambers not agree on adjournment. In the early 2000s, then-Gov. Ronnie Musgrove ended a special session when the House and Senate could not agree on a plan to redraw the state’s U.S. House districts to adhere to population shifts found by the U.S. Census.

But would Reeves want to end the special session without approval of his cherished income tax elimination plan?

Probably not.

In 2002 there famously was an 82-day special session to consider proposals to provide businesses more protection from lawsuits. No effort was made to adjourn that session. It just dragged on until the House finally agreed to a significant portion of the Senate plan to provide more lawsuit protection.

In 1969, a special session lasted most of the summer when the Legislature finally agreed to a proposal of then-Gov. John Bell Williams to opt into the federal Medicaid program.

In both those instances, those wanting something passed — Medicaid in the 1960s and lawsuit protections in the 2000s — finally prevailed.

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