A House committee passed a major tax cut plan on Tuesday evening that would eventually abolish the state income tax, reduce taxes on groceries, increase local sales taxes and provide more money for road work.

The plan would over time cut about $1.1 billion from the state’s current revenue. Proponents say economic growth will cover this, and not result in major cuts to government services or spending.

“This is one of the most transformational pieces of legislation that this state has ever seen,” House Ways and Means Chairman Trey Lamar said in the committee meeting. 

The legislation passed the GOP-majority House committee with no audible opposition, though Rep. Robert Johnson III, the House Democratic leader, raised concerns that the state’s budget may not collect enough revenues in the future to offset the tax cut.  

The legislation would reduce the income tax rate from 4% to 3% next 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 tax collected by the counties would go toward local road maintenance.

Oxford Mayor Robyn Tannehill, an independent, attended Tuesday’s Ways and Means meeting and told Mississippi Today she supports the local 1.5% local sales tax because it means additional revenue for municipalities in the state. 

“I’m supportive of any bill that increases revenues for Oxford, Mississippi,” Tannehill said. 

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.

Using the current average gasoline price in Mississippi of $2.62 a gallon, the proposed new tax would cost consumers 13 more cents a gallon.

Lamar, a Republican from Senatobia, said he intends to bring the bill up for a full House vote this week, and it’s expected to pass the 122 member chamber. But the legislation is several steps away from becoming law. 

Once the legislation passes the House, it would likely head to the Senate Finance Committee, which is led by Republican Sen. Josh Harkins of Flowood, for consideration. Harkins has not yet responded to the House’s legislation, but he previously told Mississippi Today the Senate will unveil its own tax cut package in the coming weeks. 

If the House and Senate agree on a tax cut measure, it would head to Republican Gov. Tate Reeves’ desk for consideration. Reeves has been a vocal champion of eliminating the income tax, but it’s unclear if he would support all of the House’s latest tax cut measure. 

Lamar on Tuesday night told reporters that he had spoken with Reeves’ office, and he believes the governor will offer his support to the legislation. The governor’s office did not respond to questions about his stance on Lamar’s legislation. 

Reeves in past years has opposed what he called “tax swaps,” tax cut proposals that sought to decrease the overall tax burden, yet raised another type of tax such as the latest House proposal. He’s also opposed past efforts to raise the gasoline tax. 

“If a bill comes to my desk that doesn’t raise any other taxes that cuts the grocery tax and cuts the income tax, I’m fine with that,” Reeves said last week at a press conference. 

Reeves, in 2021 notably opposed an effort led by Lamar and former House Speaker Philip Gunn that sought to eliminate the income tax and cut the sales tax on groceries in half while increasing the sales tax on other items by 2.5 cents on the dollar. 

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

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.

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.”

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.