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Governor Tate Reeves’ Proposed Tax Cuts:
Good for Mississippi?

Mac Gordon

Donuts on Cake

The late Mississippi Gov. Kirk Fordice delighted in saying that his photograph accompanied the definition of “tax cut” in dictionaries, as in tax-cutter supremo.

Current Gov. Tate Reeves is apparently trying to steal a chapter from Fordice’s playbook with additional tax reductions, despite a bunch already entrenched in the ongoing state budget.

I’ve looked to see Reeves’ smiling face in Merriam-Webster. It’s not there (Fordice’s grin is also missing), but the second-term governor definitely wants some new tax-cut slices to feed his conservative appetite.

In his executive budget wish-list —- something lawmakers traditionally ignore —- Reeves said this:

“Mississippi continues to be in the best fiscal and financial shape in our state’s history. Over the last several years, we’ve collected billions in excess revenue compared to initial estimates. Last (legislative) session, I was proud to sign into law the largest tax cut since Mississippi became a state in 1817, returning over half a billion dollars to its rightful owners–taxpayers.

“...It is clear that there is more work to be done. That is why I am once again proposing that Mississippi eliminate its income tax by reducing it immediately to 4% on all taxable earned income and by an additional 1% each year over the next four years.”

Reeves’ intent to continue reducing taxes was among the hot topics facing the Legislature when it convened Jan. 2. Reeves is likely to draw major support on his tax-cut plan from new House Speaker Jason White, R-West, despite income taxes annually accounting for one-third of the nearly $7 billion worth of general fund revenue in the state budget.

Another searing topic is expansion of Medicaid, the federal-state healthcare program for children, the aged, disabled and some pregnant women. Reeves obviously has no intention of going there, evidenced by his unwillingness to expand during his first term.

Considering the vast media attention on his reluctance toward expansion, surely most Mississippians realize that enlarging Medicaid would bring so many additional federal dollar bills into state coffers that High Street (the Capitol’s location) would turn the color of money-green.

That additional revenue, estimated at $5 billion over four years, would give an estimated 200,000 low-income Mississippi families a new lease on life through the Medicaid program. It also would provide a dozen or so financially-strapped hospitals in the state the promise of better days ahead.

Medicaid expansion went into effect in 2014 under the Affordable Care Act. To date, the 10 states rejecting full expansion include Mississippi, Alabama, Florida, Georgia, Kansas, South Carolina, Tennessee, Texas, Wisconsin and Wyoming.

But, unless someone close to Reeves convinces the governor to join the 40 others who have accepted Medicaid expansion, it’s moot for now.

During Fordice’s two terms as governor from 1992-2000, the Vicksburg contractor was most proud of the Legislature’s elimination of the capital-gains tax for companies based in the state. He also successfully cut taxes for married couples.

Debunking race-related issues that frequently arise, Fordice once said, “The only race that we’re concerned with is … the race for lower taxes.” His veto of a bill raising sales taxes by 1% for public education purposes was narrowly overturned by progressive lawmakers.

Reeves in November rejected a plan presented to him during legislative budget hearings that included an increase of nearly $120 million in state revenues for fiscal 2024. He believed the projected revenue increase would hurt his chances of reducing the state income tax.

These various financial squabbles – revenue estimates, tax cuts, Medicaid expansion and others – will play out soon at the Capitol and determine whether Reeves’ picture is destined for the dictionary, at least ephemerally in his own mind.

Donuts on Cake
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