AP: Mississippi House passes bill to phase out state income tax

From the Associated Press, “Mississippi House passes bill to phase out state income tax” by Emily Wagster Pettus

JACKSON, Miss. (AP) – The Mississippi House argued two hours Wednesday before passing an election-year proposal that could become one of the biggest tax cuts in state history if it becomes law – a plan to phase out the state’s personal income tax over the next 15 years if the economy grows.

The bill passed the Republican-led House 82-32, with several Democrats voting for the bill after they criticized it and tried to change it.

However, it’s unclear whether the bill, with a price tag of $1.7 billion, will survive the Senate.

Republican Lt. Gov. Tate Reeves, the Senate’s presiding officer, is pushing a separate bill that would phase out the business franchise tax and give a more modest reduction in the income tax. It’s projected to cost $382 million.

Supporters of House Bill 1629 say eliminating Mississippi’s income tax would stimulate economic growth. Mississippi has long been one of the poorest states in the nation, and opponents of the bill say it would further weaken the state’s ability to pay for education, transportation, health care and other government services.

“It would devastate our budget,” said Rep. Jim Evans, D-Jackson, who voted against the bill.

Rep. Mark Formby, R-Picayune, said eliminating the income tax over several years would reward people who work and pay for government.

“It’s not an overly aggressive plan at all,” Formby said.

The Senate on Tuesday passed Senate Bill 2839, Reeves’ proposal to phase out Mississippi’s business franchise tax over 10 years and reduce some income taxes.

The two chambers will exchange bills for more work. Legislators have until late March to set a budget and pass or kill tax proposals.

The House bill was filed Monday, just two days before the deadline for the House and Senate to act on the first round of tax and budget proposals during this three-month legislative session.

During Wednesday’s debate, Democratic Rep. Cecil Brown of Jackson peppered the Ways and Means Committee chairman, Republican Jeff Smith of Columbus, about whether Smith had held public hearings or consulted economic experts about the potential impact of eliminating the personal income tax. Smith said he had done neither. But Smith said letting people keep more of the money they earn could stimulate spending and boost the economy.

“Your numbers don’t work,” Brown told him.

Smith responded: “Gentleman, I told you I have not talked to economists.”

The personal income tax is one of the largest sources of revenue to pay for schools, prisons, mental health care and other state services, generating about a quarter of state tax revenue.

House Speaker Philip Gunn, R-Clinton, said the House plan would trim nearly $1.4 billion in taxes in steps through 2028, pausing in any year when state revenue doesn’t grow by at least 3 percent. However, that total is based on partial collections from the 2012 calendar year, according to the state Department of Revenue. The state is projected to collect more than $1.7 billion in personal income taxes this year.

Democrats on Wednesday offered 10 amendments that were all defeated, including one that would have reduced the 7 percent tax on groceries.

Tax bills require a three-fifths majority to pass, so at least 69 votes were needed Wednesday.

Sixty-five Republicans and 18 Democrats voted for the bill, and 32 Democrats 32 voted against it.

Two Democrats voted “present,” which did not count for or against the bill. Three Democrats did not vote. One Republican and one Democrat were absent.

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2015 Ballot Battle Over MAEP Set

With proponents obtaining enough signatures to place Initiative 42 on the 2015 Ballot, the State Legislature acted to create an alternative, HCR 9 or Initiative 42A, which the House and the Senate passed this week.

If approved by voters in November, Initiative 42 would change the Mississippi Constitution to read as follows (underlined and struck-through text indicates added or deleted language):

SECTION 201. To protect each child’s fundamental right to educational opportunity, The Legislature the State shall, by general law, provide for the establishment, maintenance and support of an adequate and efficient system of free public schools upon such conditions and limitations as the Legislature may provide. The chancery courts of this State shall have the power to enforce this section with appropriate injunctive relief.

Proponents say that this constitutional amendment will require fully funding K-12 education in Mississippi per the MAEP formula that was adopted in 1997 to determine funding. Opponents say that Initiative 42 strips the Legislature of control over education and places that control in the hands of the Chancery Court of Hinds County.

Initiative 42A would change the constitution as follows:

SECTION 201. The Legislature shall, by general law, provide for the establishment, maintenance and support of an effective system of free public schools.

Proponents of this alternative argue that this will keep control of education in the State Legislature and focus on results (i.e. the insertion of “an effective system”). Opponents say Initiative 42A only confuses voters and does not allow for a simple “up or down vote” on Initiative 42 by the people of Mississippi.

To pass, a proposal must win a majority and at least 40% of the total votes cast. With competing proposals, passage of either is more difficult. If voters are uneducated before going to the polls, the ballot could also be very confusing.

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Stands on education separate Cochran & McDaniel

If you think the two Republican candidates in the race for the U.S. Senate are similar, look no further than education for a difference.  As reported by Emily Wagster Pettus in the Clarion-Ledger, their viewpoints certainly diverge with respect to the role of the federal government in education.

Sen. Thad Cochran is dedicated to ensuring federal funding is available in Mississippi for education and even voted establish the U.S. Department of Education as a cabinet level agency in 1979.  Chris McDaniel asserts that the federal government should have no role in education since it is not identified as a role in the U.S. Constitution and that education is a responsibility best left to the states.

Federal spending, whether on education or other federal programs, clearly marks the divide between establishment and Tea Party Republicans.  The Tea Party promotes limited government, reducing the federal debt, lower taxes, and making hard decisions on cuts while accusing establishment Republicans for not being willing to cut anything.

NOTE:  Most often what is heralded in the news as a “budget cut” is not a real cut (i.e. a reduction in actual dollars) but a reduction in the rate of growth.

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NOTE: Post updated on April 24th, 2014.

Rep. Gipson: Unapolgetically conservative

Rep. Andy Gipson (R-Braxton) is an attorney and Baptist pastor.  And in her report in the Clarion-Ledger, Analysis: Gipson wields influence, Emily Wagster Pettus says he is one of the most influential lawmakers in the state.

As the chairman of the House Judiciary B Committee, he was influential in a number of bills including House Bill 585 (improve efficiency and costs of the state’s criminal justice system) and House Bill 1400 (banned abortion at 20 weeks).  He helped push through the Religious Freedom Restoration Act (Senate Bill 2681) in spite of all the opposition.

Gipson is a notably vocal opponent of gay rights since President Obama changed his stance on gay marriage in 2012.  He has remained a staunch opponent of gay rights even with calls for his resignation and the other pressures associated with taking a Biblical stand on a range of issues.

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