Gov. Tate Reeves said Monday he wants to eliminate the state’s income tax, give teachers a large pay increase and move state parks to a new agency.
Reeves also said that local governments that don’t prioritize spending federal COVID-19 relief funds on critical water and sewer infrastructure needs will find “their cries for help will probably go unanswered.”
The first-term Republican governor issued his annual budget proposal that represents his priorities for lawmakers, who will follow next month with a budget proposal of their own. Neither is binding and both are simply blueprints that lawmakers can use to craft the budget at the end of the upcoming session.
The new session starts January 4 and fiscal 2023 will begin on July 1.
“In fiscal year 2023, we will seek to eliminate tax burdens and make a bold move to attract more and better jobs for our people,” Reeves said. “If we want to be competitive, we must be capable of pulling out a map of the United States and recognize that Texas is to our west, Florida is to our east, Tennessee is to our north.
“We compete with them every single day for new jobs. In every instance, we were at this disadvantage because they don't have an income tax.”
The biggest proposal is Reeves’ quest to eliminate the state income tax, starting with the 4 percent bracket in fiscal year 2023 and some of the 5 percent bracket in calendar year 2023. His budget would use $1 billion out of the $1.8 billion in surplus revenues to start the five-year phaseout. He also wants lawmakers to implement budget caps of 1.5 percent growth in general fund spending each fiscal year.
He’s also opposed to any proposed tax swap that would trade an increase in one tax for a decrease with another.
“I am opposed to cutting taxes over here but raising your taxes over there,” Reeves said. To me that's not a tax cut. That's a tax swap.”
The teacher pay raise would cost $71 million and give teachers an immediate $1,300 pay raise, with two more increases of $1,000 in the next two fiscal years for a total of $3,300. The governor says the pay hike will move the state from 37th nationally to 21st best (fourth best in the southeastern region).
As far as the $800 million in federal COVID-19 relief funds allocated statewide to municipalities and counties, the city of Jackson received $45 million and Hinds County received between $42 million and $43 million in federal funds.
Reeves said if cities and counties want to be rewarded with more money from the state for water and sewer infrastructure or even additional law enforcement resources, they must spend these funds on critical infrastructure needs.
“I think it's really important that if they really do believe that their priority is the water and sewer system, and I think it should be that they invest their local money,” Reeves said. “I think we as a state should be prepared to reward those entities that spend their money on areas that are critically important. “
Speaking of Jackson, Reeves continued his push for expanding the role of the Capitol Police.
The governor also wants $5.5 million for the Department of Public Safety to double the size of the Capitol Police Force to 150 officers. These officers were transferred last session from the Department of Finance and Administration to the DPS and are responsibly for policing the Capitol Complex Improvement District in Jackson.
Reeves also wants state parks to be transferred from the Mississippi Department of Wildlife, Fisheries and Parks to the Mississippi Development Authority, which handles corporate recruitment and tourism. He also wants a trial program for two state parks to be run by a third-party vendor.
The governor also has plans for the American Rescue Plan Act funds, for which the Legislature held a hearing to discuss. Reeves’ plans include:
- $200 million for broadband expansion.
- $130 million for workforce training through Accelerate Mississippi.
- $100 million for water and sewer infrastructure repairs statewide. The governor says in the future he wants $1.2 billion in the next few years in the form of matching funds for counties and municipalities.
- $52 million for tourism promotion.
- $50 million for downtown revitalization.
