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Are revenue collections already slowing as state leaders consider massive tax cut?

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Are revenue collections already slowing as state leaders consider massive tax cut?

Mississippi's historic growth in tax collections is slowing — at least for a month.

This past month the state collected $518.8 million in taxes and other revenue to $531.9 million in November 2021.

Does the November revenue represent the start of a slowdown in Mississippi tax collections that have grown at an unprecedented rate for more than a year?

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It is a fair question? After all, Gov. Tate Reeves, House Speaker Philip Gunn and others are citing the unprecedented growth in state revenue as a reason to enact a tax cut that will take about $2 yearly out of state coffers.

The November report recently released by the staff of the Legislature Budget Committee represents the first slowdown in monthly revenue collections for the state since July 2021 when tax collections were less than the amount collected a year earlier in July 2020.

Granted, folks who study Mississippi revenue collection trends are fond of saying that one month does not a trend make. The state saw increased collections for 16 months after that slowdown in July 2021. So, there is a good chance that the collections will bounce back in December.

But as sure as night follows day, the slowdown in Mississippi tax collections eventually will occur. History tells us that.

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Revenue grew by 9.54% during the fiscal year that ended on June 30 and by an unprecedented 15.9% the previous year.

The result of the strong growth is that the state has a revenue surplus of $3.9 billion going into the 2023 legislative session that begins in early January. $4 billion in reserves is staggering considering the total state support budget, which consists primarily of general tax collections, such as the sales tax on retail items and the income tax, is $7.86 billion for the current fiscal year.

A small portion of those reserve funds, about $450 million, are federal relief funds and money from settlements, but most of the funds are the result of a boon in state tax collections.

The net result of those large reserves is that state political leaders are feeling pretty good and bragging on their governance prowess.

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“We are in a great financial position,” Gunn, R-Clinton, said recently, echoing similar comments of Reeves.

“We can't neglect or ignore the fact that conservative spending led to this type of financial situation,” Gunn continued. “We have rejected the attempts to grow government over the last many years and this (revenue surplus) has been the result of that.”

That is all well and good except for the fact most states have had similar unprecedented surpluses. California, for example, a state that Mississippi politicians like to criticize for its liberal policies, had a whopping $98 billion surplus, though, it appears that the West Coast state's tax collections already are slowing.

But before slowing, California provided one-time rebates of between $200 and $1,500 to individuals earning less than $250,000 and to households earning less than $500,000.

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Multiple states, controlled by and Democrats, have provided rebates.

In Mississippi, the taxpayers have not yet reaped any direct cash from the massive surplus. In the 2022 session, legislators approved the largest tax cut in state history – a $525 million cut to the income tax. But that tax cut will not be fully phased in until 2026. Taxpayers can receive a small monthly benefit from the tax cut starting in January if they change their payroll deductions. Otherwise, taxpayers will receive no benefit from the tax cut until they file their tax returns in early 2024.

Lt. Gov. Delbert Hosemann has proposed the Legislature provide a rebate in the 2023 session. Reeves and Gunn are proposing the complete elimination of the income tax. Such a cut will take an additional $2 billion out of the state treasury on top of the $525 million tax cut made last year.

During much of the 1990s, thanks to the start and incredibly rapid expansion of casino gambling, Mississippi experienced a prolonged period of historic revenue growth.

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But by the early 2000s, as a recession hit the country that was especially bad in Mississippi, the Legislature and then-Gov. Ronnie Musgrove were having to cut budgets.

That is not to say that the Legislature and governor should not look for innovative ways to spend the surplus for the betterment of the state and its citizens.

A reasonable debate can be had on whether it is better to return funds to citizens or use the surplus to address the litany of problems facing the state. But it is safe to assume tax cuts that take more than $2.5 billion yearly out of state coffers will have a lasting impact, especially when revenue collections slow as they most assuredly will.

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

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Mississippi Today

Senate committee passes Medicaid ‘expansion’ bill that leaves hundreds of millions in federal dollars on table

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mississippitoday.org – Sophia Paffenroth and Taylor Vance – 2024-03-27 16:39:21

The only surviving expansion bill in the Legislature passed the Senate Medicaid Committee Wednesday and is headed to the full Senate for a vote. 

But the proposal, as it passed the Senate committee, is not considered traditional “expansion” under the Affordable Care Act, and therefore would not qualify for the enhanced federal the law grants to newly-expanded states. It would leave the cost of the expanded coverage up to the state.

The Senate committee passed the House Republican bill with a strike-all, meaning it replaced the bill's original language with its own plan, which Medicaid Committee Chairman Kevin Blackwell, R-Southaven, refers to as “expansion light.”

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Blackwell estimated about 80,000 people would be eligible under this version of expansion, and half of that would apply. The House plan was expected to more than 200,000 people.

When a draft of the Senate's bill was leaked on March 20, Blackwell stressed to that he and Senate were still tweaking parts of the legislation. However, the legislation that passed the committee is essentially the same as what was outlined in the leaked draft. 

The Senate proposal would:

  • Cover working Mississippians up to 99% of the federal poverty level. For an individual, that would be an annual income up to $15,060. For a of four, that would be an annual income up to $31,200.
  • Not cover those making between 100% and 138% of the federal poverty threshold — not even through a private-care option. A plan that doesn't cover people making up to 138% is not considered “expansion” under the Affordable Care Act, meaning Mississippi wouldn't qualify for the 90% federal match rate that the Affordable Care Act grants to new expansion states, nor the additional, two-year 5% increase in match rate the federal provides to newly-expanded states under pandemic relief spending passed by Congress. Instead, as was the case with Georgia, Mississippi would only get its regular federal Medicaid rate of about 77%.
  • Leave the health insurance exchange, the online marketplace that offers federally subsidized plans to people who make between 100% and 138% of the federal poverty level, intact. The Senate plan, unlike Arkansas' Medicaid expansion, would not provide extra subsidies from the state's federal Medicaid money available from the ACA.
  • Include a work requirement mandating at least 120 hours of employment a month in a position for which health insurance is not paid for by the employer. That's more stringent than Georgia's plan, which mandates 80 hours a month. There are several exemptions, such as for full-time students or parents who are the primary caregiver of a child under six years old.
  • Go into effect 30 days after the federal Centers for Medicare and Medicaid Services approves a waiver necessary for the work requirement. That's unlikely to happen under the Biden administration, which has rescinded work requirements previously approved for other states during the Trump administration and has not approved new ones. If the federal government denies the waiver, Mississippi would have to wait until a new administration took office, or sue the Biden administration. Georgia remains in litigation with the federal government over the work requirement issue, and has suffered low enrollment and missed out on millions in federal funds by not fully expanding coverage.
  • Require anyone who voluntarily dropped private insurance to wait 12 months before applying for Medicaid coverage.

Senate Democrats voiced several concerns about the administrative burden of the work requirement and the 120 hour a month minimum, which is even stricter than Georgia's plan – currently the strictest expansion plan in the country. 

Sen. David Blount, D-

Sen. David Blount, D-Jackson, asked Blackwell about the enhanced match from the federal government.

“So the federal government paying our match for two years and 90% after the two years – we would not qualify for that?” Blount asked.

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Blackwell said that is correct, and they would leave that money on the table.

Sen. John Horhn, D-Jackson, introduced two amendments: one to decrease the recertification requirements from four times a year to twice a year, and the other to reduce the work requirement hours from 120 hours a month to 80 hours a month. 

Both amendments were voted down by Republicans, who make up a majority of the committee's membership. Despite their amendments getting shot down, the Democrats still voted in favor of the bill. Only three Republican senators in the committee voted against the plan. 

When asked about the administrative burden of enforcing the work requirement, Blackwell said he is not worried and believes the Division of Medicaid has enough employees for its implementation. 

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But Georgia, the only state currently with a work requirement in its expansion plan, has spent $26 million taxpayer dollars to ensure a mere 3,500 people to date. More than 90% of that has gone to administrative and consulting costs. 

The bill is expected to be taken to a floor vote as early as Thursday, with a deadline of April 10. 

Since the Senate plan is drastically different than the House proposal – which is a mostly-traditional expansion plan insuring those who make up to 138% of the federal poverty level and would go into effect whether or not the federal government approves a work requirement waiver – a final version will likely be hammered out later in the session in a conference committee.

Any final plan would realistically need a two-thirds majority from both chambers to show it has the potential to override a potential veto from Republican Gov. Tate Reeves, who has privately told lawmakers he plans to veto any Medicaid expansion bill.

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Reeves on Tuesday night hosted around 20 state senators at the Governor's Mansion in downtown Jackson where he, again, reiterated his opposition to any form of Medicaid expansion, according to multiple people familiar with the situation. 

At the Tuesday night , Reeves said he would veto the Senate's expansion plan if it reached his desk, though he reportedly said he approved the Senate's work requirement provisions. 

Shortly after the committee passed the expansion legislation, Reeves posted on social that the Senate plan is “still bad policy” and he will oppose it.

“And so I will continue to do what I told the voters I would do – fight Obamacare Medicaid Expansion with every ounce of my being,” Reeves said.  

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

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Mississippi Today

Michael Guidry named Mississippi Today managing editor

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Mississippi is pleased to announce Michael Guidry as managing editor.

Guidry, who joined the Mississippi Today staff in February 2024, manages the newsroom's day-to-day and plans broader editorial strategy.

He previously served as managing editor at Mississippi Public Broadcasting, where he developed skills in audio storytelling as a producer, writer and editor.

“Michael is a perfect fit for what we're building at Mississippi Today,” said Adam Ganucheau, Mississippi Today's editor-in-chief. “He's a proven newsroom leader, and he knows Mississippi. He also brings us a lot of digital and audio skills that can expect to see more of pretty quickly.”

A native of Destrehan, , Guidry moved to Mississippi to attend Millsaps College, where he earned a dual Bachelor of Arts in History and Theatre. After graduating, he worked as a public school teacher for more than a decade.

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Michael Guidry

While at MPB, Guidry helped a team that received recognitions from the Radio Television Digital Association, the Mississippi Association of Broadcasters and the Public Media Journalists Association.

MPB's special feature on – which he co-produced and co-narrated – received the 2023 Region 9 Edward R Murrow Award for Excellence in Diversity, Equity and Inclusion.

Guidry continues to host MPB's weekly politics show @Issue.

“As someone who spent years in a space adjacent to Mississippi Today, it became evident the newsroom was quickly becoming a leader in local, nonprofit news,” Guidry said. “I could not be more to join a publication dedicated to elevating the voices of while holding power to account.”

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

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Mississippi Today

Geoff Pender named Mississippi Today politics editor

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Mississippi is pleased to announce Geoff Pender as and Government Editor.

Pender, who first joined the staff as senior political reporter in May 2020, will oversee the day-to-day of Mississippi Today's politics team.

He brings more than 30 years of experience covering Mississippi politics to the new role.

“If you follow Mississippi politics, you know Geoff Pender,” said Adam Ganucheau, Mississippi Today's editor-in-chief. “He's been a vital member of our politics team since 2020, and we couldn't be more excited for him to now it. He's been a mentor to so many of our reporters, and he's led several impactful investigations for us. Readers can expect more of that from him in this new job— and if you're wondering, you'll also continue to see plenty of his analysis of the 's biggest stories.”

Geoff Pender

Before joining Mississippi Today, Pender was political and investigative editor at the , where he also penned a popular political column. He previously served as an investigative reporter and political editor at the Sun Herald, where he was a member of the Pulitzer Prize-winning team for Hurricane Katrina coverage.

A native of Florence, Pender is a journalism graduate of the of Southern Mississippi and has received numerous throughout his career for reporting, columns and freedom of information efforts.

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“I truly appreciate this opportunity and appreciate being able to continue working with the great team of journalists at Mississippi Today providing in-depth coverage at such a crucial time for the state,” Pender said.

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

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