Reeves pitches tax cuts but omits hospital crisis, Jackson water in budget proposal

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Reeves pitches tax cuts but omits hospital crisis, Jackson water in budget proposal

Gov. Tate Reeves released his annual budget proposal Tuesday, using the document to renew his continuing advocacy of eliminating the state income tax and to tout many of the conservative social policies the Republican has embraced in recent years.

In his budget recommendation — which is just a pitch to legislative leaders and not a mandate — Reeves did not propose any funding to address the state's hospital financial crisis or the Jackson water crisis.

Many of the proposals in the governor’s budget proposal are not money-related but instead statements of political philosophy.

For instance, Reeves proposed a “Parents Bill of Rights” that he said is in part a response to liberal policies in other states that require teachers and others to refer to a student at his or her request “by a name or pronoun that fails to correspond with the biological sex on the child’s official record.”

In terms of actual state funds going to local school districts to pay for their basic operations such as teacher salaries, utilities and other items, Reeves recommends $2.36 billion, which is the same level of funding currently being provided for the Mississippi Adequate Education Funding. That level of funding left the local school districts $279.3 million short of full funding. Since 2008, MAEP has been underfunded $3.35 billion.

With school districts dealing with rising costs because of inflation, many legislators have advocated for increased funding for MAEP.

Reeves did renew his call to provide $5 million for a “Patriotic Education Fund” to teach “an accurate accounting of our nation’s history.”In the past year, legislators have rejected the program. Reeves also proposed increasing the amount of funding in a voucher program for special needs students to attend private schools and creating a similar voucher program for foster children.

The Legislative Budget Committee, which consists of Speaker Philip Gunn, Lt. Gov. Delbert Hosemann and other legislative leaders, is slated to release its budget proposal in the coming weeks.

Both the governor and the legislative committee are mandated by state law to release budget proposals in advance of the upcoming January legislative session.

The budget ultimately passed during the 2023 session is for the fiscal year starting July 1.

Overall, Reeves’ proposal of $7.28 billion is $751.2 million or 9.4% less than what was approved by the Legislature during the 2022 session. But the cut is misleading because during the 2022 session, legislators appropriated various pots of federal and one-time funds for non-recurring expenses.

"Our ultimate aim is straightforward: to advance responsible policies that lay the foundation of a strong society and allow Mississippians to flourish," Reeves said in a statement. "We will maximize freedom, we will protect your rights and safety, and we will build a future that every Mississippian can be proud of."

The mainstay of Reeves’ proposal was his call to phase out the state income tax, which accounts for about one-third of state general fund revenue, though that percentage is decreasing thanks to a $425 million income tax cut passed during the 2022 session. Despite the 2022 tax cut, which was the largest in state history, Reeves still wants to take the final step to completely eliminate the income tax.

“My proposal is feasible, practical, and does not require cutting current state expenditures,” he wrote in the budget narrative. “Last session, the fiscal and financial environment was right. Sadly, the political environment was not. This session, I hope that’s not the case.”

In a Tuesday statement, Gunn reiterated his desire to work with Reeves to eliminate the income tax.

"We’re still reviewing it but we understand a part of it is advocating to eliminate the income tax which I have long advocated for," Gunn said. "We look forward to working with the governor to get the votes to make it happen."

As Reeves pointed out, Mississippi, like most states, has experienced record revenue growth and has a surplus of about $2.5 billion. He said in the coming weeks he would provide details on how he believes some of that surplus should be spent.

Hosemann has proposed providing a one-time rebate to taxpayers as multiple other states have done.

In other areas, Reeves proposed:

  • Career coaches. Reeves said he wants to promote Mississippi children entering "lucrative blue-collar professions such as truck driving or being mechanics." For this year, lawmakers allocated $8 million in federal pandemic funds to provide 80 coaches in 51 counties. Reeves proposes spending $16 million in state dollars in the coming year to provide 160 career coaches to help put at least one in every school district across the state.
  • Speed to market fund. Reeves said the state needs to increase the number of “project-ready” sites it has to lure more economic development. Lawmakers for the last two years have provide $50 million a year for site development. Reeves proposes spending $100 million for the coming year.
  • Cross-district and virtual learning. Reeves proposes $2 million to help schools work virtually among districts. He also proposes $1 million to expand computer science courses statewide. Lawmakers have passed a plan that would require all schools to offer computer science learning by the 2024-2025 school year.
  • Vouchers for foster kids. Reeves proposes spending $3 million to allow vouchers for foster children to allow them to stay in the same school when they are transferred out of homes, or to go to schools that better meet their needs. The program would initially provide vouchers for about 400 of the state’s 4,000 foster children, but should later be expanded, Reeves said.
  • Childcare tax credits. Reeves proposes a state child care tax credit for parents and to allow them to write off childcare supplies.
  • Increase pregnancy resource center tax credits. In response to Mississippi’s ban on abortions, Reeves proposes additional state help for pro-life pregnancy resource centers. Lawmakers approved $3.5 million in tax credits for the center this year. Reeves wants to increase that to $7 million.
  • Reduce adoption backlogs/help adoptive parents. Reeves proposes spending $3 million to hire more lawyers at Child Protection Services to help speed adoptions. He also proposes $12 million to provide adoptive parents with larger stipends and help with legal expenses.
  • Increase Capitol spending. Reeves wants to increase the Capitol Police budget of $15.1 million by $4.56 million. He said this will allow for at least 150 officers to patrol the Jackson Capitol Complex Improvement District and reduce .
  • Enhanced school safety. The governor proposed $5 million to train employees in school districts to provide school safety.

Reeves did not propose any additional funds to help hospitals in the state that are on the brink of closing. He did propose additional funds for hospital residency programs designed to increase the number of providers in the state. He also proposed revamping the state program that determines the number of health care providers in each area.

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