Session 2023: Hosemann proposes tax refund checks up to $500, increased ed spending, health care fixes
Lt. Gov. Delbert Hosemann wants to send taxpayers rebate checks up to $500, increase education spending and push year-’round schooling and pre-K, and find fixes for the state’s health care crisis “not just for next year, but for the next generation.”
Some of his policy priorities for the 2023 legislative session that starts Jan. 3 already put Hosemann and the Senate he oversees at odds with his fellow Republican leaders in the House. For starters, House Speaker Philip Gunn and other GOP leaders said recently they want to eliminate the state income tax, not give one-time rebate checks. House and Senate Republican majorities are also expected to spar over extending postpartum Medicaid coverage for working mothers, which Hosemann and Senate leaders continue to support after it failed in the House last session.
“We did the largest tax cut ever last year, close to $500 million in income taxes cut,” Hosemann said. “We have an excess of $270 million this year from our estimate of taxes we’ve collected. We propose to send it back.”
Hosemann said his proposal will be to refund taxpayers “dollar-for-dollar” what they paid in state income taxes for the past year “from the bottom up, until we run out of money.” He said initial estimates are that refund checks would be capped at about $500.
Republicans Gov. Tate Reeves and Gunn still want to phase out the personal income tax, as a follow-on to the massive income tax cuts passed last year, which are still being implemented. They say this will give the state an advantage with economic development.
Hosemann and Senate leaders say the national and state economies are in turbulent, inflationary times with recession possible, and that much of the state surplus is from unprecedented federal spending that isn’t likely to continue or recur. They warn that fully eliminating the income tax in such uncertain economic times is foolhardy, and that the state’s current windfall should be viewed as one-time money and given back to taxpayers as a one-time check.
Hosemann said he has been meeting with hospital and other health care officials across the state, including Greenwood Leflore Hospital, which he called the “canary in the mine” of the financial crisis facing the state’s hospitals, particularly in rural areas. Hosemann said he foresees the state providing some temporary financial aid and increased Medicaid reimbursement to struggling hospitals, but said he wants to find more permanent, structural fixes.
Hosemann said Mississippi’s health care infrastructure may have to change — particularly given population loss in the Delta and other areas. He said rural hospitals may have to shift to basic and emergency services, with more specialized care becoming centralized.
“I don’t want mommas having babies in the back of a car,” Hosemann said. “I think everyone should be within 30 minutes of care. But for that scheduled heart surgery, you may have to go to a larger hospital for it.”
Hosemann is one of few Republican leaders open to discussion of Medicaid expansion — pushed by many health care advocates and hospitals — but he said politically it’s not likely lawmakers will tackle that issue this year, and he said it’s not a cure-all.
“I don’t think that’s the answer,” Hosemann said. “Even if we had that expansion, (Greenwood Leflore) would not make it, it would still be short.”
Hosemann noted that the Senate has passed extension of postpartum Medicaid coverage for working mothers three times, with the House killing it. He said he expects the Senate to make the push to extend coverage from 60 days to a year again, as a way of helping the state address highest in the nation rates of infant and maternal mortality. He said a new study from Texas extending the coverage has shown numerous positive results.
In recent Senate hearings, numerous experts told lawmakers that Mississippi can spend about $7 million a year to keep mothers and newborns healthier, or continue to spend tens of millions more dealing with the fallout of having theworst infant and maternal mortality and morbidityin the country.
Hosemann said he has recently visited several school districts across the state, including in Corinth, Gulfport and Lamar County, that have started using a “modified calendar,” often referred to as year-around schooling. He said such schedules are already showing positive results here and nationwide, and he wants the state to provide incentives to districts that want to participate.
“We don’t need to just keep doing things the way they’ve always been done,” Hosemann said. He said the schedules of roughly nine weeks in school, two-to-three weeks off have been well received by parents and teachers. He said that for Lamar County, it cost about $200,000 to change the calendar and “that will be our measure to incentivize this with state grants for districts that want to do it.”
Hosemann said he wants to increase funding for pre-K public education. The Legislature has increased funding for early learning collaboratives to $16 million, funding about 30 programs across the state, plus another $20 million for other public pre-K programs, Hosemann said. But the state is still serving only about 6,000 of 20,000 eligible kids. Hosemann said he would like to increase that number to about 10,000 students in the coming year.
Recently House Education Chairman Richard Bennett, R-Long Beach, said he also would like to expand pre-K in the coming session. He noted that the state should not only provide more money for the programs, but provide schools with capital funding to build facilities for pre-K classes.
Hosemann also said he wants to increase funding in the coming year for the Mississippi Adequate Education Program. MAEP is the state’s school funding formula passed into law by the Legislature 25 years ago, but almost never fully funded, usually falling short hundreds of millions of dollars a year. Hosemann said Wednesday he wants to increase funding for MAEP, but declined to give an amount. He said it would likely still fall short of full funding, but “will be enough to make you smile.”
But Gunn recently said he was not for putting more money into MAEP. In the past, Gunn has unsuccessfully pushed to scrap the formula, which he said is flawed and continually calls for more money for schools that lawmakers can come up with. He called it “unattainable,” and has instead pushed for money going outside the formula to school programs lawmakers support rather than a formula that allows schools and districts autonomy on spending.
Hosemann said the state Legislature and federal government have pumped historic amounts of money into infrastructure in the last couple of years, and he plans to continue. He said the state will likely use remaining federal pandemic stimulus money to provide more matching water and sewerage money to cities and counties as it did last year. He said he also wants to provide another $100 million for the state’s Emergency Road and Bridge Program as it did last year. The state had recently faced closure of hundreds of roads and bridges, particularly in rural areas, due to lack of maintenance, but Hosemann said the state is well along in addressing the problem.
Hosemann said the state this year let about $963 million worth of road work contracts, “double what they normally would.”
Mississippi has seen huge budget windfalls since the federal government began pumping pandemic stimulus and infrastructure spending into the states. Hosemann said the state will have paid off about $600 million in debt during this time, increased its “rainy day fund” savings to about $700 million, and he proposes no state borrowing for the coming year.
“That means you don’t have to go out into the market to borrow at 6%-7%,” Hosemann said. “… We started a few years ago cutting our budget and getting things in order. We’re running Mississippi like a business and now we have the cash to address the issues we need to address.”
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