State News
No talk of new Miss. taxes during crunch
Republican Gov. Haley Barbour and key legislators say they won’t try to offset Mississippi’s sluggish revenue with a tax increase in 2010, but fees are open for discussion.
Mississippi’s economic situation mirrors the rest of the nation. State revenue is down by $111.6 million for the first four months of the current fiscal year. Barbour cut nearly $172 million from the $6-billion budget in September and warned future spending reductions would be unavoidable. The governor said last week as much as $200 million more could be trimmed before the fiscal year ends June 30.
Barbour said a tax increase won’t be an option to generate revenue.
“We may adjust some fees,” Barbour said. “The two guiding principles for me are that we want to do things that help create private-sector jobs. We will also try not to do things to reduce private-sector jobs, which is what a tax increase would do.”
A similar sentiment has been shared by House Speaker Billy McCoy, a Democrat from Rienzi. McCoy said only minor fee increases would be considered by lawmakers when they convene in January. McCoy said taxes increases would not.
No one has elaborated on which fees are being eyed for an increase.
The first glimpse of lawmakers’ proposals comes Dec. 2, when the Joint Legislative Budget Committee releases its spending recommendations for the fiscal year that begins next July 1. Barbour is expected to release his budget plan in late November.
It’s not surprising there’s no tax talk for now, especially since lawmakers — with Barbour’s support — increased the cigarette excise tax and a hospital tax earlier this year.
In recent years, Mississippians have seen the price of traffic fines and speeding tickets go up. Last session, legislators approved increases on some Department of Insurance licensing fees and authorized a Department of Environmental Quality fee for surface-mine worker safety training.
The Budget Committee last week reduced the estimate for the state’s general fund for the current fiscal year. They also set the initial estimate for how much money the state might spend during the budget year that begins next July 1. It is three-tenths of 1 percent higher than the new estimate for the current year.
The new general fund estimate for the current year is nearly $4.6 billion, down from about $4.9 billion. With federal stimulus payments, a lawsuit settlement and some other money on top of the general fund, state spending had been close to $6 billion.
Barbour said spending next year will have to be $550 million to $600 million less than this year.
“That’s on top of the fact that a lot of departments and agencies took 5 to 7 percent cuts already,” he said. “State revenue continues to fall. Plus we’re going to lose hundreds of millions of dollars in federal stimulus funds.”
Ed Sivak, director of the Mississippi Economic Policy Center, a group that advocates policies to help people with low or moderate incomes, is among those who believe the scalpel approach won’t fix the state’s budget problems.
Sivak has said tax increases should be on the table. Sivak said legislators could consider updating the state income tax and expanding sales taxes. He also suggested increasing some user fees to regional averages.
“As the needs of Mississippi’s working families continue to increase, the state has fewer resources to meet their needs,” Sivak said. “Solving a problem this big requires a balanced approach that includes raising revenues. A cuts only strategy will only hold Mississippi back when prosperity returns.”
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