Major changes to the state tax code, including reducing the grocery tax and eliminating the personal income tax over time, will be considered during the 2025 legislative session, House Speaker Jason White said Monday.
White, R-West, who recently completed his first session as House speaker, met with media late Monday afternoon to answer questions about the recently completed 2024 session and to discuss his agenda for the 2025 session.
White said he will form a select committee to study the state’s tax laws and to make recommendations before the 2025 session. But it was obvious that he already has an idea of what he believes should be considered.
“It would be a net (tax) reduction,” White said, but he added if both the grocery tax and the income tax were cut that taxes would have to be increased in other areas to ensure enough revenue to provide state services.
White said he would like to see the state’s 7% grocery tax, the highest statewide tax of its kind in the nation, be cut at least in half as soon as possible. He also said his goal would be to completely eliminate the personal income tax, which provides just under one-third of the state general fund revenue. But he said that would be done over time.
“We have to be smart how we do it,” White said.
It seems that White is eyeing reviving at least portions of the tax reduction plan first proposed in the previous term by former House Speaker Philip Gunn, then-Speaker Pro Tem White and Ways and Means Chairman Trey Lamar. That plan included reductions in the grocery tax, elimination of the income tax over time and increases in the general sales tax on other retail items.
That plan drew criticism from many, including Gov. Tate Reeves, because of proposed increases in the sales tax on some items. White said the reason for the select committee, in part, would be to meet with outside groups to try to develop consensus on what taxes could be raised while enacting an overall net decrease in taxes by cutting the grocery tax and the income tax.
While the earlier plan to eliminate the income tax and to reduce the grocery tax was rejected, it did lead to a $525 million income tax cut – the largest in state history. It will not be fully phased in for two years. When the cut is fully phased in, the income tax still will generate close to $2 billion a year in state revenue.
The income tax cut is just the latest in a series of tax cuts totaling more than $1 billion a year the Legislature has passed over the past decade.
White’s goal also would be to provide the Department of Transportation with a new stream of revenue to fund infrastructure. Transportation is currently funded through an 18.4-cents-per-gallon fuel tax. But Transportation officials have contended for years they need more money for road and bridge projects and maintenance.
The speaker said the state could afford another major tax cut – pointing out that for the past two years the state has experienced unprecedented revenue surpluses. White acknowledged that unusual circumstances caused by billions in federal COVID-19 relief spending and by revenue generated by high inflation have helped lead to the large surpluses.
“That is why we have moved slowly,” said White.
White also said that Medicaid expansion would again be a major topic during the 2025 session. Efforts to expand Medicaid to provide health care for the working poor died during the 2024 session when a consensus could not be reached between the Republican majority House and Senate on the issue.
“I do think we got a pretty clear picture of the lay of the land” on Medicaid expansion in the 2024 session, White said. “A consensus did develop among the health care community, faith community, Mississippians in general and certainly the backing of business leaders as a whole.
“… That brought people around to the position to take it (Medicaid expansion) seriously and try to make it work. I think that lends itself to we will continue to push that. What that looks like I don’t know.”
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