The prospect of a grand legislative bargain on funding road and bridge fixes is crumbling.
A ranking Senate leader told Mississippi Today on Wednesday that a potential funding stream that some lawmakers hoped could provide millions of dollars for infrastructure improvements across the state is off the table.
Speaker Philip Gunn, R-Clinton, and the Mississippi Economic Council, the state’s chamber of commerce, have endorsed legislation that calls for some $40 million the state collects from users who voluntarily pay taxes on online purchases to be put toward repairs for roads and bridges.
That proposal also involves authorizing $50 million in bonds for local governments to use for infrastructure and requires the Mississippi Department of Transportation to spend more of its budget on improvement projects.
Sen. Joey Fillingane, R-Sumrall, chairman of the Senate Finance committee, said he’s only open to a bond package for infrastructure.
The Internet user fee will be dead on arrival when a joint Senate-House negotiating committee meets this weekend to work out a compromise, he said.
“As Internet sales tax goes and the spending of those revenues generated therefrom, it’s a dead issue. It’s dead,” Fillingane said.
The Senate’s decisive stance on the Internet tax represents a major blow to House members, who seemed confident in recent days that setting aside the voluntary tax payments for infrastructure was a compromise the Senate leadership could live with.
As recently as Tuesday, Rep. Jeff Smith, R-Columbus, House Ways and Means Committee chairman, told Mississippi Today that the Senate had agreed to keep the online sales tax bill alive because it represents the last hope for fixing roads and bridges.
“I think we can work out a conference report they (the Senate) will be comfortable with,” Smith at the time.
When Mississippi Today asked for reaction to Fillingane’s comments that the Internet taxes would not be used, Gunn’s office chose not to comment. Gunn has estimated the bill, if all its provisions are adopted, would provide “between $150 and $175 million” on infrastructure beginning in July.
“As we move closer to finalizing a budget in the coming week, the proposal to remove about $40 million from the general fund, which could be used by public schools or for public safety needs, will be thoroughly reviewed to determine the best use for taxpayers,” Laura Hipp, spokeswoman for Lt. Gov. Tate Reeves, said this week.
In a state where hot-button social issues most often provide the fodder for the most tense debate, this year many of the fireworks have been over roads and bridges. Earlier in the session, the House approved legislation that would have required out-of-state businesses with more than $250,000 per year in sales to charge customers the state sales tax.
Fillingane’s Senate Finance committee killed that bill in late February, but not before Gunn made a rare public plea to his Senate colleagues, urging them to keep the bill alive and calling it “the last train out” for funding infrastructure improvements.
Lt. Gov. Reeves and Fillingane, a top lieutenant, were unmoved. In a meeting last month with reporters, the two called imposing a new Internet sales tax “unconstitutional” based on U.S. Supreme Court decision. They also expressed concern with pulling the existing voluntary use tax revenue from the anemic general budget.
“We don’t think this is a very good time to be transferring this $40 million out of the general fund,” Reeves said in late February.
The House made another attempt on March 9, when members there tacked on much of the original House Bill 480 relating to Internet sales. In this case, instead of charging tax on all online sales, only the money customers voluntarily pay would go towards roads and bridges. Another provision in the bill would set aside tax collections if growth exceeds 2 percent.
That day, Gunn joined leaders from the Mississippi Economic Council at a Capitol press conference, urging Senate leaders to pass the bill. Reeves did not attend the press conference.
Gov. Phil Bryant also praised efforts to fund infrastructure improvements.
“The House legislation passed today has encouraging features, and I look forward to working with leadership in both chambers as the legislative process continues,” Bryant said in a statement then. “Ensuring our infrastructure meets the needs of citizens and fosters economic growth is a core function of government that deserves appropriate attention.”
Fillingane said that he was not prepared to make any definitive decisions on whether to fund roads and bridges with proceeds from a bond issue.
Another top leader in the Senate, Transportation Committee Chairman Willie Simmons, D-Cleveland, said the House’s compromise was “kicking the can down the road” because it would not provide enough money to address all of the state’s infrastructure needs.
In a 2016 analysis, the MEC said the state needs at least $375 million per year for infrastructure improvements. The Mississippi Department of Transportation in a recent proposal says the state needs $400 million.
“We don’t need to be doing anything that’s not ensuring we’re taking care of our roads and bridges,” Simmons told Mississippi Today. “We should not be celebrating 200 years of birth and inviting people to come and building museums and expect tourists to come in and we give them the kinds of roads and bridges they have to cross (to get to Mississippi),”
Echoing Reeves, Simmons also said he feared that a citizen could challenge the constitutionality of stepped up Internet sales tax collections and bristled at the suggestion that the political leadership is to blame for inaction on infrastructure repairs.
“If anyone is at fault, it’s the citizens who have not made contact with legislators and told them they want to raise the revenue,” Simmons said.