Voters could decide whether to raise local taxes to fund infrastructure improvements in their communities under a new proposal from House Speaker Philip Gunn.
Gunn pitched the local tax option Thursday in a seven-point infrastructure funding plan shared with Lt. Gov. Tate Reeves, Gov. Phil Bryant and reporters. But Reeves’ office was cool to the idea.
“Out of respect for Gov. Bryant’s authority to set the agenda for the special session, the lieutenant governor sees no reason to comment on ideas that are not likely to be part of any (special session) call,” said Laura Hipp, spokeswoman for Reeves. “Until told otherwise, he expects to pass the appropriation bills as agreed to by House and Senate conferees during the regular session.”
Gunn was out of town Thursday afternoon and did not speak to reporters.
The road funding pitch came just one month before a June 5 special legislative session to fund the Mississippi Department of Transportation and two other departments for next fiscal year. Failure to fund the Transportation Department grew out of a disagreement during the regular session between Gunn and Reeves over how to fund additional road improvements.
Wells and other staffers for Gunn said that their proposal could be finalized before the special session. Gunn did not speak directly to Reeves about the plan Thursday, Wells said, and the Senate has not sent the House a roads funding proposal.
Together, the seven points would bring a minimum of $175 million per year more for infrastructure funding, Gunn’s staff said. Depending on how many cities and counties raised gasoline or other taxes, that figure could be as high as $350 million per year, they said.
“We’re looking at models and throwing the idea out, generally,” said Nathan Wells, Gunn’s chief of staff. “We didn’t want to be so specific with this that we would completely pigeonhole ourselves. But it could also be a sales tax instead of fuel tax. We’re willing to negotiate any of this and come up with something everyone’s happy with.”
Under the proposal, cities and counties could enter into inter-local agreements and decide the tax rate, how long the tax would be levied and how the revenues would be distributed, said TJ Taylor, Gunn’s policy advisor and counsel. For example, Taylor said cities and counties could charge taxes of between 1-11 cents on gasoline and between 1-5 cents on diesel.
Another funding mechanism included in Gunn’s proposal would take $8 million from the Gaming Sinking Fund, which was set up in the 1990s as a way to repair roads and bridges in counties that have casinos and adjacent counties. The fund receives $36 million in gaming tax revenue per year, though several Gulf Coast projects have received money from that fund in recent years.
That new $8 million withdrawal would service a $100 million revenue bond, which would be paid over 20 years, to fund additional roads and bridges repairs in those counties, under the proposal.
Additionally, no new roads in the state could be built if the proposal is adopted, unless right-of-way acquisition has occurred. Repairs to existing roads and bridges and projects like widening or repaving could still occur.
The Mississippi Department of Transportation would be removed from the purview of the State Personnel Board, which would create an understanding with the MDOT agency head that staff cuts would be necessary, Wells said.
The remaining three points of the proposal died during the regular session in March. Those include:
• If general fund revenue grows more than 2 percent above annual projections, the surplus would be diverted to MDOT.
• Cities and counties, split 50/50, would receive $50 million in bonds to spend on infrastructure.
• If more than $50 million is collected per year in voluntary online sales taxes, that surplus would be diverted to MDOT.
An impasse between Gunn and Reeves over roads funding approaches late in the regular session in March led to the failure to pass funding for the Transportation Department.
In the dramatic hours before the deadline, House leaders sent two transportation bills back to the Senate for more negotiation.
Reeves told reporters as the deadline for action approached that the House demanded the insertion of a provision that would create an internet sales tax and divert an existing use tax to help fund roads and bridges improvements across the state. Senate leaders, led by Reeves, stuck to their previously stated views on the issue that the taxes are illegal and refused to budge.
Gunn told reporters at the time that a press release put out by Reeves’ team was inaccurate because of its reference to an unconstitutional tax.
“Its not the implementation of a tax,” Gunn said. “It just says whatever we collect, a portion of that would be devoted to roads and bridges.”
“The House has put forth three separate attempts, two of which were in response to issue that the lieutenant governor and the Senate raised,” Gunn said. “And not once has the Senate at the other end of the hall sat down with us to discuss this.”
“That’s certainly their prerogative to stand on the House floor and lie,” Reeves said in response. “The Republicans have the votes to save taxpayers $30,000 a day for a special session. The Republicans in the House have the votes to keep us from having to spend taxpayer money to keep us from raising taxes.”
Ultimately, the appropriations deadline passed with three agencies – MDOT, Attorney General’s Office, and State Aid Roads – missing out on funding. Funding for those three agencies must be finalized before the new fiscal year begins July 1, but Bryant has not yet released specific issues to be addressed.