House OKs roads bill that could create a $108M budget hole

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Depending on where you stand on the Legislature’s need to fund road and bridge repairs and its need to keep the budget balanced, there was some good news and some bad news in the House on Thursday.

The House unanimously pushed out an infrastructure bill that would pull more than $100 million from the state budget and divert it to road and bridge funding around the state.

With 118 votes in favor and none against the bill, legislators approved House Bill 722, which would divert 35 percent of use tax revenue to counties and cities for road and bridge repair and maintenance. Many out-of-state businesses voluntarily pay the state use tax for online purchases and other transactions.

The House hurriedly introduced the bill on Wednesday. Rep. Trey Lamar, R-Senatobia, who is the vice-chairman of the Ways and Means Committee called it “the most significant piece of legislation that I’ve seen in my time at the Legislature on local levels.”

When pressed, Lamar had no answer for how the state could make up those funds to pay for other state budget needs.

Counties and cities would each receive 15 percent of the tax funds. The Mississippi Development Authority would manage an additional 5 percent to provide grants to cities and counties for maintenance and reconstruction of roads and bridges.

R.L. Nave, Mississippi Today

Rep. Trey Lamar, R-Senatobia, presents an infrastructure bill to the House.

“Make no mistake about it, this money is coming from the general fund and if this body confirms this legislation, we’ll be making a statement that we want to prioritize road and bridge funding in the state of Mississippi,” Lamar said.

Ways and Means chair Rep. Jeff Smith, R- Columbus, said this diversion would result in a roughly $108 million hit to the general fund.

“We feel like between now and conference time we will have a method to come up with a plan to beat the shortfall,” Smith said.

Others were skeptical about the strategy.

“I guess my concern is that this appears to be just a Band-Aid approach,” Rep. Willie Perkins, D-Greenwood, noted when the bill first came up on Wednesday. Leflore County, which he represents, would receive $519,000 under the bill, he said.

“That wouldn’t even begin to fix everything,” Perkins said.

Democrats objected to taking up the bill after it passed out of committee Wednesday, and called a caucus meeting the next morning to read and discuss the legislation. On Thursday, most members voted in favor of the bill (Democratic representatives Kabir Karriem, of Columbus and Jarvis Dortch, of Raymond, voted present).

At a press conference after the meeting, the House Democratic Caucus told reporters that while they felt uncomfortable voting for a bill that may result in cuts to state agencies and services, it is important to address the crisis of transportation in the state.

“We’ll be working the rest of the session to make sure that $108 million does not come on the backs of the people of the state of Mississippi but it adheres to the benefits of cities and counties at the same time,” said Rep. Robert Johnson, D-Natchez.

The House also approved an amendment introduced by Rep. Tommy Reynolds, D-Charleston, which states the bill is “just the first phase in a needed comprehensive state and local road, street and bridge improvements plan.”

R.L. Nave, Mississippi Today

Rep. Robert Johnson, D-Natchez, asks a question during House floor debate

“You cannot have a comprehensive plan unless you have an influx of money from somewhere else — diversion will not get it,” said Johnson, who co-authored the amendment.  “What we’re committed to is making the public understand that you have to invest money to do something about the roads and push the Legislature to make the hard decisions they failed to make.”

HB 722 is the latest in a series of road funding efforts in the House early in the current legislative session. Last week, members voted for three road and bridge funding bills. They await action in the Senate. Lt. Gov. Tate Reeves has remained silent on the issue.

Local officials seemed hopeful about the prospect of any movement.

In 2016, the Mississippi Economic Council published a study recommending that the Legislature appropriate an additional $375 million for MDOT, with $300 million going towards infrastructure improvements. MEC offered several suggestions for funding the additional highway funds, including a gas tax increase, an extra $10 on the annual license tag fee and a general sales tax increase.

Mike McGregor, president of Pontotoc County Board of Supervisors, echoed the frustrations of local officials across Mississippi who just want action. He said diverting more of the use tax to counties would be welcome but he could also stomach a five to seven-cent increase in the state’s 18.4 cent fuel tax, which has not risen since the 1980s.

“It (getting a portion of use tax revenue) would be good news, but you got to have some money from somewhere. There’s certain ways they can get it. It looks to me that the gas tax would be the easiest. In my opinion, your mom and pop that don’t use the road much, it won’t cost them as much. The people that use the roads get taxed on it. That’s the way it should be,” McGregor said.

Diverting part of the use tax to roads emerged late last year as a more palatable alternative to other revenue boosters such as increasing the sales tax.

“Aging infrastructure is one of the biggest challenges facing cities and counties across the state. Anything the Legislature can do to help us make repairs to this aging infrastructure, primarily by returning tax money to the local governmental agencies, is very appreciated and much needed,” said Vincent Creel, a spokesman for the City of Biloxi.

Creel said there are a lot of things to factor into the cost of maintaining infrastructure, including complying with the Americans with Disabilities Act and updating roads to fit today’s standards and traffic counts — not the standards of decades ago when many of the structures were first built.

“There’s not enough money to be able to do it. (Tax revenue) that can be returned to local government — and the returned part is a big thing — by just sharing the revenue locally, that is very welcome,” Creel added.

A spokeswoman for Reeves said he would review all proposals the Senate receives from the House.

Contributing: Kendra Ablaza