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Nearing the halfway mark of the 2018 legislative session, lawmakers are settling on a piecemeal approach to finding additional infrastructure funding.
The Senate on Wednesday passed a bill that would divert up to $40 million per year to cities for infrastructure improvements. That figure represents a fraction of the $400 million a year in additional funding that economic developers and transportation department leaders requested to improve state highways.
Both the $40 million Senate plan passed Wednesday and a $108 million House plan passed earlier this session would take that money from the state general fund — in other words from other state agencies — unless state revenue collections improve beyond the estimates being used by legislators to set next year’s state agency budgets for basic services such as education, Medicaid reimbursements and state retirement pensions.
“It’s kind of piling up – money potentially pulling out of the general fund,” said Sen. Buck Clarke, R-Hollandale and Senate Appropriations chairman. “It causes me great concern. If you pull money out of the general fund for infrastructure, it has to come from somewhere else.”
But some who represent entities who pay for infrastructure funding – state transportation agencies, cities and counties – said they’ll take any additional funding they can get.
“If we don’t start piecemealing today, we’ve got some real issues with bridges being closed and public safety,” said Derrick Surrette, executive director of the Mississippi Association of Supervisors. “I’m all for doing what we can do to help now and then continue to work on a fuel tax increase or another long term solution. When we have more money, let’s do more.”
“I don’t think they’re putting all their eggs into one single basket this year, and that’s what’s encouraging,” said Scott Waller, president and CEO of the Mississippi Economic Council, the state’s chamber of commerce.
“I’m encouraged by where we are with the discussions that are taking place,” Waller said. “As we get further into it, I’m hoping to get more details and figure out what the other pieces of the puzzle will be.”
“I think every step is a step forward at this point,” Waller continued. “We have a long way to go before the session is over. Hopefully, we’ll all come together and find the right solution.”
Currently, 18.5 percent of sales tax collected in the state goes back to cities. The Senate bill passed Wednesday would incrementally increase diversions of sales tax revenues back to cities reaching 20 percent over a period of five years.
The caveat, though, is that sales tax collections have to grow by 1 percent year-over-year in order for the uptick in diversions to take place. Sen. David Parker, R-Olive Branch, said that the full $40 million phase-in could take “about 10 years.”
“We’ve been asking for this increased diversion for years, and even though it’s a five year phase in and not just all at once, we’re appreciative that this bill passed today,” said Shari Veazey, executive director of the Mississippi Municipal League.
“If we can get a couple more of our priority items passed, then I think overall we can increase revenue to cities, and they’ll be able to address some serious infrastructure needs,” Veazey continued.
Senate leaders including Lt. Gov. Tate Reeves praised the legislation Wednesday, though he spent much of last session criticizing proposals that he deemed temporary fixes for roads funding.
Senate Democrats on Wednesday slammed the leadership’s inability to find “real solutions.”
“Don’t go back to your district and say you’ve done something for infrastructure. You haven’t,” said Sen. David Blount, D-Jackson. “The single greatest failure of this Legislature is that we haven’t come together in a bipartisan way to do something for infrastructure.
“All this stuff is just window dressing,” Blount continued. “Until we are willing to spend the money – real money – to fix the problem, we are failing.”
Infrastructure funding was an early session focus of House Speaker Philip Gunn. A bill that would divert $108 million in general fund dollars mainly to cities and counties for road and bridge repair was passed by the House in just the second week of the session.
Last week, House leaders floated a bill that would raise the state’s fuel tax and eliminate the 4 percent income tax bracket – a move they say would be “revenue neutral,” meaning there would be no direct loss in state revenue. The measure would also include a $300 annual fee on electric vehicles and $150 annual fee on hybrid vehicles.
But the proposed plan, which has not yet been considered by a House committee, would simply shuffle spending, placing lawmakers in the same position of having to determine where to cut from other state agencies.
“You’re still going to get back to that debate about writing that big check for infrastructure but having to cut money from Medicaid or some of those other agencies,” Clarke said of the House proposal.