Just two days before their own deadline to act, Senate leaders proposed a 282-page bill that they say would devote more than $1 billion to infrastructure in the next five years.
The Senate voted 36-14 to pass the bill Tuesday after three hours of debate. It now goes to the House, where it faces a later deadline.
Mississippi Today spoke with the bill’s authors and detractors to compile these key takeaways:
• Takeaway 1: In order to create the biggest pot of money in the proposal – $600 million over five years for the Strategic Infrastructure Investment Fund — legislative leaders are contradicting their previously stated commitment to growing the state’s reserve fund.
The “98 percent rule” legally requires that the Legislature’s amount of total spending not exceed 98 percent of collected revenues for a fiscal year. Say the state expected to receive $100 this fiscal year. The Legislature would budget to spend $98, with the remaining $2 serving as a temporary reserve to cover potential revenue shortfalls. If revenues meet expectations by the end of a fiscal year, that extra $2 is evenly split into two reserve funds.
“The goal is to reinstate the 2 percent set aside such that we only spend 98 percent of revenue,” Lt. Gov. Tate Reeves said in late November at the first Fiscal Year 2019 budget meeting. “We also want to maintain and, in fact, continue to build our state’s financial reserves.”
But Reeves’ new infrastructure proposal would accomplish the opposite of those two stated goals.
The new infrastructure proposal would divert that entire 2 percent to the new fund, giving the state a thinner margin to meet its spending obligations and taking away the only cash flow into the state’s largest two reserve funds.
In five of the last eight fiscal years, facing lower-than-projected revenue collections, the Legislature has suspended the 98 percent rule to spend 100 percent of collected revenues. Seven times in the past three fiscal years, leaders cut budgets mid-year and raided reserve funds just to balance the budget.
• Takeaway 2: Three Senate leaders – Lt. Gov. Reeves, Sen. Joey Fillingane, and Sen. Willie Simmons – gave the Senate less than 24 hours to study the proposal before asking them to vote on it.
The stated reasoning for the lack of time to consider the bill was that leaders were waiting on President Donald Trump to unveil his federal infrastructure proposal, which he did last Monday. Waiting on the federal proposal, Senate leaders said, allowed them to position their proposal to collect as much federal matching money as possible.
“I wish everyone did have time to look through it,” Fillingane said Tuesday. “But we heard from so many people that said, ‘Please don’t do anything until we hear from the federal program.’ That’s why we waited.”
Several Senate Democrats decried the bypassing of the normal legislative process.
“This is not the way the Legislature is supposed to work,” said Sen. David Blount, D-Jackson. “We need more than 24 hours. It continues to frustrate me that this is the way we do business. This is the way we’re going to continue to do business until the members of this body have had enough.”
For example, Sen. David Parker, R-Olive Branch, did not know that a key provision of the proposal – one that he drafted himself that would increase the diversion of sales tax to cities – had been changed until the Finance committee meeting on Monday afternoon. Reeves had first announced the plan just minutes before.
Neither Mississippi Department of Transportation nor House of Representatives leaders were consulted before the proposal’s unveiling. A spokeswoman for House Speaker Philip Gunn said the office watched Reeves’ announcement via Facebook Live.
• Takeaway 3: The proposal would strip much of the spending authority and project flexibility from the Mississippi Department of Transportation.
The elected, three-member state Transportation Commission currently controls the majority of spending at the Mississippi Department of Transportation. Under the proposal, the majority of the spending authority (for the proposed new Strategic Infrastructure Investment Fund) would transfer from the Transportation Commission to the governor.
Reeves, the mastermind of the current Senate proposal, has raised more than $5 million for an expected gubernatorial run in 2019.
“It just looks like they’re trying to strip the commission of their legislative power without really asking the people what they think,” said Melinda McGrath, executive director of MDOT.
Senate leaders, including key committee chairmen, downplayed those accusations.
“There would be no restrictions on federal or special funds they MDOT receive,” Fillingane said.
“We are not condemning DOT,” said Sen. Willie Simmons, D-Cleveland, who is chairman of the Transportation committee and co-author of the bill. “We’ve been working with them the past six years.”
• Takeaway 4: Private sector leaders would decide how hundreds of millions in taxpayer money is spent – and many of those leaders represent organizations and individuals who have donated millions to the campaigns of lawmakers and statewide officials.
The second largest pot of money under the new proposal – $200 million beginning next fiscal year for the Emergency Bridge Repair Fund – would help repair immediate infrastructure needs like road or bridge repair or replacement.
The State Aid Road Engineer, a top official at a state agency that helps fund county bridge repairs, would provide a list of the most needed projects to a newly formed board, which would make recommendations to the governor.
The new board would be made up of representatives from some of the most powerful, privately-owned special interest groups in the state: Mississippi Economic Council, Mississippi Manufacturing Association, Mississippi Poultry Association, Farm Bureau, Mississippi Trucking Association, Mississippi Association of Supervisors and the Mississippi Municipal League.
These private-sector leaders would have direct influence with the governor – whose campaigns some may have helped finance – over how taxpayer dollars are spent and over which local infrastructure projects are funded.
Money for this fund would come from current funding levels for MDOT, which would lose $25 million a year for the next five years. This fund would also receive the state’s cash balance at the end of the current fiscal year (currently estimated at $50 million, but that number could fluctuate depending on revenue collections).
The fund also would receive approximately $15 million a year in auto tag fee diversions.
• Takeaway 5: The proposal includes a tax increase, despite Reeves and other Senate leaders boasting that the proposal does not include one.
Drivers of electric cars that use no gasoline would pay $150 a year when they renew their car tags, and drivers of hybrid cars that use less gasoline than regular vehicles would pay $75 a year.
The language of the bill itself calls this an “annual privilege tax,” and this would be the only new money generated in the entire proposal that is touted as providing $1 billion for infrastructure.
States across the country have levied similar taxes on electric or hybrid vehicles as they have become more popular. The state’s gasoline tax is in place to charge those who use Mississippi’s roads and bridges. The new tax has been used in other states to capture realistic costs for infrastructure upkeep from those whose vehicles do not use as much gasoline as the average car.