Lt. Gov. Tate Reeves indicated Monday there is general agreement between the House and Senate leaders to provide about $200 million annually for the state’s infrastructure needs during a special session that Gov. Phil Bryant is expected to call to begin on Thursday.
When told that Reeves, who presides over the Senate, said there is a deal, House Speaker Philip Gunn, said, “That is my hope. We passed our bill last January … That is the bill we are going to pass this Thursday.”
Bryant, a second term Republican, has yet to issue the official call for the special session, but Monday morning Reeves said he expects it to include enacting a lottery and diverting a portion of use tax revenue from education and other programs to transportation. Use tax is the 7 percent tax levied on retail items purchased out of state.
The governor also said he wants the Legislature to consider how to divvy up about $700 million in settlement funds the state will receive from the 2010 BP oil rig explosion and ensuing oil leak that impacted the coastal counties and resulted in less sales tax revenue for a period of time for the state.
The bill Gunn said the House intends to pass early on Thursday would divert 35 percent of the state’s use tax revenue (viewed as a growing source of revenue) from education and other services to transportation. That money (thought to be about $115 million annually) would be allocated to the cities and counties for infrastructure needs.
House and Senate leaders have been grappling for multiple years with how to generate additional funds for what most agree is a deteriorating state and local infrastructure system. There has been no willingness to increase the 18.4-cent per gallon motor fuel tax and finding a viable alternative has proven difficult.
Infrastructure has been at the forefront of issues facing the state and could be a major factor in the upcoming 2019 statewide elections. In addition, revelations of a plan to build a $2 million access road from two gated neighborhoods, one of which is where Reeves lives, might have intensified the desire to find additional funds for transportation. The frontage road project proved to be controversial when it came to light earlier this summer and has since been halted.
On Monday, Reeves said he expects that the governor’s special session agenda also would entail diverting revenue from sports betting that is now being allowed at Mississippi casinos and issuing about $300 million in debt for bridge repairs on both the state and local levels. Close to 500-county-owned bridges across the state are closed, and many counties do not have the money to pay for the repairs to reopen them.
Reeves said there are details to work out, but that there is “a general agreement” between the House and Senate leadership on the issues in the special session.
“I think this is definitely a step in fixing one of our most challenging issues,” Reeves said Monday morning.
Both Reeves and Gunn have voiced opposition to the lottery, but the lieutenant governor says he anticipates it being voted on during the special session. Gunn also said he would allow a vote on a lottery in the House if the votes exist to pass it and if it has the support of his Republican caucus, which holds a three-fifths majority in the House. Only six states nationwide, including Mississippi, do not have a lottery.
The estimate, Reeves said, is that the lottery would generate about $80 million annually. That revenue, as well as other smaller revenue sources, such as the sports betting revenue and a fee on hybrid and electric cars, would generate about $100 million annually for state transportation needs.
During the 2018 regular session, reports were that the Senate wanted local governments to provide “matching funds” in order to draw down the additional state funds for transportation. Reeves said Monday that is not a requirement to have legislation passed during the special session.
“Many of these items (proposed for the regular session) were House proposals during the regular session, many, if not most,” Reeves said. “Some of them were in Senate bills. The bottom line is if all of these pass the Legislature in the next few days or week or so…” the Legislature would have “found a viable” solution to the state’s infrastructure needs.
He said he, Gunn and the governor have been working on the issue since the regular session ended with no agreement.
Questions still will be asked of whether an increase of $200 million annually is enough, considering some have estimated an additional $400 million annually is needed, and whether other agencies can absorb more than $100 million per year being taken from them for transportation.
Sen. Hob Bryan, D-Amory, said while he has not seen the governor’s proposal, it appears from comments, such as those made by Reeves and Gunn, that it would not fix the transportation problem, but instead create other problems by taking money from education and other vital services.
Bryan said the proposals”wouldn’t fix our highways, but..might push the problem past next year’s elections.”
He said if the enactment of the 2016 tax cut, which takes $415 million out of state revenue during a 10 year period, was delayed that there would be plenty of money to deal with transportation woes.
Gunn and Reeves said state revenue is growing enough to absorb the tax cuts and to divert additional money from education and other sources to transportation.