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At a recent Mississippi Press Association forum, gubernatorial candidate Bill Waller Jr. was asked if elected how he was going to pass a gasoline tax increase for road and bridge repairs through the Legislature since it had been his party blocking the effort.
“I think there is enough interest in the business community and I speak to a lot of Republican groups…, and I get no push back, from a few people,” said Waller, the former chief justice of the Mississippi Supreme Court.
Waller went on to say that Republican icon Ronald Reagan shepherded through a gasoline tax increase in the 1980s. Waller then conceded that it might take a tax swap, such as decreasing the personal income tax or on the costs of car tags, to garner the votes in the Mississippi Legislature to increase the gasoline tax.
Whether to increase the state’s 18.4-cent per gallon gasoline tax, the fourth lowest in the nation, has emerged as a central issue for the 2019 gubernatorial candidates – especially in the Republican primary where front-runner Lt. Gov. Tate Reeves opposes increasing it and Waller and state Rep. Robert Foster support increasing it while decreasing other taxes. Some see an increase in the motor fuel tax as needed to fund infrastructure on both the state and local levels.
But it might not be only Republicans who have to be convinced to increase the gasoline tax. In recent sessions, as legislators have struggled to find funds for needed road and bridge repairs, many members of the minority Democratic Party have said they could not support raising the gasoline tax while taxes have been slashed in many other areas, particularly for corporations.
“The first step in dealing with the budget problems and the infrastructure problems is to put a freeze on the reckless tax cuts passed by the Republicans in the Legislature,” said Sen. David Blount, D-Jackson. Blount and other Democratic senators have introduced legislation in past sessions to repeal the 2016 tax cuts, which will reduce state funds by $415 million annually in today’s dollars when fully enacted in 10 years, and direct those funds to infrastructure. Since the tax cuts, the largest in state history, are just being phased in, Blount said by just repealing them now and directing the funds to roads and bridges, a source of revenue could be found to fix the problem without anyone’s taxes actually being raised.
State Rep. Robert Johnson, D-Natchez, said he agrees with Blount’s sentiment and that he opposed those tax cuts and had been reluctant to raise the gasoline tax while giving corporations a large tax cut, but that going forward he believes many Democratic legislators would favor increasing the tax for infrastructure.
He said he understands the gasoline tax hits working families, but he said it also has the advantage of being levied on large corporations that have no connection to Mississippi other than driving their trucks through the state.
Attorney General Jim Hood, the Democratic front-runner in the race for governor, points out the $415 million tax cut passed in 2016 that is being phrased in and the about 50 tax cuts passed earlier taking more than $325 million out of the state’s coffers have limited the amount of money for infrastructure and other state needs. He calls the 2018 special session where a lottery was passed for infrastructure and funds were diverted from education and other programs to infrastructure “smoke and mirrors.” The plan will produce about $225 million when fully enacted for state and local infrastructure, legislative leaders have said. The only source of revenue for state needs from the special session, though, Waller has said is up to $80 million from a lottery that is expected to be in operation later this year.
Hood said a reliable source of additional money must be found for infrastructure. But Hood ‘s campaign says the candidate has not endorsed a gasoline tax increase. His campaign said Hood wants to look at other options, such as eliminating waste. But a study by a legislative watchdog committee has said there is not enough potential waste in the Department of Transportation budget to deal with the infrastructure needs.
Reeves touts the 2018 special session as “a good first step in addressing our infrastructure challenges.”
He added, “We will always be looking for more money…Infrastructure is a core function of government. What we proved during the special session is that we don’t have to raise anybody’s taxes to invest in core functions of government.”
Reeves argues that an increase in the gasoline tax would disproportionately hurt working families. His campaign points to 2016 data from the U.S. Energy Information Administration and Bureau of Economic Analysis that finds “Mississippians spend a higher percentage of our per capita income on gas than any other state’s residents – three times more than New Yorkers, for example.”
Later data could not be found. Since 2016, multiple states have increased their gasoline tax, perhaps altering that study. The average state-imposed tax on gasoline nationwide is 28.66 cents per gallon compared to Mississippi’s 18.4 cents per gallon, which is the fourth lowest as of January, according to the U.S. Energy Information Administration. A study by a Mississippi Senate committee in 2016 found that it would take a gasoline tax of 37 cents per gallon to match the buying power the 18.4-cent-per-gallon tax had in 1987 when it was first enacted.
Foster, like Waller, touts a tax swap as part of his plan to increase the gasoline tax. But he goes further, advocating eliminating the personal income tax and replacing that lost revenue with use taxes, such as the gasoline tax and sales tax on retail items. He said that would spur economic growth.
Hinds County District Attorney Robert Shuler Smith, who also is running in the Democratic primary for governor, said, “I think (a gas tax increase) would help in education.” It would be unusual for a state to divert a gas tax, normally levied for road and bridge needs, to education.
Waller recently was asked how would he achieve other goals, such as eventually moving teacher pay to the Southeastern average, if money was redirected from education and other programs to a fund designated solely for roads and bridges as he has proposed through his tax swap plan.
Waller explained that he believes investing in infrastructure, expanding Medicaid that would garner an additional $1 billion annually in federal funds and providing teacher pay raises would spur economic growth, “a Mississippi miracle, a renaissance” and grow state revenues.
“People need to have some pride and optimism. That is what I think will happen. If it doesn’t happen, y’all can vote me out,” he said to laughter.