Hosemann: Senate ‘not in the business of doing tax credits this year,’ need to fix state problems first

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Eric J. Shelton, Mississippi Today/Report For America

Then-Secretary of State Delbert Hosemann speaks during MEC’s Capital Day 2019 at the Jackson Marriott Thursday, January 10, 2019.

Lt. Gov. Delbert Hosemann, citing a litany of state needs, caused by everything from flooding to problems in the prison system, says “the only thing missing is pestilence” and theorized that an invasion of crickets might be next.

At that point, a reporter points to the recent crash of a truck carrying honeybees on Interstate 20 near Vicksburg, causing Hosemann to re-evaluate and say maybe the state is facing all the Biblical calamities.

The point Hosemann was making, granted in a dramatic fashion, is that the state has multiple woes and now is not the time to be reducing revenue needed to fix those problems.

“As a general rule…on our (Senate) side we’re not in the business of doing tax credits this year,” he said.

Bobby Harrison

Hosemann, who served three terms as secretary of state and is in his first year as lieutenant governor, is taking a different tact than his fellow Republicans have for the past eight years.

Led by former Gov. Phil Bryant, then-Lt.Gov. and current Gov. Tate Reeves and Speaker Philip Gunn, the Legislature passed more than 50 tax cuts and tax credits during the past two terms, the bulk going to the state’s business community. Those efforts, when finally phased in by 2027, will take about $750 million out of revenue collections in today’s dollars – a sizable chuck considering the current state budget is about $6 billion.

Reeves, Gunn and Bryant have contended those tax cuts will grow the economy and generate more state revenue. It is difficult to say with certainty what lies ahead in terms of revenue collections since the bulk of those tax cuts passed during the past eight years are yet to go into effect.

Regardless, Hosemann said it is time to put the brakes on legislation directing money away from the general fund.

“Tax credits are not favored,” Hosemann said until there is a better understanding of what is needed to deal with the state needs that Hosemann described in Biblical terms.

The issue garnering the most attention is the violence that occurred at the beginning of the year in the state’s prison system. Since the start of the violence, there have been 16 deaths, multiple injuries and a disruption of the entire prison system.

Some would argue that the nearly $30 million reduction in funding for the Department of Corrections in the current 2020 fiscal year compared to the peak funding level of $346 million in fiscal year 2015 might have contributed to the ongoing problems.

In addition, the state is facing a possible federal takeover of its mental health system because of a lawsuit and is facing similar legal issues with its foster case system. Both of those lawsuits are the result, at least in part, of a lack of funding. Plus, of course, there appears to be rampant corruption in the Department of Human Services, resulting in indictments and allegations their leaders and their supporters were lining their own pockets instead of using the money as intended to help the poor.

There are other issues, ranging from inadequate service at driver’s license centers to the underfunding of local school districts based on the state’s funding formula.

Hosemann, for one, openly wonders how more than 1,000 state employees survive earning less than $20,000 annually. He asks how they have money to drive to work after contributing the required 9 percent of their salary toward their pension and paying the premium for state health insurance. He has committed to a pay raise “starting from the bottom up” for state employees.

Reeves and Gunn have bragged about reducing spending in state government during the past eight years. They touted that as a goal that they have achieved. Bryant said there are about 4,700 less state employees than when he took office in 2012. Most would agree that reducing the size of government is a good thing unless, as some would argue, services are not being met.

During this year, Hosemann said the Senate will look at the state’s various tax credits to determine which are working. Tax credits often are given to businesses, presumably, as incentives to create jobs.

Studies by the state’s University Research Center indicate many of the tax credits are not creating jobs and in some instances their impact cannot be measured.

Hosemann said he is not ruling out future tax credits for businesses that create substantial jobs nor is he talking about not honoring state’s commitments for past tax credits. By the same token, Hosemann said he wants to ensure money is available to deal with state needs.

If Gunn and Reeves choose to continue their tax cutting ways of the past eight years, it could put them in conflict with Hosemann.