In less than 45 minutes Wednesday afternoon, the House approved legislation that would provide the largest tax cut in the state’s history and one of Mississippi’s largest teacher pay raises.
Both bills now go to the Senate, where members are working on their own tax cut and teacher pay raise bills. While the House passed both bills in only the second week of the 2022 session, it is likely that the final outcome for both proposals will not be known until much later in the 90-day session.
Still, House Speaker Philip Gunn said his chamber’s members sent a strong message on Wednesday.
“These two items were top agenda items,” said Gunn, a Republican from Clinton. “We intended to roll both out early. We are glad to get them passed in short order. I think both had overwhelming support.”
Indeed, they did. The Mississippi Tax Freedom Act, touted by the speaker for two years, passed 97-12, with all the no votes coming from a minority of the 43-member Democratic caucus. Nine Democrats either did not vote or voted present. The START Act (the Strategically Accelerating the Recruitment and Retention of Teachers) passed 114-6, with six members of the 77-member Republican caucus voting against it.
House Ways and Means Chair Trey Lamar, R-Senatobia, who presented the tax bill to the House members, pointed out that passing both bills on the same day sent a message that the Legislature could enact the historic tax cut and still meet the needs of the state.
House Education Chair Richard Bennett, R-Long Beach, said the teacher pay proposal would provide a raise of $4,000 for all teachers — and more than $6,000 for some teachers — starting July 1. He said the increase is needed because pay is the top reason young people are not entering the teaching profession.
“We are competing with other states for our teachers,” Bennett told members.
Of the tax bill, Lamar said, “I believe it is time for historic, transformative, game changing legislation. This is absolutely transformative.”
The tax bill would phase out the state income tax in an estimated 10 years to 12 years, reduce the sales tax on food from 7% to 5.5% this July and ultimately reduce it to 4% and cut the car tag tax by 35%. To partially offset the massive cut, the bill increases the sales tax on most retail items from 7% to 8.5%.
When fully phased in, it is estimated that the bill will cut taxes $1.5 billion in today’s dollars. The current state-support budget is about $6.6 billion.
Rep. Zakiya Summers, D-Jackson, unsuccessfully offered an amendment to the tax bill that would have given low-income “working families” an additional tax break. They would have been eligible to receive from the state 15% of the earned income tax credit they receive from the federal government. The earned income tax credit provides funds to low-income working families, based on a number of conditions such as their income and their dependents.
Lamar said he did not rule out working with Summers later in the process to incorporate her proposal once he receives more information on the program.
Rep. John Hines, D-Greenville, said he supported the tax cut bill because “it is an opportunity to give people some relief on buying their groceries and car tags. In Washington County, the biggest complaint we get is on the cost of car tags.”
Plus, he added the passage of the bill is an opportunity to work on “building consensus” in the House. Hines said the bill needs “to be tweaked,” but there is time in the process to do that.
Lamar said there is money to do both the teacher pay raise and tax cut because of last year’s unprecedented 15.9% revenue growth and anticipated double-digit growth for the current fiscal year.
While there was little debate of the proposal on the House floor, One Voice, a nonprofit advocating for working families, said of the proposal: “Working families in the state will still be left to shoulder an even greater burden of replacing lost revenue from the tax cut with increased sales taxes on everyday items. These families already pay, on average, a larger share of their income in sales and property taxes than wealthier households.”
The teacher pay raise proposal, costing about $219 million, would move the starting teacher pay in Mississippi from $37,000 to $43,124 annually compared to $39,897 for the region and $41,163 for the nation, according to information provided by the House leadership.
The bill also provides a $2,000 salary hike for teacher assistants.