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Last year, when it was Lt. Gov. Delbert Hosemann’s turn to run the Legislative Budget Committee, House Speaker Philip Gunn was anxious to raise the state’s revenue estimate to grease the skids for his proposal to eliminate the income tax.
This year, Gunn’s turn to run the LBC, Hosemann wants the estimate upped to help his proposal to fully fund K-12 education.
But Gunn says he does not intend to call a meeting of legislative leaders during the final days of the 2023 session to raise the revenue estimate to give lawmakers more money to budget for the upcoming fiscal year, beginning July 1.
What a difference a year makes. This time last year, Gunn was urging Hosemann to call a meeting of the Legislative Budget Committee to raise the revenue estimate.
A key difference is that last year Gunn wanted to raise the revenue estimate to ensure enough money was available to enact the income tax elimination that he and Lt. Gov. Tate Reeves coveted.
Gunn, who is not seeking re-election this year and ending his historic tenure as the first Republican speaker in the modern era, was hoping to increase the scope of the tax cut this session. But the plan was scrapped after it was rejected behind closed doors by a sizable portion of his own Republican caucus.
Now Hosemann is wanting the revenue estimate raised, in part to make it easier to enact a plan to put an additional $181 million in kindergarten through 12th grade schools and achieve full funding of the Mississippi Adequate Program for only the third time since 2003. MAEP is the funding formula that provides the state’s share of most of the basic needs of local school districts, such as teacher salaries, utilities and textbooks.
Gunn, who has the power to call the meeting this year, says he has no intention of doing so.
“No. We don’t see any reason to adjust it (revenue) at this point,” Gunn said late last week as he headed from the House floor to a meeting.
A little background might help. The speaker and lieutenant governor alternate in chairing the 14-member Legislative Budget Committee. Hosemann chaired the panel last year. Gunn is the chairman this year.
Each year in the fall the Budget Committee along with the governor meet to decide on a revenue estimate that represents the amount of money available for the Legislature to appropriate during the upcoming session for the next fiscal year that begins on July 1.
The politicians rely heavily on the recommendation of five financial experts, including the state economist and treasurer, in making the estimate. But since the estimate is of the amount the state is going to collect during for the next fiscal year, beginning in July, it is educated guesswork at best.
The Budget Committee for years has normally re-assembled in the midst of the final days of budget negotiations between House and Senate leaders to revise the estimate. They argue the later meeting during the final days of the legislative session gives the state’s financial experts an opportunity to glean more information on the outlook of revenue collections for the upcoming fiscal year.
Last year Hosemann finally called a meeting on the Friday before the weekend that was the deadline for House and Senate leaders to agree on a budget.
The legislative session is now in the final week before the deadline weekend. So, if Gunn is going to call a meeting, this is when it would occur, though he says he is not.
For a little comparison, through February of last year, seven months into the fiscal year, state revenue collections were $768.4 million or 21.5% above the estimate. During that time, the state had collected $433.3 million or 11.06% more that it collected during the same time period in the previous fiscal year.
Mississippi, like most states, has experienced and continues to experience unprecedented revenue growth. This year, revenue collections are $524.4 million or 12.4% above the estimate through February or $395.8 million or 9.1% above the amount collected the previous year.
Granted revenue collections have slowed slightly. But in past years, state leaders would have jumped at raising the estimate based on such strong collections.
And it is safe the say that if Gunn’s income tax cut was on the table for consideration during the final days of the session, he also would be jumping to call a meeting to raise the estimate.
In January on Supertalk radio, Gunn was still pitching his income tax elimination plan.
“We had about $800 million more than we were even spending, and I advocated that it was time to give some of that back to the taxpayers,” he said at the time. “We are collecting more revenue from our citizens than we’re even spending, let’s return some of that to the taxpayers.”