House Speaker pitches $270 million infrastructure tax swap plan
Mississippi House Speaker Philip Gunn pitched his infrastructure plan that could add $270 million or more annually to the state's efforts to repair or replace aging roads and bridges Monday and took a subtle dig at Lt. Gov. Tate Reeves in the process.
Gunn said at the Stennis Capitol Press Forum that his plan would involve eliminating the state's 4 percent income tax bracket in exchange for a 2 percent increase in the state's gasoline and diesel taxes over a four-year phase-in period and sending some of the state's use tax revenues to counties and cities for road and bridge repair.
His tax proposal does have a component that could prove unpopular, as the gasoline tax would be indexed to the inflation rate after its complete phase-in. This means there would be automatic tax increases without legislative intervention every time the rate of inflation increased.
Reeves said in response last week to Gunn's plan that "I'm a Republican. I'm a conservative. And I am against raising anybody's gas tax"
Gunn, while not directly criticizing the lieutenant governor directly, said "I am a conservative. I am a Republican. I am not for raising anybody's taxes. But I don't stop there. I'm for showing leadership, and for solving a problem."
He also described Reeves' infrastructure plan, the so-called BRIDGE Act, as "hollow, non-existent dollars." The BRIDGE ACT died in conference between the House and Senate.
The proposed tax shift by Gunn could mean $160 million (using this year's revenue figures) would be directed to infrastructure needs. The gasoline tax would add up to 26.4 cents per gallon and would increase 2 cents per year until the phase-in was complete.
"Statistically, it's a dead-even swap," Gunn said. "If you shift $160 million dollars from the backs of the income tax payers and shift it to those who are using the roads and, in all fairness, should be paying for the use of the roads, you have diluted that burden among a broader burden of people. You have more people helping pay that $160 million."
Mississippi residents pay 37.19 cents in state and federal taxes on every gallon of gasoline, about 11 cents a gallon less than the national average. The state’s gas tax was last increased in 1987. The federal gas tax has been 18.4 cents per gallon since 1993.
Gunn's proposal would make Mississippi's gasoline tax go from being the lowest among neighboring states to being the highest. According to the Tax Foundation, the state's gasoline tax is 46th lowest and increasing it to 26.4 cents per gallon would make it the fourth highest in the southeast behind Florida (36.8 cents per gallon, North Carolina (34.55 cents per gallon) and Georgia (31.09 cents per gallon).
Gunn's plan would also involve passage of House Bill 722, which would've directed part of the state's use tax revenues to road and bridge repair.
This year, use tax revenues amounted to $315 million and the proposal would've given about $47 million to cities and $47 million to counties, with the rest going to the Local System Bridge Replacement and Rehabilitation Program fund.
For Mississippi's 82 counties, that would've added up to $573,170 for each. The measure passed the House unanimously, but died in the Senate Finance Committee without getting a floor vote.
The House Speaker says that the shift would be one from a regressive tax to a use tax, which he says are tax policy ideas supported by both the non-partisan Tax Foundation and the conservative American Legislative Exchange Council.
Last week, Gov. Phil Bryant issued an executive order that mandated the closure of 106 bridges, mainly county-owned ones, after receiving a letter from the U.S. Department of Transportation. By keeping the substandard bridges open, the state could face the possible loss of federal highway money and closure of some of the bridges began Monday.
There might be some limited help on the way, as a bond bill that includes $50 million for bridge repair was signed into law by Bryant Friday.