Mississippi Senate leaders have said a House plan to eliminate the state income tax over about a decade was foolhardy, and instead proposed a much longer, more cautious approach.
But the Senate had a few typos in the bill — errant decimal points — that instead of drawing out the phase out of the income tax would speed it up, nearly as fast as the House proposal, multiple lawmakers confirmed to Mississippi Today.
The House ran with it. It realized the Senate’s error and passed the measure on Thursday.
Now, if the House leadership wanted, it could send the measure to Gov. Tate Reeves, who could sign it into law. The measure was held on a procedural motion that could allow the House to reconsider and continue negotiations.
Legislative leaders and Gov. Tate Reeves went radio silent after the House unexpectedly concurred with the Senate proposal on Thursday morning. Early Thursday afternoon, House and Senate leaders were meeting behind closed doors, and many lawmakers had no idea about the snafu.
Later Thursday afternoon, Reeves posted on social media that he was looking forward to receiving the bill on Friday and signing it into law and, “Today is a day for celebration!”
Hosemann and White’s offices on Thursday afternoon did not immediately respond to a request for comments about the situation.
The intent of the Senate’s “cautious” plan to eliminate the state individual income tax over many years would only eliminate it if economic growth “triggers” were met. After an initial four-year reduction in the income tax rate, the triggered phase out would require revenue growth to far outpace spending.
But instead of saying revenue growth over spending reached 85% of the cost of a drop in income tax, the bill accidentally said .85%. This means a very small amount of growth would trigger large income tax cuts, eliminating it far quicker than the Senate had wanted. Similar typos were in other metrics of the trigger language.
Jared Walczak, Vice President of State Projects at the Tax Foundation, said the error could have harmful consequences for Mississippi’s economy.
“If implemented as-is, the law could trigger tax cuts when Mississippi can’t afford them,” Walczak wrote in a social media post. “Twenty-eight states have cut (personal income tax) rates since 2021, including Mississippi. They’ve mostly done so responsibly. With this drafting error, the Mississippi legislation would break from that pattern of responsible tax relief and could put the state in a very rough spot.”
It’s unclear whether the House would really send a bill with obvious unintentional flaws — dealing with a major overhaul in the state’s taxation — to the governor.
Another bill remains alive — the one with the House’s most recent counter offer — before the Senate.
Lawmakers could reconsider passage of the bill with typos, or let it die, and hold more negotiations between the House and Senate. Or, both chambers could unanimously agree to fix the typos and send what the Senate originally intended to the governor.
Or, the largest tax cut in Mississippi history, coupled with one of the largest (gasoline) tax increases, could become the law of the land because of a few typos. If it did become law, lawmakers could come back sometime in the next four years before the growth triggers take effect and change them.
In Reeves’ social media post he said: “I hear there are those who desire future tweaks to this law, and those can certainly be considered in future legislation.” He thanked White and House Ways and Means Chairman Trey Lamar.
The post OOPS! Senate sent House an income tax bill with typos. House ran with it. What’s next? appeared first on Mississippi Today.
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