Wednesday, August 22, 2018

Sid Salter: Special Session Promises New Funding Sources after GOP Tax Cuts

The proceeds from a new state lottery? A dedicated portion of the new online sales tax collections? A portion of gaming revenues from the newly minted sports book in Mississippi casinos? Borrowed or bonded revenues? Maybe a portion of the BP oil spill settlement funds as well?


The 2018 special session of the Mississippi Legislature is shaping up to be a mixed bag of new and alternative revenue measures some two years after Gov. Phil Bryant signed the largest tax cut in state history into law in May, 2016. The tax cut package, known as Senate Bill 2858 or the “Taxpayer Pay Raise Act,” represents a 10-year package of tax cuts that when fully deployed over 10 years will do three main things.

First, it will eliminate the 3 percent individual income and corporate income tax brackets. Second, the tax cut package eliminates the corporate franchise tax. Third, the plan allows self-employed taxpayers to exempt themselves on their state tax returns from a portion of their federal self-employment tax.

The state’s business lobby almost unanimously applauded the Republican-backed tax cut package as sound fiscal policy and as one that would spur investment, job creation and bring Mississippi into a far more competitive economic development posture with the majority of competing states in the South.

Democrats in the Legislature questioned the wisdom of eliminating the franchise tax, point to the average annual $260 million it was bringing in at a times when the state was struggling to meet revenue estimates. More to the point, detractors of the plan cited projections suggesting that the GOP tax cuts would reduce state revenue $46.5 million in Fiscal Year 2019, $70.8 million in FY 2022, and by full implementation in 2028, an annual $415 million.
This week’s special session offers alternative revenue measures that certainly won’t fully offset the 2016 tax cut package, but it does appear to be a plan that can stabilize state government finance – and not just in the guise of addressing infrastructure needs.

Earlier this year, the Supreme Court brought online sales and use tax law fairness to mom-and-pop merchants on Main Street who had long been at a 7 percent price disadvantage in Mississippi in competition with out-of-state online retailers. In doing so, it gave the Legislature political cover to do something most knew they already needed to do – to stanch the certain decline of traditional sales tax revenue as online sales increased.

Giving a healthy portion of those online sales and use tax collections to city and county governments makes sense in terms of helping those governments avoid hiking local taxes. In Fiscal Years 2016 and 2017, sales tax collections accounted for 38 percent of the state’s General Fund receipts as the State Department of Revenue collected $2.062 billion in sales taxes in FY 2016 and $2.055 billion in 2017. Twenty years ago, that General Fund percentage was 41 percent.

A state lottery has been favored by a majority of Mississippians for more than 30 years according to polling. Mississippi lawmakers resisted, first on religious grounds and later to protect the interests of the dockside casinos they approved in 1990 and later saw expand. Studies and industry estimates claim that a Mississippi lottery would generate between $100 million to $150 million in general fund revenues and slow or stop state taxpayers from going across state lines to buy lottery tickets in Louisiana, Arkansas, Tennessee and Florida.

With the introduction of the sports book into Mississippi casinos and a head start on other states to boot, the lottery vote becomes easier for lawmakers because the sports book is likely to generate far more casino industry revenue gains that a lottery program would take away from them.

The apparent BP oil settlement compromise was a big part of getting the Legislature on the same page. So is the promised of $300 million in bonded or borrowed funds.

Finally, there comes the fact that the state’s infrastructure is in dire straits and no one in the executive or legislative branch of government wants to wage 2019 campaigns with the issue unaddressed and with no firm plan in place to at least offer hopes of improvements.

Like the tax cut package in 2016, the 2018 alternative revenue package is still evolving and there are no guarantees. But the special session package appears to move the state’s long term government finance footing on far more solid ground that it was at the end of the 2018 regular session.

Sid Salter is a syndicated columnist. Contact him at sidsalter@sidsalter.com.

21 comments:

Anonymous said...

Incompetent people in charge.

They aren’t ignorant it’s that they have a fundamental misunderstanding of the role government does play in our lives.

Rs seek to kill all government without thinking of consequences.....and here we are....broke and having to play catch up.

History will not write good things about our current leaders.

Anonymous said...

If Sid speaks and no one listens, did Sid really speak?

Anonymous said...

This all should have been done during the regular session, minus the sports gambling.

They can wrap this up in 2 to 3 days.

But the positives will be keeping Mississippi dollars in Mississippi with the state lottery. Then recouping some of those dollars we lost to neighboring states with the sports gambling in the short term.

Anonymous said...

"Cha ching," exclaimed Sen. Ben Dover.

Anonymous said...

To all your servile lottery types who do not have the brain power to understand what a total drain it will be on our state:

Let's take the proceeds from sports book and dedicate it to all these damned funding needs you say will be obliterated by the idiot tax and track it for a year. Then, when all the money is being redirected to things like $2 million private roadways to Dogwood because it flows into the general fund, let's see if you'll still argue that starting a lotto will fix everything.

Of course you will, because you are starry-eyed fools who cannot accept that the lottery is the government of the state of Mississippi encouraging its citizens to piss away their money - money that was given to many of them by the state in the first place. So hell! Let's add a way to make our poorest citizens poorer. It'll keep money in state, so f*ck it!!!!

That is your sole argument, and it's stupidity on steroids. If you feel the need to throw your money down a rat hole, do it in Louisiana.

Anonymous said...

8:24 am The rest of us don't care whether you like Sid or not.
We don't understand why you can't just skip his post.
Have you nothing better to do than bother us with your list of people you dislike?
We can decide for ourselves without your help. Indeed, you clearly aren't someone whose help we would seek.

Pyrite said...

Powerball draws for $60 million tonight. I gotta hurry over to Delta, LA... bye

Anonymous said...

So what is your solution @11:00 AM?

Anonymous said...

@ August 22, 2018 at 8:24 AM

Totally agree with you, but for some reason our fellow neighbors disagree with us and keep electing the same type of "conservative" leadership year after year and wonder why our state never gets credit for doing anything right.

@ August 22, 2018 at 11:00 AM

"That is your sole argument, and it's stupidity on steroids. If you feel the need to throw your money down a rat hole, do it in Louisiana."

Dude, you sound like some freakin' bible thumper speaking for prohibition!?

Phil Bryant says you have to run government like a business, so from a business stand point - do you think Herrin Gear Toyota tells a person thats looking for a Ford Pick-up truck to go down to Watson Quality Ford!? Hell no - they are either going to try and sell them on a new/used Tacoma or Tundra first, and if push comes to shove they'll find them a USED Ford Truck in damn fine shape, in other words - once that person hits that lot - they are trying to keep their dollars from going elsewhere

You would be the sales person to send them down to Watson Quality Ford!? SMH

Who the hell would tell someone to go piss their money in Louisiana, when they could stay right here in Mississippi!? Probably a legislator from Louisiana that's worried about Mississippi passing a lottery and those revenues stop coming across the border!? LOL!!!



Anonymous said...

“Do it in LA”. As if to compare it to what? dancing?? drinking a beer?? Oh lawwwwd, where’s my fainting couch?!

Anonymous said...

That car dealer analogy was the dumbest thing I have read on here in a long time...REEEEEEEEEEEEEEEEEEEEEEGARDLESS! Someone went to the Joe Usry school of Government and Economics.

Lottery is a dumb dumb DUMB idea, and it has fuck all to do with Bible thumping or religion. I'll say this as slowly as I can so those of you who think the lottery is winnable can keep up.

The lottery is a state government waging a war of propaganda and disinformation against its citizens to compel them to throw their money away.

Apply that to Mississippi, where a significant number of people are on government assistance, and you have a vicious cycle.

Put simply, in deference to you lottery whores, it's like trying to bail water with a leaky bucket.

So, let's say you're paying out $100 million to indigent citizens, but bringing in $150 million in lotto. But now the indigent listen to your ads imploring them to piss away their money, so they do. Now these people are needing more money because what used to pay for food and clothing has gone to worthless pipe dreams, so your budget increases to $130 million, a good chunk of which is funding lottery receipts. The lottery income then rises to $170 million, so the numbskulls thing it's an increase in revenue, without realizing that the cost of helping the poor has increased at a greater rate.

Yes, it's an over-simplistic analogy, but given the simplemindedness of the "hurrrr let's keep those dollars in state!" crowd, a simplistic analogy is necessary.

It's called mathematics, but keep blaming it on Bible thumping. It's about all you can do.

Anonymous said...

To 11:00....If it is so bad why are 45 of 50 States doing the lottery?
OR maybe you just don't understand....

Anonymous said...

to 12:08....I have already been today to get my tickets....ALL of Tags in the park-in-lot were from MS...LA people buy them ANYTIME they like....They don't have to fight the crowds!!!!

Anonymous said...

Here's how Mississippi can have a lottery today. Instead of driving to Mound to buy tickets, write a check to the state of Mississippi and designate it for whatever project you wish (e.g. Potato's Private Road Fund). Here's what will happen.

You will be poorer.

You will be handing your money to the state for literally nothing in return.

The Legislature will have more money to spend on whatever they want to and will disregard the designated purpose of the funds.

You will win absolutely nothing.

It's just as if you had given it to a sleazy convenience store owner across the river.

The Mississippi Lottery - play responsibly.

Anonymous said...

Sid conveniently does not mention the fact that in Mississippi retirement income is exempt from income taxes. Wonder how much this costs?

Anonymous said...

@ August 22, 2018 at 5:03 PM

You are really special!?

"The lottery is a state government waging a war of propaganda and disinformation against its citizens to compel them to throw their money away."

You know what makes it so bad, I can pretty much guarantee this person works for the state!?

Look here small fry, if Louisiana, Tennessee, and Arkansas did not have lotteries you would have a point. But they do and our citizens, in Mississippi, go across the state line to put money in those states coffers.

The state of Mississippi has been waging war on the, as you say, "INDIGENT" people for quite some time and no one in the state legislature nor their fellow citizens have given a rats tail about their living conditions, cost of living, wages, access to healthcare, access to jobs with livable wages, levels of education in their community.

It's been the same ol' talking points - "if they'd just stop being so poor and lazy", "if they'd just go to church", "if only they'd stop being so damn sensitive"

I know its hard for you to not get your way behind this and your going to have a little temper tantrum and call all kinds of people dumb and stupid. But you want to know the beauty in it all, it's safe to assume you that voted for Phil Bryant, Tate Reeves, your conservative legislators - they all agree with me and they will pass this legislation this week. LOL!!!!!!!!

So bye Tristan! LMAO!!!!!!!!


Anonymous said...

@11:00

You're correct. Your brain power far exceeds the brain power of the decision makers of 45 other states. I wish you would have told us about your cute little "lottery conspiracy theory" earlier so that we would not have wasted what little brain power us "plebians" have left in mulling over the real issues-solutions that plague our great state.

It's sad that so many decent, freedom loving, vigilante pothole fixin, good little Southern Baptists will be forced to drive down that brand new, beautiful highway to that brand new, beautiful exit ramp to only be forced to empty their wallet out on the lottery counter. Slimy gubment!

PS: People like you are the reason our state sucks!

Dee Ray said...

11:51...please provide your name so a few of us can add it the list of people we don't like.

I've finally given up on wishing venereal disease upon those of you who constantly preach about the poor pissing away their meager funds and thereby needing more of the taxpayers' money for food and diapers. What is it that compels these judgmental assholes to constantly preach to us on the evils of gambling and the fate of the poor who fall into traps?

What they're actually saying is this: "Look, I'm smart enough to manage a budget (while pissing away only a small portion of it) and not be negatively impacted by the notion of a lottery, but, on the other hand, most of the rest of you are not."

Plain ol' Catfish said...

Holy smokes - I agree with Dee Ray on something! Mark the damn calendar! LOL!

You tell'ed brother! Preach!

Anonymous said...

To Dee Ray and all you other numbskulls -

The return on lottery spending has been calculated at 47%, so I'll do you one better.

Bring me all the money you were going to spend on lottery tickets and I will give you a much better return on your money, guaranteed. I'll guarantee you a 65% return - no limit.

For every dollar you give me, I'll give you 65 cents back.

Look at it this way: If you spend $1000 on lottery tickets, you get about $470 back (maybe), but give it to me and you get a whopping $650 back, guaranteed. That's $180 more!

AND it'll keep the money in the state, which is apparently a HUGE motivator for you lottophiles. I promise I'll spend it all in Mississippi. Trust me.

That's lottery math, baby! Give me all your money and I'll give you way more back than the state.

Play responsibly.

Kennie Rawgers said...

5:35 is a perfect example of a numbskull who thinks he knows what's best for everybody.

What he forgets, in his rush to rationalize, is that every soul who has ever won a powerball lottery or anything similar has done so without any regard whatsoever for return on investment, odds of winning, guaranteed returns elsewhere or assorted goof-balls who point fingers at them for wasting their own money.

Yes...5:35 is the guy who cannot sit still and enjoy an old Western where there's a card game going on in the saloon...he has to pound on his end table and holler about how stupid those people are and how he could guarantee them a better chance of winning.

And by the way, every time you take the old lady out to eat, if she can stand the thought of listening to you, you've spent three times what you would have spent had you eaten at home and not blown all that other money. In fact, surveys show that you can eat at home for 34% of what you spend every time you load up the Volvo and head out to a restaurant.

Shit, man! Chill. Forget your madness and compulsion to preach odds and evils. Leave people alone. There will be winners. But it won't be YOU.

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