As Mississippi legislative leaders contemplate additional tax reforms in the coming 2025 regular session of the Mississippi Legislature, the spotlight has been on additional state income tax cuts and yet another examination of reducing the state’s highest-in-the-nation 7% grocery tax.
Mississippi House Speaker Jason White has already talked of focusing his efforts on additional reductions in the state’s income tax and cutting the state’s grocery tax. In recent years, lawmakers have enacted a $525 million income tax cut – the largest in state history – set to be fully implemented over two years. Generally absent from tax cut debates in Mississippi is the topic of property taxes. Why? It’s the fact that property taxes in Mississippi are primarily the province of county and municipal governments, so legislative debate on property tax issues is neither frequent nor particularly enthusiastic unless fueled by local government advocates. Based on national 50-state comparisons, Mississippi property taxes are considered in the lower third of the states and as a business climate indicator is ranked 37th by the Tax Foundation. One of the reasons that property taxes are low here is that state leaders determined that one way of holding property taxes low for property owners was to shift to a first-in-the-nation retail sales tax in 1934. Mississippi’s property tax policy – including homestead exemption, economic development exemptions, industrial exemptions and other rules – creates an environment in which property tax rates remain low. The bottom line is that property taxes have historically remained low due to low property valuations in Mississippi.
That status is evolving in Mississippi as it has in other parts of the country. Property values are increasing here and in some venues across the state, those increases are dramatic. Inflationary influences are also at play. In Mississippi, as in most states, increased home values will result in higher property taxes even if no increase in the property tax rate is levied. Higher home values equal higher taxes. Again, local governments take the lead in property taxes and are dependent on the revenue. How dependent? The Lincoln Land Institute, a non-profit foundation, sums up the relationship as follows: “The ad valorem tax, or property tax, comprises the primary source of revenue for each of the 82 counties within the state of Mississippi. Municipal governments and public schools (K-12) also rely on property tax collections, with schools using property taxes to fund approximately a third of their budgets. The state relies heavily on the sales tax, and municipalities receive a portion of the sales taxes generated within their city limits. Mississippi taxes personal property as well as real property. In 2021, personal property taxes accounted for 29.4 percent of its tax base, a higher share than any other state classifying personal property.” So, when state government leaders talk about cutting the grocery tax or other sales and use taxes, local governments fight those efforts by saying that if the cuts are implemented, local governments will be forced to raise property taxes. The historic success of the Mississippi sales tax in broadening the state’s tax base during the Depression gave it life well after the nation’s economy recovered and the state’s property taxes were the beneficiary. The shift of the tax burden from primarily property owners to all citizens was intentional. Stateline.org reports that there are currently ballot initiatives in at least eight states (Arizona, Colorado, Florida, Georgia, New Mexico, North Dakota, Virginia and Wyoming) seeking to implement property tax reforms. In addition, legislators in other states have put forth property tax rebate legislation while some have introduced bills to adjust property assessments. Jared Walczak, vice president of state projects at the pro-business Tax Foundation, told Stateline he expects many other states to follow suit. The same observation made in January still holds: Given Mississippi’s status as having Republican super majorities in both houses of the Legislature and GOP strength in many of the state’s counties with the highest property values, can a showdown on property tax relief be too far in our future? And how long can lawmakers avoid a fix of the state’s flawed ballot initiative process? Sid Salter is a syndicated columnist. Contact him at sidsalter@sidsalter.com.
22 comments:
Mississippi will take a leadership role in any effort to provide tax relief to property owners, especially BIG property owners. After all, ain't this historically "de land ob cotton" and can't we just increase the tax on groceries or something else that's essential to po' folks to make up the difference? Why not?
Mississippi is the poorest state in the union with the highest sales (food) tax in the country. I have a suggestion, remove at least half of those drunken legislators and reduce the pay for those remaining. This will eliminate about 75% of the legislative costs and get things done in an expedient way. Of course, this will have a negative effect on the bars and liquor sales people.
I’m for tax cuts as long as we cut an equal amount of do-nothing state government jobs. Too many obese, surly, and worthless state employees wasting time on Facebook and Jackson jambalaya all day, sucking the tax payer dry and producing nothing of value.
@ 8:28
Hopefully you are retired and not at your highly efficient, high pressure, work-your-fingers-to-the-bone private sector job while reading JJ.
Hell, ad valorem millage is about the only revenue source available to cities and counties to cover the massive unfunded mandates crammed Dow their throats every year by the state legislature
If you cut sales tax then counties and towns will increase the property taxes. Look at TN. No sales tax but double our property tax. I think we should keep sales tax at least we are getting money from the cash society and if someone visits from out of state they pay in. I have some land and it costs $3,000 for just property tax to grow some pine trees of which haven't gone up in value for 8 years.
Everybody from Gerard to Horne to Salter to Crawford to Flaggs, Gallo and Stokes bemoans the would-be plight of municipalities should the grocery or other sales taxes be reduced.
And that same bunch of moaners constantly mentions the 'grocery taxes on poors'. Yet not a damned one of them will ever research or touch the subject of the hundreds of thousands of 'grocery shopping poor' who pay ZERO taxes on groceries. Including those who live near our borders and drive to Mississippi to hit the Wal Marts.
Every small town and rural grocery store in this state relies on EBT purchases and there is NO tax applied to those receipts. That's fine but acknowledge and include those figures and realities in the discussion.
Raise taxes on beer, wine, liquor, tobacco products, vape shops and medical marijuana
What taxes do the unemployed lazy poors pay, but grocery sales tax?
TN has sales tax. You must mean income tax. Yes, the Rich and their lobbyists lie about the really rich getting huge breaks on income and the little people or tourists make up the difference. Stupid to do so. Look at Flowood now with 8% sales tax already.
The magical "Tax Cut Fairy'" here is always finagling for the really Rich to get even more tax breaks, to the point of destroying the middle class. This blog is sponsored in part by a guy found to have tried to dodge taxes overseas. Same with Tater and the Richie Rich Income Tax dodge.
The middle class again will bear almost all the taxes while the 1% have an even lower effective tax rate. And the working class will continue to pay 0 FIT AND get a fake "refund" from middle class FIT via EITC. So they'll grunt approval in their stupidity. Both ends against the middle class. Both parties.
Yes, lets lower the tax on things I like and raise taxes on things I do not like. Why not get rid of the mass of useless govt. workers that eat up our tax money. Why do we allow our politicians to hire their worthless friends and family? When they do that they then have to hire two more people to undo the mess and do the work the useless people were hired to do.
Cut taxes, reduce the size of state government, and the economy will respond favorably. This has been proven again and again, whereas a bigger government (with all the bureacracy and regulations that go with it) and higher taxes have a profound negative effect on the economy, specifically with business development (job retention and job creation) and individuals (allowing people to keep less of what they earn).
I bet Sid is hearing a lot of talk in Starkville by folks dreading how much their property taxes will go up because their property values have skyrocketed the past few years. Same goes for Oxford.
While you are at it, have no more administrators to equal half of the teachers in the classroom. All of education is overrun with administrators.
11:05, our state government general fund budget has been growing like a weed for two decades. And have you seen how many buildings our state government has built over that time? Our leaders talk a good game, but reducing state government is not reality.
Year 2011 General Fund revenues were $4.8BB. Eight years later under Phil and Tate, they were $6.1BB. About 3% per year growth. So definitely not shrinking government.
Year 2019 General Fund revenues were $6.1BB. Four years later they were $6.6BB. About 2% growth annually. Considering the Covid silliness, I'd say Tate and this group has done a slightly better job of not growing government.
https://www.wlox.com/2024/08/21/attorney-questions-why-msu-football-player-not-charged-months-after-allegedly-attacking-fellow-student/
@ 8:44 - here's a challenge: Name three such from this last year. Or, if you can't do that, name three from the previous year. Failing again, try to name three total from the last two years.
I'll wait.
Why? Because those are things you oppose? See you Sunday, you proselytizing hoot.
Excellent correlation made.....and likely true.
@5:38pm Let me answer they pretty easily:
1) Department of Education
2) IHL/MCCB
3) PERS
All three provide thousands of useless "jobs" for people with very little actual skill or ability, and they literally feed each other from kindergarten through college graduation all in the name of "it's for the children" - in reality they are all used as conduits for gabillions of federal dollars being drawn down. It's all a ponzi scheme but disguised as "edumacating" the children. Oh, and the press has even swallowed the lies churned out by their agency heads and executive branch politicians....but in reality, the rot in those systems is not different than Jackson's water treatment woes that have been developing (and ignored) for decades due to bumpkin idiots being elected to office repeatedly.
Did y'all hear the state joke about the cow with its head caught in the fence?
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