Current:Home > FinanceMississippi governor intent on income tax cut even if states receive less federal money -Ascend Finance Compass
Mississippi governor intent on income tax cut even if states receive less federal money
View
Date:2025-04-20 07:22:49
JACKSON, Miss. (AP) — Mississippi Republican Gov. Tate Reeves said Wednesday that he will continue pushing lawmakers to phase out the state income tax, even with the possibility of federal spending cuts that could affect states after Donald Trump begins his second term as president.
Mississippi is one of the poorest states in the U.S., and it receives billions of dollars a year from the federal government. One of the biggest chunks of federal money is for Medicaid, a government health insurance program for low-income residents.
“To the extent that the federal government wants to reduce federal funding — and I think they should — they need to give states more flexibility on what segments of the population are covered and which ones are not,” Reeves said of Medicaid.
Reeves, who spoke during a news conference Wednesday, has supported Trump since the 2016 election. Trump said Tuesday that he had chosen Elon Musk and former Republican presidential candidate Vivek Ramaswamy to lead an effort that could significantly reduce spending and the size of the federal government.
About 42% of the money for state government services in Mississippi is coming from the federal government during the budget year that began July 1, according to the nonpartisan Legislative Budget Office. That is about $13.2 billion out of nearly $31.7 billion. About $6.5 billion of the federal money was for Medicaid.
The individual income tax is expected to generate about $2.1 billion for the state this year, behind an expected $2.9 billion from the sales tax, according to the budget office.
Mississippi is already in the process of reducing its personal income tax under a law Reeves signed in 2022. The state will lower its top rate to 4% in two years.
Reeves has long said Mississippi should eventually eliminate its income tax to compete with Florida, Tennessee and Texas, which don’t levy the tax. Republicans control the Mississippi Legislature. House Speaker Jason White has said he supports phasing out the income tax, while Lt. Gov. Delbert Hosemann has said the Senate will propose reducing the 7% sales tax on groceries.
In July, Republican Gov. Sarah Huckabee Sanders of Arkansas signed legislation that will reduce her state’s income tax to 3.9%. Louisiana lawmakers are in special session this week to consider reductions to the state’s income tax, possibly to 3%.
“We are in a competition for new business and new industry, and it is a competition that we’ve got to be aware of,” Reeves said. “And if we want to continue to see the kind of economic development successes that we’ve had, we’ve got to be competitive from a tax standpoint.”
Reeves on Wednesday announced $110 million for infrastructure upgrades at potential industrial sites and projects for worker training, tourism and conservation. The money came from the state government and other sources, including the Appalachian Regional Commission, the Delta Regional Authority and a federal fund established after the 2010 oil spill in the Gulf of Mexico.
Mississippi needs to be ready to compete with other states when industries are looking for places to develop, the governor said.
“Most of the challenges we have in Mississippi could be solved by every single person here having both the skills that they need and the opportunity for a job that pays 60- or 70- or $80,000 a year, and that’s what we’re focused on,” Reeves said.
veryGood! (2)
Related
- Federal hiring is about to get the Trump treatment
- Chloë Grace Moretz shares she is a 'gay woman' in Kamala Harris endorsement
- Pete Davidson Shows Off Tattoo Removal Transformation During Saturday Night Live Appearance
- Target transforms stores into 'Fantastical Forest' to kick off holiday shopping season
- Head of the Federal Aviation Administration to resign, allowing Trump to pick his successor
- Alabama Mine Expansion Could Test Biden Policy on Private Extraction of Publicly Owned Coal
- Alabama Gov. Kay Ivey treated for dehydration at campaign rally
- 'Unless you've been through it, you can't understand': Helene recovery continues in NC
- Federal hiring is about to get the Trump treatment
- ‘Bad River,’ About a Tribe’s David vs. Goliath Pipeline Fight, Highlights the Power of Long-Term Thinking
Ranking
- Trump wants to turn the clock on daylight saving time
- Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, Nice Comeback
- What time does daylight saving time end? When is it? When we'll 'fall back' this weekend
- Opponents use parental rights and anti-trans messages to fight abortion ballot measures
- Travis Hunter, the 2
- Federal Regulators Waited 7 Months to Investigate a Deadly Home Explosion Above a Gassy Coal Mine. Residents Want Action
- In the heights: Generations of steeplejacks keep vanishing trade alive
- Sister Wives’ Janelle Brown Confronts Ex Kody Brown About Being Self-Absorbed” During Marriage
Recommendation
Justice Department, Louisville reach deal after probe prompted by Breonna Taylor killing
Millions may lose health insurance if expanded premium tax credit expires next year
Election Day forecast: Good weather for most of the US, but rain in some swing states
Do high ticket prices for games affect sports fan behavior? Experts weigh in.
Bodycam footage shows high
Social media users weigh in on Peanut the Squirrel being euthanized: 'This can’t be real'
EPA Gives Chicago Decades to Replace Lead Pipes, Leaving Communities at Risk
Families can feed 10 people for $45: What to know about Lidl’s Thanksgiving dinner deal