Work job creation should be the state’s top priority, Mississippi Lt. Gov. Tate Reeves said during his appearance Tuesday before a joint luncheon of the Lowndes County Republican Women and the Columbus Rotary Club.
Reeves, the architect of the Taxpayer Pay Raise Act of 2016, said cuts from the act will stimulate job growth by making Mississippi more attractive in recruiting new business and industry.
Almost two-thirds ($260 million) of the $405 million tax cut goes to corporations through the elimination of two taxes — the inventory tax and franchise tax.
“Both of those taxes were taxes Mississippi had that Alabama didn’t have, Tennessee didn’t have, Arkansas didn’t have and Louisiana didn’t have,” Reeves said. “Those taxes made us less competitive and less attractive. Businesses aren’t just looking at the Golden Triangle or the state of Mississippi. They are looking at places in Alabama and Arkansas and Tennessee and Louisiana. We had a tax our competitors didn’t have, which means businesses coming here would have a cost of doing business they don’t have in those states.”
Prior to the tax cut, Mississippi’s corporate tax rate (5 percent) was already lower than that of Alabama, Arkansas and Tennessee (6.5 percent) as well as Louisiana (8 percent).
Reeves said other legislation passed during his tenure as lieutenant governor, which began in 2012, includes pumping more money into education and reducing the state’s debt.
“It used to be that people were out looking for jobs,” Reeves said. “Today, there are jobs looking for people. That’s why we have to raise our educational achievement in the state. There are 48,000 job listings on the state website, (employers) looking for people with the right skill set, not for the jobs of 30 years ago, but for the jobs of the future.
“In response to that, we’ve spent $400 million more on education than we did six years ago,” he added.
Reeves also said the state has proven its fiscal responsibility by dramatically reducing the state’s debt.
“In 2004, debt service as percentage of the state budget was 10.5 percent,” Reeves said. “Today, it’s 6.5 percent. Why is that important? Every dollar we spend on principal and interests is a dollar we can spend on the vital services the state provides. Just by doing that, we’ve freed up 4 percent of our annual operating budget, about $240 million dollars, almost all of which has gone to public education.”
Reeves’ claims seem to dispute the findings of State Treasurer Lynn Fitch, who in February said the state’s bond debt has grown by $1.3 billion between 2006 and 2016. Fitch said the state did not pay the full interest on the state’s $4.4 billion in bond debt in 2016.
Reeves said the state’s budget is in its healthiest state since the mid-1990s when the arrival of casino gambling produced double-digit gains in revenue.
“Our rainy day fund is over $300 million today,” he said.
Noting the state is observing its bi-centennial this year, Reeves said Mississippians should use the occasion to celebrate the state’s successes.
“I believe we ought to spend a lot less time apologizing and a lot more time bragging about the good things going on in Mississippi,” Reeves said.
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected].
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