Mississippi With Large Surplus, Plans to End Income Tax + Teacher Raise

This got missed last week, but here's more Mississippi kicking Louisiana's arse.

Gov. Tate Reeves in his Neshoba County Fair speech on Thursday proposed “an immediate $1,300 across-the-board” pay raise for teachers followed by $1,000 raises for the following two years – all of which would require legislative approval.

The total $3,300 teacher pay raise over three years, coupled with a $1,000 raise lawmakers passed this year, would fulfill a campaign promise Reeves made for a $4,300 teacher pay raise while running for governor in 2019.

As late as 2015, Mississippi ranked 49th in the nation in teacher salary. Currently, the state ranks 37th. With the proposed raises, Mississippi will rank 21st.

the “Mississippi Tax Freedom Act,” would exempt most Mississippians from individual income taxes in its first year, and totally phase out the tax over 10 years or more depending on growth “triggers” being met.

Gunn says that for individuals under his plan, “$1,500 stays in your pocket right off the bat, and for a married couple that is $3,000 that stays in your pocket.”

“In five to seven years, we raise that exemption to $100,000 per taxpayer, $200,000 per couple, and that would be $9,000 that stays in their pockets,” Gunn said. “That’s real tax relief. That will help attract young people, help make them stay or at least give them a reason to stay in Mississippi.”

It would phase out the income tax through exemptions. In the first year, the personal income exemption would increase to $47,700 for individuals, $95,400 for joint filers. This, Gunn said, would mean that 60% of Mississippians would pay no income taxes starting in the first year.

For each year after, exemption increases would be funded by any revenue growth over 1.5%. Gunn said that given historic growth data, this should totally exempt all taxpayers within 10 to 12 years.

“Growth in Mississippi over the last 10 years has averaged 3.2%,” Gunn said.

To offset the revenue lost from the income tax exemptions, Gunn’s plan would increase the state sales tax from 7% to 9.5% on most retail purchases.