By EMILY WAGSTER PETTUS, Associated Press

JACKSON, Miss. (AP) — Mississippi lawmakers are expected to make big decisions about the state’s portfolio in the coming weeks, setting a budget that tops $6 billion and deciding whether to approve tax cuts.

The House and Senate leaders have substantial disagreements over the tax cut proposals. It is not clear that they will overcome their differences, even if the Republicans control both chambers.

Republican House Speaker Philip Gunn said his priority was a complete abolition of the income tax, the source of 34% of state revenue.

Republican Lieutenant Governor Delbert Hosemann says a better idea is to erase some, but not all, of the income tax. He also wants the state to send rebates of $100 to $1,000 to people who pay income taxes — a proposal that could be for a single year or could be extended if Mississippi continues to see tax collections. solid taxes.

Mississippi’s revenue has exceeded expectations in recent months, thanks in part to higher federal spending during the COVID-19 pandemic.

Republican Gov. Tate Reeves pledges to sign a tax cut into law, but the House and Senate must agree on a single plan to send it through. Each chamber passed its own bill.

Senate Bill 3164 would eliminate some of the income tax, while House Bill 531 would phase out the income tax over several years.

Both bills would reduce the 7% sales tax on groceries. Mississippi collects a 7% sales tax on most other items, including clothing. The Senate plan would not change that, but the House plan would increase it to 8.5%.

Both bills would reduce state taxes on car tags, with the House proposing a bigger cut.

“Mississippi has been in last place for a long time, and we’re going to stay there unless we do something bold and daring,” Gunn said Feb. 28 on SuperTalk Mississippi. “We need bold, bold leadership. We need to have the and this income tax elimination is a game-changer.

Gunn said that if the House and Senate don’t agree on an elimination of the income tax by mid-March, he wants Republican Gov. Tate Reeves to call a special session “to eliminate the income tax before spending a penny of any other money. .”

March 26 is the deadline for House and Senate negotiators to establish final versions of the tax and budget bills. The state’s new fiscal year begins July 1, but it’s important for state agencies to know how much money to expect. Schools, for example, will soon start offering contracts to teachers for the coming year.

Hosemann touted the Senate’s tax-cut program as he spoke Thursday at a Mississippi Economic Council event.

“He’s not from a national organization somewhere that doesn’t live here,” Hosemann said in a shot at the house plan.

He said the Senate rebate proposal is fiscally responsible.

“In a time when we have these mercurial increases when money is falling from the skies of Washington … we want to be able to send money back – to people, put it in your pocket,” Hosemann said.

He said the rebates could happen again next year if Mississippi still enjoys higher-than-expected revenue.

Hosemann described the injection of federal money as “a giant bonus” for Mississippi and said the state should make plans for that money, just like a person would after receiving a bonus at work. Hosemann gave the example of an employee with a salary of $75,000 who receives a bonus of $50,000. He asked: Would this person set the family budget at $125,000, assuming that the bonus would show up every year?

“If you did, you might have to move into an apartment,” Hosemann said, “because you lost the house.”

Emily Wagster Pettus has covered Mississippi government and politics since 1994. Follow her on Twitter: http://twitter.com/EWagsterPettus.

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