, Land Line state legislative editor | Thursday, February 22, 2018
Transportation funding continues to receive a lot of attention at the Mississippi statehouse. Multiple bills halfway through the Legislature take different approaches to address a projected $400 million annual shortfall.
The Magnolia State relies on about $1 billion each year in federal funds and from state sources, including the 18-cent fuel excise tax and truck fees.
The Senate voted 36-14 on Tuesday, Feb. 20, to advance a bill to raise an additional $1.1 billion for transportation over five years. SB3046 calls for borrowing $150 million this year and tapping funds typically earmarked for other budgets to pay for roads, bridges and other infrastructure.
About 60 percent of the revenue would be routed for state needs. The rest would be divvied up between city and county projects.
Critics say the bill does not really raise $1 billion for transportation. Democratic lawmakers cite a provision to initially divert $125 million from the state DOT to other funds.
Lt. Gov. Tate Reeves unveiled the plan earlier this week. He said in prepared remarks “the state can repair its infrastructure without raising taxes and by prioritizing spending on actual needs not administrative costs.”
The bill awaits further consideration in the House.
House lawmakers have already approved multiple bills to raise money for road and bridge work.
The first bill would use $108 million in tax revenue for roads and bridges.
House Democrats supported the Republican-led effort to tap funds from the state’s general fund. The group posted on social media following the vote their view that HB722 is “a first step in providing comprehensive funding for roads and bridges.” However, House Democrats added “we will be vigilant in ensuring that the $108 million it takes from the general fund will not result in cuts to other valuable state services or result in the loss of state jobs.”
Specifically, the bill would divert 35 percent of the state’s use tax collection to cities, counties and a grant program. Cities and counties would split 15 percent, and 5 percent would be allotted to a state fund to provide grants to local governments.
All money would be used to pay for road and bridge maintenance, repairs, and construction.
According to the American Association of State Highway and Transportation Officials, the state has nearly 159,000 total lane miles. There also are more than 17,000 bridges.
The Department of Revenue collects use tax on goods shipped from out of state for use, storage or consumption in Mississippi. All brick-and-mortar stores collect the use tax on purchases. The agency notes that use tax also applies to items purchased inside the state if sales tax was not paid at the time of purchase. In addition, some online retailers voluntarily collect the tax for the state.
The state collects more than $300 million annually via the use tax.
Also approved by House lawmakers is a bill to borrow $50 million. HB357 calls for the money to be split for county and city bridge repairs and replacement.
Separately, HB358 would designate to transportation any amount of tax between $50 million and $250 million collected voluntarily by online sellers. Half would go to the state and half would be split by cities and counties.
One more bill, HB354, would devote 50 percent of general fund growth above 2 percent from the previous year up to $100 million to road and bridge needs. The Mississippi Department of Transportation would claim 60 percent, with counties receiving 25 percent and cities getting 15 percent.
Critics of the three bills say they do little to solve the state’s infrastructure problems. They point out that the threshold included in HB354 has not been reached in recent years. Also, the state is not building many new highways.
A Senate-approved bill would divert a portion of sales taxes to cities if state revenue rises. SB2455 awaits consideration in the House Ways and Means Committee.
The House bills have moved to the Senate Finance Committee.
Efforts to cover transportation funding needs do not end there. House Transportation Committee Chairman Charles Busby, R-Pascagoula, is one of the leading lawmakers in the chamber considering a plan to raise fuel taxes. In exchange, the state’s income tax would be trimmed.
The state’s fuel taxes – unchanged since the 1980s – would be increased by at least 12 cents over four years. During that time period, the income tax would be phased out.
A tax on electric vehicles and hybrid vehicles would also be included.
To view other legislative activities of interest for Mississippi, click here.
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