State’s misguided tax cuts keep piling up

When Mississippi government looks at its current budget pinch, it’s pretty obvious what the two causes are.
• A painfully slow recovery from the Great Recession of a decade ago.
• A Republican-driven series of tax cuts, mostly for corporations, that have yet to live up to the supporters’ “trickle down” promise.
Earlier this month, Mississippi Today, the online news site based in Jackson, crunched the numbers. It found that since 2012, when a trio of tax-cutting Republicans — Gov. Phil Bryant, Lt. Gov. Tate Reeves and House Speaker Philip Gunn — ascended to power, 51 tax cuts or breaks have been enacted, costing the state treasury a conservatively estimated cumulative total of $577 million in that five-year span. It’s probably been much more, as state officials were only able to project the revenue impact of 21 of those 51 laws.
Since most of these tax breaks have been phased in, the effect has been steadily increasing. Of the $577 million in foregone revenue so far, some $324 million — or 56 percent — occurred in this fiscal year alone. And it’s going to get bumped up again July 1, when the single largest tax cut in state history begins its 10-year phased-in elimination of the corporate franchise tax and the three percent bracket for individual income tax.
Some of the tax breaks have been downright stupid — such as one that bankrolled the development of several shopping malls before lawmakers stopped the insanity or the $600 million giveaway to Continental Tire that will never pay for itself. Some have been defensible, such as the reduction of the corporate inventory tax.
But none have produced so far the boon that their GOP supporters said would come when they passed them, as the state lags behind the rest of the nation in job and population growth. And next year is projected to be not much better than this year.
What should the state do?
First, hit the pause button. Lawmakers are coming back for a special session next month to complete some unfinished budget business. Bryant, who controls the agenda of special sessions, should ask them to postpone the tax breaks that are set to take effect July 1. Let’s see this trickle-down economics work first before gambling more on it.
As for gambling, what the state shouldn’t do is enact a lottery, which Bryant says he is contemplating asking lawmakers to consider next month. Mississippi may be desperate, but trying to boost the treasury on the backs of the poor and working class — those most likely to spend disproportionately on lottery tickets — while letting corporations off easy is unconscionable.
The governor, Reeves and Gunn are heavily responsible for the state’s revenue problems. Even if they won’t acknowledge their mistakes, they have the power and responsibility to keep the situation from getting worse.