2016 Legislative Session Report
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SESSION ENDS WITH COMPREHENSIVE TAX REFORM, EXPANDING EDUCATIONAL OPPORTUNITIES
The 2016 legislative session ended today with lawmakers passing the largest tax relief package in state history and continuing to expand access to educational opportunities.
Lt. Gov. Tate Reeves successfully advocated for a flatter and fairer tax policy to grow the state’s economy and offer an estimated $610 million in tax relief for individuals and businesses over the next decade.
“Mississippi’s long-term economic health relies on a tax policy that makes our businesses more competitive in the marketplace and entices more job creators to locate here,” Lt. Gov. Reeves said. “I appreciate the work of Speaker Gunn to help give Mississippians the opportunity to keep their hard-earned dollars in their pockets to spend at home. I look forward to Gov. Bryant signing this historic measure into law.”
Under the Taxpayer Pay Raise Act, all taxpayers will see a tax cut. Senate Bill 2858, reduced income taxes, eliminated the franchise tax and reduced the tax burden on self-employed Mississippians.
The plan, which saves Mississippians $415 million over 10 years, includes:
- Eliminating the 3 percent tax brackets levied on income beginning in 2018. The bracket will be phased out over four years, providing individuals savings of up to $150 annually.
- Reducing the overall tax burden on an estimated 160,000 self-employed Mississippians. Self-employed individuals will be able to deduct half of the self-employment taxes paid to the federal government by 2019. This includes a variety of sole proprietors such as realtors, lawyers, accountants, preachers, landscapers and child care workers.
- Removing the investment penalty, or franchise tax, on businesses’ property and capital. Over the next 10 years, this investment penalty on job creators will be phased out. Mississippi is one of the few states to have a franchise tax, putting the state at a competitive disadvantage when competing for jobs.
Lawmakers also passed Senate Bill 2808, helping job creators increase investment in their businesses by reducing the unemployment tax rate. The bill reduces unemployment taxes up to $195 million over the next 10 years while increasing investment in workforce training at community and junior colleges for new jobs in the state.
Legislators also approved a $6.16 billion general fund budget for Fiscal 2017 that forces agencies to find efficiencies with taxpayer dollars and prioritizes education funding. The fiscal year begins July 1.
“As a fiscal conservative, I believe we can set priorities, like funding education at all levels, and operate state government more efficiently,” Lt. Gov. Reeves said. “In light of slower revenue growth than anticipated, this budget protects education funding while reducing spending in other areas.”
Public schools will continue to receive more than $2.5 billion, including $2.2 billion for the school funding formula, the Mississippi Adequate Education Plan. Universities and community colleges were essentially funding at current year levels by $748.2 million and $264.7 million respectively.
The Legislature also shined a light on agency spending though the Budget Simplification, Accountability and Transparency Act, which forces more accountability for how departments spend assessments and fees in special funds.
Also in the four-month session, the Legislature continued to find ways for students to receive a quality education. The Legislature expanded educational opportunities for students, modernized school district management and consolidated several districts.
In Senate Bill 2161, students in C-, D- or F-rated school districts can cross district boundaries to attend public charter schools. The bill will make Mississippi’s rural areas attractive to public charter schools and provide more options for parents and students.
“This is another step in ensuring that every child in Mississippi has an opportunity for success in life,” Lt. Gov. Reeves said. “This bill should open up the possibility of public charter schools in smaller districts in the Delta and other small struggling districts throughout our state.”
By allowing students to cross district lines, public charter schools will be able to open in rural areas and attract enough students to operate efficiently. The bill allows employees of public charter schools to participate in the Public Employees’ Retirement System.
School governance will change for districts with elected superintendents. Mississippi is one of a few states that allow elected school leaders.
Senate Bill 2438 mandates that school boards hire superintendents to run daily operations starting Jan. 1, 2019. There are currently 55 elected superintendents in the state, which serve with elected school boards. The bill does not prohibit local boards from appointing current leaders.
Lawmakers continued to reduce the number of school districts by consolidating administrations across the state. The bills aim to put more tax dollars into the classroom rather than administrative costs.
Since 2012, the Legislature has reduced the number of school districts to 139 from 152. Districts consolidated this session include:
- Senate Bill 2495 that combines districts of Montgomery County, which has 273 students and Winona, which has 1,123 students.
- Senate Bill 2500 that dissolves Lumberton Public School District, which has 585 students, and merges it with neighboring Poplarville and Lamar County districts, which have 1,927 and 9,996 students, respectively.
- House Bill 987 merges districts in Leflore County and Greenwood, which have 2,405 students and 2,846 students, respectively.
- House Bill 926 combines Holmes County schools with 2,898 students and Durant schools with 531 students.
- Senate Bill 2501 transforms Coahoma Agricultural High School into an early college high school managed by Coahoma Community College.
The Legislature also established an Achievement School District under House Bill 989, which will manage failing schools and districts under the supervision of a superintendent. The superintendent will be appointed by the state Board of Education.
Other legislation passed this session includes:
- Senate Bill 2493, Supporting and Strengthening Families Act, which gives families options for foster care.
- Senate Bill 2238, which defunds Planned Parenthood and prohibits any tax dollars from being spent with the abortion provider. The bill stops funding to the nation’s largest provider of abortions but continues spending on family health services to other providers.
- House Bill 519, the Mississippi Unborn Child Protection from Dismemberment Abortion Act, which bans that horrific method of abortion.
- House Bill 786 that allows church congregations to establish security precautions where members can carry firearms to protect fellow churchgoers.
- House Bill 1523, the Protecting Freedom of Conscience From Government Discrimination Act, that protects individuals from government interference when practicing their religious beliefs.