Lieutenant Governor Delbert Hosemann was full of optimism speaking before a packed crowd at the Stennis Press Forum at Hal & Mal’s restaurant in downtown Jackson.
“The future's so bright here,” Hosemann told the crowd of journalists, lobbyists and movers and shakers. “The things we are doing are so positive here. Mississippi is in its best financial condition it’s ever been in.
“We have some of the best actual incentives for businesses to come here and you’re seeing those proliferate with the Amazon Web Services, with the battery plant, with the aluminum mill, with all the things going on on the coast. We’re competitive with our economic development packages.”
Mississippi state workers are down 1,000 people since Hosemann became lieutenant governor four years ago. He expects to reduce, through attrition, state employees another 10 percent — an additional 1,000 fewer state employees.
“We cut the state budget this year over last year with inflation going up two percent. We were one of the first states when we got our covid money in to match the cities on putting water and sewer in. Almost a billion dollars went into water and sewer.”
Hosemann reiterated his commitment to further reduce the income tax and grocery tax but also emphasized that the people of Mississippi expect basic government services to be taken care of. He talked about a “three-legged stool” on which our tax base is balanced between the income taxes, sales taxes and grocery taxes.”
“Every year we are continuing to eliminate the personal income tax.” Hosemann said the state income tax rate has gone from five percent to two percent or a total of $596 million in savings to taxpayers. “And we reduced the business franchise tax at the same time $38 million a year for 10 years. If you add that on, the total (reduction of taxes) is over $700 million. At the same time we’re doing this, we’re funding education. We’re funding roads and bridges.”
Hosemann said phase two will continue the reduction of the state personal income tax but in a steady, conservative, fiscally responsible manner to ensure basic governmental services are properly funded.
“In addition to that, everywhere I go and talk to people, they have talked about the high cost of groceries. Lynn and I when we got to the grocery store and what not I can notice even myself how much the increases have been. We think in the Senate that we need to cut the grocery tax. Our proposal is to bring it from 7 percent to 5 percent immediately. That dollar number is $126 million a year.”
Hosemann defended all the tax cuts. “We have had some of the greatest surpluses we’ve ever had in the state and we do this by good fiscal policy.”
Hosemann said the state is advancing in education. “We’re finally paying our teachers something close to what they’re worth. And it is beginning to show good results. But there are some issues with it. One is chronic absenteeism. Twenty-four percent of our kids are chronically absent. That means they miss 10 percent of the days so they miss at least 18 days.”
Hosemann plans to move the truancy officers out of the Department of Education and into the local school districts. He’s also planning to create some repercussions to high truancy rates. “There are no repercussions for those students not being in school and we need to have repercussions. It needs to be part of our accountability formula.”
PERS system reform is underway, Hosemann said, noting that PERS is currently $25 billion underfunded. “$25 billion dollars, just the interest on that at four percent is a billion dollars a year.” The new plan will increase the contributions to PERS gradually up to 19.5 percent. The state has hired four different actuary groups to study the PERS situation and make proposals. After a lot of hard work, Hosemann said, PERS and the state have agreed to a proposal that will gradually eliminate the PERS funding gap.
The plan is to create, for new state employees, a hybrid defined benefit plan along with social security to give a fixed rate of return along with a 401K-type plan as the other part. Nine percent of the cost to implement the plan would come from the state and the rest would be funded with the 19 percent employer contribution. As for existing state employees, Hosemann said, “We have an absolute commitment to our state employees to pay them their money.”
Going forward, new state employees will be under the new plan. There will be no special plans for certain groups of state employees, including the legislators. “All new employees will be under the same plan.”
Hosemann said the new plan will get the state “even,” meaning 90 percent funded, in 20 years. “This will be our way out of this huge liability that was left to us by the Democratic administration in the nineties.”
Hosemann answered questions from the audience. He stated he supports a ballot initiative bill but there was not much appetite for such a bill among the senators. “It will be difficult.”
Hosemann believes public school choice will pass in this legislative session (but not private school choice.)
State revenue collections are $80 million short this year out of a $7 billion budget. “It doesn’t mean we shouldn’t do tax cuts. To me, it’s like a yellow blinking light.”
