The Clarion-Ledger

The Clarion-Ledger

Stop the madness. We are begging the governor, please — for the love of Mississippi — stop the madness.

This isn’t hyperbole. We’re not being funny. We are completely serious.

Please. Stop. The. Madness.

This legislative session has confounded a number of people as lawmakers have chosen to pass legislation pandering to different constituencies while ignoring serious issues like crumbling roads and infrastructure needs.

Over the weekend, the madness hit a fevered pitch. After agreeing to a budget that will provide deep cuts to just about every state agency and taking money from the rainy day fund — actions required because of a lack of tax revenue — lawmakers have agreed to further cut corporate taxes.

This is unbelievable. Mississippi is broke, so the answer is to cut the sources of revenue remaining? Republicans and Democrats alike are questioning the wisdom of such irresponsible legislation, but legislative leaders continue to push forward.

House Ways and Means Chairman Jeff Smith, R-Columbus, basically is blaming the Senate, alluding to the fact that if it didn't pass the tax cut then the Senate — specifically Lt. Gov. Tate Reeves — would have killed all bond bills. It should have let him do it, if he thinks that is prudent. The fallout would be on him.

It’s not like the state is overspending. The recession saw to that first. Then, smart decisions by the Republican leadership that did not allow spending one-time money on recurring expenses has kept the state’s fiscal house in order.

No, Mississippi faces a budget disaster, in part, because of $350 million in tax cuts over recent years. That money is gone. Now lawmakers want to cut even more.

We were hopeful that any tax cut plans would not materialize this year. First, Gov. Phil Bryant signaled in his State of the State address that the current fiscal situation — he had just had to make mid-year budget cuts — meant any additional tax cuts were not prudent. Then, after the Senate passed a tax cut plan, the House gutted it — again saying current fiscal realities make it the wrong time.

The tax lawmakers cut is the franchise tax, a tax on the capital a company holds each year. It’s an unfair tax in many ways, and we support its repeal. However, repealing it should not be done in a vacuum. That revenue must be replaced some other place. And it should never — NEVER — be done when our state economy is shrinking, not expanding.

The bill passed Monday will not begin for two years, during which lawmakers say it will be studied. Odd thing to do, passing a bill House leaders say is bad and then study what will happen, hoping to catch anything before it triggers. Such a move makes absolutely no sense.

Reeves, the main proponent of pushing through this tax plan now, argues the tax cut will help spur the economy because corporations will reinvest that money and create jobs. However, history has shown us that this is unlikely, especially during uncertain economic times.

Learn from others

What is so maddening about what the Legislature is doing is that it has plenty of examples of how this is going to end — Alabama, Louisiana and Kansas.

After tax cuts under former Alabama Gov. Bob Riley led to severe revenue shortfalls, current Alabama Gov. Robert Bentley had to call a special session to erase a $200 million deficit. Lawmakers there raised the cigarette tax by 25 cents, nearly doubled automobile title fees, increased a car rental tax by 33 percent, added a 15-cent per prescription pharmacy tax and added $400 per bed to the nursing home tax.

Alabama, by the way, is in the best situation of the three examples.

Our neighbor to the west, Louisiana, is facing a $2 billion budget deficit for this coming fiscal year, that after having to make up a $900 million deficit for the current budget in March.

Former Louisiana Gov. Kathleen Blanco, a Democrat, started the crisis in the aftermath of Hurricane Katrina when revenues started to skyrocket because of rebuilding efforts. She signed modest tax cuts and credits into law. Gov. Bobby Jindal went even further, pushing lawmakers to cut income taxes on the wealthiest and expand tax credits for businesses.

When the Katrina money dried up, revenues started to tank. Jindal refused to roll back any of his tax plan, and the state has faced massive budget cuts for years. Now, with the oil industry reeling, things are worse.

So far, Louisiana has raised the sales tax, cut 30,000 state jobs, depleted its rainy day fund and all but gutted higher education budgets. And that’s before it deals with the current $2 billion deficit looming for the budget that begins July 1.

And then there is Kansas, the state from which we all should have learned.

Kansas has exempted small businesses from paying income taxes since 2012, and lawmakers passed multiple tax credits for larger corporations. They also cut income taxes for the upper income bracket by 26 percent.

The state has faced four straight years of budget woes, including nearly $350 million for the current budget year. Kansas Gov. Sam Brownback cut higher education by nearly $50 million, and the Legislature increased the sales tax by 5 percent, hiked the cigarette tax 50 cents per pack, and raided highway funds. The most shocking — and likely most disastrous move — was to allow the governor to pay only three quarterly payments to the state’s retirement fund this year. Therefore, next year the state will be required to pay five quarterly payments, including 8 percent interest on the last one for this year. As you can imagine, no one believes the money will be there to cover the bill, but they’ll worry about that later.

Mississippi isn’t different

Mississippi is no different than these other states. In fact, we’re in terrifyingly similar circumstances.

Like Louisiana, our state is closely tied to the oil and gas industry. With oil prices still low, state investments and a large percentage of the state’s private industry is negatively impacted. Low oil prices are good for consumers but bad for the state’s economic health.

Like Kansas, we have a fairly balanced approach to budgeting, what many call the three-legged stool. We rely on sales, income and property taxes. When you start sawing off parts or all of a leg, then the stool tips over. That’s what happened in Kansas, and it’s what will happen in Mississippi.

And in both states, business and local chamber leaders agree that the cuts did not generate enough savings to bolster the economy through job creation. What they are seeing are businesses, especially small businesses, where the employees are paying income taxes but the companies are not.

Stop the madness. Please!

Mississippi is a poor state heavily dependent on federal funds. That’s a fact.

And Mississippi is not a state that is overspending by any noticeable amount. That’s reality.

What we have right now is a small yet significant budget crisis largely of our own making. Lawmakers are making deep cuts reminiscent of what we faced right after the 2008 recession. They are also warning that Bryant likely will have to make additional cuts mid-year.

So why on Earth would we pass a tax cut now? Why would lawmakers want to create a massive budget problem that we know will only lead to tax hikes, larger spending cuts and unemployment for thousands of state workers?

Please, plug the current holes and walk away. Leave the tax cuts for a few years down the road when the economy has rebounded and a way to offset the loss in revenue can be found.

We are begging of you, Gov. Bryant, stop the madness. Don’t cripple Mississippi’s economy. Veto the tax cut bill.