BILL MINOR:Mississippi’s tax reluctance denies the revenue realities

JACKSON – They just don’t make many Mississippi legislators anymore with guts enough in time of need to vote for taxes or programs that a sizable portion of voters oppose.
I can think of at least three times in years past that lawmakers have courageously risen above expectations and produced programs backed with additional taxes that kept Mississippians’ quality of life competitive with other Americans.
n In 1932 Mississippi was in a state of financial collapse. There was only $1,326 in the state treasury. School teachers and state employees were being paid with script that they could cash only at a discount, if at all.
A Yale-educated governor named Martin Sennett (Mike) Conner came into office with a revolutionary new idea – levy a 3 percent retail sales tax on most goods and services, something no other state had done. Businessmen howled with outrage and 5,000 of them marched on the state Capitol. Dozens of them crammed into the governor’s office. One of them pulled a pistol and was wrestled to the floor when he aimed toward Conner.
Legislators were threatened with defeat if they voted for the sales tax. After bitter debate, the Emergency Revenue Act of 1932 passed by one vote, levying a 2 percent retail sales tax, the nation’s first.
Contrary to the warnings of the anti-tax business interests, the floundering economy stabilized and by 1935, the state had a cash balance of $3.9 million in the treasury and paid off the state’s outstanding obligations.
This was still the Depression, remember, and unemployment was high and incomes low. The Roosevelt Administration had enacted a batch of “alphabet soup” federal aid and recovery programs. Conner welcomed all of the programs and dispensed funds to help relieve suffering of the people. (Please note.)
n In 1954 and 1955, through lengthy regular and special legislative sessions, Mississippi lawmakers – pushed by Gov. Hugh White – boldly enacted the Minimum Foundation Education Program aimed at building schools for black children equal to whites, and equalizing teacher salaries between the races.
To raise $22 million in new revenue – a big chunk of money for those days – lawmakers enacted a 14 percent surtax on top of eight separate taxes (the income tax and oil and gas severance tax being the most controversial) subject to expire in two years.
Out of the temporary surtax, the oil severance tax was raised from 4 to 6 percent per barrel (50 years later, even with oil company profits skyrocketing, and gas prices many times higher than back then, the tax is the same). Also the top income tax bracket for both individual and corporate income was put at 6 percent in the 1950s, but dropped to 5 percent in the late 1970s, and has stayed there.
n In 1982, William Winter pushed lawmakers to stay in special session right up to Christmas Eve to enact his noted Education Reform Act. It established free public kindergartens, making them part of the state school system, mandated compulsory school attendance, created higher standards for classroom teachers and substantially raised teacher pay. To produce some $220 million in new revenue for the program, lawmakers raised the sales tax a half-cent and reduced some deductions in the income tax schedule.
These times of legislative courage certainly haven’t been seen in the 2009 Legislature, even while the state faces economic problems reminiscent of the 1930s – tax revenues in steep decline and vital state services in jeopardy. It took decades for lawmakers to build the state’s educational, health care and other essential public services to a decent level. That’s why today’s legislators have a heavier burden to see these systems do not lose valuable ground for lack of financial support.
Well-paid business and industry lobbyists have kept the state’s tax structure tilted to favor business with low income taxes and against consumers with a high sales tax. Somehow the myth has grown that the tax code is untouchable. That’s why it is laughable to see lawmakers merely nibbling around the edges trying for three years to raise the state’s ridiculously low cigarette tax and failing to raise it a few cents.
Transfer payments – money that comes from governmental sources, be it Social Security, welfare, military or other publicly funded retirement programs – have long been the biggest source of income for Mississippians. It’s incredible that when millions of federal dollars are available to needy Mississippians under the Obama economic stimulus package our governor and some legislators reject them.

Bill Minor is a syndicated columnist who has covered Mississippi politics since 1947. His address is Box 1243, Jackson, MS 39215. Send e-mails to Minor through edinman@earthlink.net.

Bill Minor