By NEMS Daily Journal
Reasonable concerns expressed by a bipartisan group of Mississippi legislators about costs to the state treasury of special-interest tax cuts and exemptions enacted without adequate fiscal estimates require corrective action in legislative rules during the next session.
Sen. David Blount, D-Jackson, introduced a resolution late in the 2013 session to make it more difficult to pass special-interest tax exemptions without information about how much the breaks would cost the state.
He has been joined by Senate Appropriations Chair Buck Clarke, R-Hollandale, Vice Chair Terry Burton, R-Newton, and Hob Bryan, D-Amory, former chair of the Finance Committee.
All four say the Legislature needs to know the potential impact of tax cut and exemption bills before they’re passed so that an accurate measure impact on state revenues is possible.
Common sense, beginning at the household level, dictates that costs must be factored into the larger budget process. Tax breaks without revenue impact estimates invite avoidable negative consequences on revenue with impact beyond the narrower interests of particular tax breaks.
Lt. Gov. Tate Reeves’ office issued a statement indicating Reeves, a Republican, is fully aware of Blount’s concern and is sympathetic to the concerns expressed. The statement suggests a rule is in place that, if enforced, could address the issue.
A full hearing on the issue going forward can shed light on what’s needed in terms of specific rules changes. An impact statement, also called a cost-benefit analysis, is routinely produced on most specific development projects involving state tax breaks.
Passing what Bryan calls “special interest” tax breaks is no different than any other revenue impact. How much will it cost?
The idea is not to prevent tax breaks but to make sure they are fully justified based on sound estimates showing that they will not endanger general fund integrity.
Blount’s position is sold fiscal conservatism. Expending or committing money without specific information would be considered unthinkable by most of the legislative tax break proponents if similar action affecting funds came from the federal level.
If tax breaks take away from revenue that’s needed in the general budget somebody will pay, either through higher taxes elsewhere or in program elimination.
Mississippi operates on a thin edge even in the best of times. Costs must be calculated for basic fiscal responsibility.