Mississippi House Speaker Proposes Diversions, Tax Swap to Fund Infrastructure

Speaker Gunn, whose plan would divert money to transportation projects over the next several years. (Mississippi Legislature)

Mississippi House Speaker Philip Gunn presented an infrastructure funding plan April 12 that would divert money to transportation projects over the next several years.

The proposal calls for a portion of use tax revenue to be allocated to municipalities to pay for road, bridge and sewer projects. A use tax is levied on purchases made outside one’s state of residence on taxable items that will be used, stored or consumed within one’s state of residence. It pertains to items on which no tax was collected in the state of purchase, such as online purchases.

Gunn’s plan proposes that 3.75% of use tax revenue is diverted to transportation funding, a sum which will increase annually until reaching 15%. The plan would take effect in fiscal 2020, which starts July 2019.

Meg Annison, spokeswoman for the speaker’s office, explained that money brought in from the use tax goes toward Mississippi’s general fund, which finances state operations such as education programs, public health departments and law enforcement offices. Under the proposed plan, a fraction of the money that normally would support these programs would go to infrastructure.

“Something would be affected for sure because when you’re crafting a budget, you only have a certain amount of money to use. The House feels like infrastructure is a function of government,” Annison said. “This is taxpayers’ money, and they trust us with their dollars to be used in ways that benefit and help them. As we’ve all seen throughout the nation, [infrastructure is] just getting worse and worse.”

The proposal also includes plans for a tax swap over the course of four years. The 4% income tax bracket would be phased out, and a fuel tax would be phased in. Annison emphasized that this is a “neutral shift,” meaning that there would be no raised taxes.

ARTBA Mississippi Bridge Snapshot of 2017 FHWA National Bridge Inventory Data by Transport Topics on Scribd

Mississippi’s fuel tax is 18.4 cents per gallon. The proposal says the tax would increase 2 cents a year for four years until it hits 26.4 cents per gallon. At that point, the tax would be indexed for inflation.

The proposed plan would place additional annual taxes of $300 and $150 on electric vehicles and hybrid vehicles, respectively.

Gunn’s plan comes two days after Gov. Phil Bryant signed a state of emergency proclamation ordering the Mississippi Department of Transportation to close 83 locally owned bridges that the National Bridge Inspection Standards and the Mississippi Office of State Aid Road Construction deem deficient.

Bryant

“We in the House have been addressing this and are not caught off guard,” Gunn said. “For two years, we have pushed a number of proposals to address this serious issue. I am glad others are now realizing its importance. It’s been one of our priorities for several years now.”

According to the governor’s proclamation, the spans (see list) will remain closed until they are in compliance with federal and state laws.

The governor’s decree also applies to bridges found to be deficient in the future.

“These bridges have been deemed unsafe for the traveling public,” Bryant said. “Keeping them open constitutes an unnecessary risk to public safety, violates the corrective action plan agreed upon by the state and federal government and jeopardizes federal infrastructure funds Mississippi receives.”

Mississippi is not alone in its array of structurally deficient bridges. The American Road and Transportation Builders Association published an analysis Jan. 29 revealing deficiencies in a significant portion of bridges that link the highway system. The group, which consists of representatives from the transportation design and construction industry, has rated more than 54,000 of the nation’s 612,000 bridges “structurally deficient.”

Gunn’s plan contains the blueprints for the Emergency Road and Bridge Repair Fund, which MDOT could use to provide funding for emergency repairs to bridges, roads, streets and highways.

The proposed plan has not been met with unconditional support. Lt. Gov. Tate Reeves took issue with the plan, particularly the proposed increase to the fuel tax. In a statement, Reeves cited the Building Roads, Improving Development and Growing the Economy Act, or BRIDGE Act, which the Senate approved in February. The BRIDGE Act relies on existing dollars, revenue growth and bonds to generate $1 billion for infrastructure projects.

“I am a Republican. I am a conservative. I am against raising gas taxes,” Reeves said. “The Senate passed a comprehensive $1 billion plan without raising anybody’s taxes to address Mississippi’s infrastructure needs, and we look forward to working with the House and Gov. Bryant to address road and bridge maintenance.”