This Tuesday, the front page of Mississippi's capital city newspaper, the Clarion-Ledger, featured a three-word plea to state lawmakers: "STOP THE MADNESS." The accompanying editorial re-capped a legislative session in which legislators, largely as a result of having cut taxes by $350 million in recent years, have made painful funding cuts to most state agencies yet are inexplicably debating another round of tax cuts.
Unfortunately, Mississippi legislators could not be swayed. Rather than heeding the clarion call to "stop the madness," the legislature opted to drag it out over the course of the next 12 years. The slow onset of these tax cuts will begin with phasing in a 50 percent deduction for federal self-employment taxes from 2017 to 2019, then accelerate with cuts to the bottom personal and corporate income tax rates from 2018 to 2022, and then conclude with the phase-out of the corporate franchise tax from 2019 to 2028. The bill delays the worst of these effects until several years down the road (see graph), but ultimately the cuts will reduce revenues by $415 million per year that fund services that legislators have already cut this year. The insanity was exquisitely captured in a political cartoon in which policymakers sit in an already-sinking boat labeled "state budget," while the lieutenant governor suggests they "shoot holes in the bottom so it'll drain faster."
The political dynamics leading to this result were interesting as well. The session started with a legislative race decided by an official straw-drawing ceremony, which was later negated, giving Republicans a supermajority in the Mississippi House that some thought would lead to a tax cut package like the one just enacted. But in the end, some Republicans voted against the bill and several Democrats supported it as a tradeoff for ensuring bipartisan support for $249 million in bond-financing for construction projects throughout the state. That bill and some of the specific projects it funds are high enough priorities for certain legislators that they agreed to support the tax cuts to ensure the bond bill passed.
In other words, Mississippi legislators kicked two cans down the road at once: they simultaneously borrowed money for needed infrastructure improvements and enacted tax cuts that will undermine the state's ability to repay those debts in the future. Sanity cannot return to the Mississippi Legislature soon enough.