House speaker’s poll: Mississippians want to eliminate property tax even if it means higher retail costs

By Bobby Harrison | Originally published by Mississippi Today

Mississippians seem to be providing contradictory responses to questions asked in a recent poll commissioned by state Republican House Speaker Jason White.

On the one hand, according to the 501 people questioned in the scientific poll, their top priority was inflation or the cost of most retail goods, such as clothes, groceries, gasoline and many other items.

But on the other hand, a majority of those polled say they would favor eliminating the tax on primary residences (or on homesteads) and offset that lost revenue by increasing the sales tax, resulting in those retail items costing more.

Despite those increased costs, 56.6% of poll respondents said they would favor eliminating the property tax on primary residences while increasing the sales tax, while 24.6% opposed the proposal and 18.9% offered no opinion. Inflation was the top priority of 22.2% of respondents, followed by crime and public safety at 19.1% and healthcare at 14.7%. Only 13.5% said reducing taxes was their top priority.

Maybe, the people who identified inflation as the top priority were among the respondents opposed to eliminating the property tax and increasing the sales tax. Maybe, some poll respondents weighed the options and decided they would rather pay no property tax even if it resulted in increased costs for retail items.

No polling explanation offered

The polling firm – Republican-leaning Cygnal – did not attempt to explore that contradiction.

White and his House Republican leadership are currently exploring the option to eliminate the homestead property tax and increase the sales tax.

The option is being considered even though Mississippi has one of the lowest property tax rates in the nation with an effective property tax rate of 0.58% – meaning homeowners on average pay .58% of the value of their home in property taxes.

It should be pointed out that property taxes fund city and county governments and are levied by local officials under the restraints put in place in state law. Property tax rates could be significantly higher in some cities and counties than in others.

Mississippi has a 7% statewide sales tax on most retail items. The sales tax on food recently was reduced to 5%.

Most of the sales tax revenue currently goes to the state, but 18.5% of it is returned to the municipality where the sales tax was collected. Counties currently receive no sales tax revenue.

The sales tax is the largest single source of state revenue, accounting for more than 38% of the general fund used to fund state government services, and it will become even more important thanks to plans to eliminate the income tax. Based on recent legislation, the income tax, which currently accounts for a little less than 28% of the state general fund revenue, will be phased out sometime in the late 2030s.

Sales tax vs. property tax

With Mississippi eliminating the income tax, and already beginning to face budgetary pressures, it will be difficult for the state to provide any money to local governments to offset the potential loss of the homestead property tax. If the Legislature eliminates the property tax, local governments will be dependent on an increase in the sales tax with the revenue going to them. 

The homestead tax generates significantly more than $1 billion annually for cities and counties, according to Jason Camp, an extension specialist with the Center for Government and Community Development at the Mississippi State University’s Extension Service.

According to the Tax Foundation, when combining  funds for both local and state governments, the sales tax accounts for 35.1% of the total revenue while the property tax accounts for 26.4% and the income tax accounts for 16.8%, though that is steadily declining as the income tax is phased out.

The bottom line is that it will take a significant increase in the sales tax to offset the cities’ and counties’ loss of the homestead property  tax revenue. And the result will be Mississippians facing higher prices at retail establishments. How much of an increase is perhaps the key question for House leaders to ascertain before taking any action during the legislative session that begins in January.

Perhaps the question Speaker White should get his pollsters to ask before the 2027 session begins is whether Mississippians want to forgo government services or pay higher prices for retail items or keep paying what is one of the lower homestead property rates in the nation.

This article was originally published by Mississippi Today and is republished here under a Creative Commons license.

Source: Original Article