Here’s how we fund Mississippi road repairs without tax increases
State legislators have been sidestepping infrastructure funding issues like most Mississippians dodge the state’s ubiquitous potholes. Indeed, remedying the state’s decaying transportation system was one of the 2018 legislative session’s primary objectives. Despite legislators introducing a few promising solutions, the proposals were often coupled with imprudent ideas like increasing taxes.
Thus, the Legislature adjourned without implementing a solution, again kicking the metaphorical can down the crumbling road.
And crumbling it is. Recently, safety concerns forced Gov. Phil Bryant to close over 100 bridges. Estimates suggest that it will cost around $330 million a year to fix those bridges, along with the rest of Mississippi’s transportation systems. While the costs to revamp Mississippi’s infrastructure may ultimately prove lower than the estimates, there’s no question that the state’s roads and bridges are in bad shape.
However, the long detour of inaction seems to be reaching a critical juncture. Gov. Bryant now appears open to calling a special legislative session to address transportation funding issues. If this comes to fruition, legislators ought to focus on creative, long-term plans that don’t overburden taxpayers or state agencies. This can largely be accomplished by borrowing from the state’s rainy-day fund, reallocating funding from the Mississippi Development Authority and altering the state’s tax system.
Mississippi is required to spend only 98 percent of its annual revenue and to save the rest in its “rainy day fund.” These funds are reserved for budgetary emergencies. Yet too often, legislators waive this requirement and spend all of the state’s revenue. This means that Mississippi saves far less than the required roughly $400 million a year, in part because politicians often budget and spend, well, like politicians.
The Legislature needs to enforce more strictly the 2 percent set-aside rule. This would encourage lawmakers to budget judiciously. Legislators should also temporarily divert a large portion of the funds toward infrastructure, which was part of the Senate’s original plan. This could provide hundreds of millions of dollars for transportation spending.
To supplement these funds, lawmakers should reallocate resources dedicated to some of the Mississippi Development Authority’s (MDA) programs toward infrastructure. The MDA is tasked with attracting companies through handouts — which are often done for unwise purposes. For example, the Job Protection Grant funds business ventures that are no longer economical. The Advantage Jobs Program provides cash rebates for companies that pay their employees above-average wages. The Motion Picture Rebate program offers massive rebates to film companies. Mississippi also provides lavish tax incentives for specific businesses.
Giving chosen companies preferential treatment can be unfair. Further, these subsidies divert tax revenue away from the state treasury. While it’s important to encourage employers to operate in Mississippi, what is the point of doing so if transportation systems are out of order? As such, many of these programs should be amended to provide funding for transportation.
Redirecting revenue from the rainy-day fund and MDA alone will likely be inadequate, but it will provide much-needed aid to the state’s infrastructure. Lawmakers can plug remaining holes in the funding by issuing state bonds and relying on President Donald Trump’s pending infrastructure plan. Currently, it would allocate $200 billion to the 50 states over a 10-year period and would be a boon to Mississippi.
Between these sources, Mississippi should be able to transform its infrastructure. But one more step is needed to ensure that transportation funding is more sustainable in the future. As it stands, infrastructure funding is derived from a gas excise tax of around 19 cents per gallon, but as automobiles increasingly become more fuel-efficient, gas tax revenue will decrease per capita.
If the gas tax really is nothing more than a means for repairing roads and bridges, then the tax policy ought to be reformed. Miles driven and the weight of the vehicle, not the amount of gas consumed, is what damages transportation infrastructure. So rather than raising the gas tax, Mississippi should lower it and adopt a revenue-neutral Vehicle Miles Traveled (VMT) tax assessed based on automobile mileage and weight – just like the one Oregon adopted with great success. This would also ensure that revenue will not dry up as vehicles become more efficient.
Mississippi legislators should be able to fund the most pressing transportation repairs without raising taxes. They can accomplish this by redirecting some of the $400 million from the rainy-day fund, reallocating millions in lost and misspent revenue, and relying on bonds and President Trump’s infrastructure funding. Further, the Magnolia State can ensure that transportation funding is more sustainable in the future by switching to a VMT tax that’s linked to roadway usage rather than dwindling gas taxes. With a little creativity, Mississippi lawmakers can keep taxes low and address critical infrastructure needs.
