Key credit rating agency voices concerns about Tate Reeves' proposed tax cuts
One of the most watched issues by Mississippians when the Legislature convenes on Jan. 4 will be Gov. Tate Reeves’ proposal to eliminate the personal income tax.
But Mississippians will not be the only people watching. Also watching will be some prominent New Yorkers who can impact the state’s ability to issue and pay for debt to fund long-term projects.
“Mississippi’s general fund relies on a diverse set of revenues ... there appears to be interest, however, in making a significant change in the state tax structure with both the governor and legislators proposing various means of reducing or eliminating the PIT,” Fitch, one of the three major credit rating agencies, said in an analysis of Mississippi’s financial condition. “Fitch will continue to monitor developments related to the proposed changes. A structure that results in a slower growth, a more volatile revenue system or that results in a revenue gap relative to spending needs would be a negative credit consideration.”
Fitch’s analysis is important because if the agency gives a state a bad credit rating, it will become more difficult for the state to issue bonds.
Mississippi’s general fund tax collections for the last fiscal year were $6.7 billion. If the state’s personal income tax had been eliminated, as Reeves wants to do within the next five years, the total would be $4.5 billion.
Read more: https://www.sunherald.com/news/politics-government/article255954312.html
(Gulfport Sun Herald)