- Associated Press - Sunday, January 31, 2016

JACKSON, Miss. (AP) - More than a few observers walked away from Gov. Phil Bryant’s State of the State speech believing they’d heard the second-term Republican oppose plans for this year’s Legislature to cut the $242-million-a-year corporate franchise tax. The governor, though, says that’s not true - it’s more a matter of emphasis.

Here are the key words late in the 27-minute speech, as Bryant was restating his desire for any increase in gasoline taxes to fund road and bridge improvements to be offset by at least the same amount in tax cuts:

“There is no reason we cannot balance an increase in fuel tax with an equal and sufficient tax reduction. This tax cut does not need to apply to large corporations. They are and have been receiving the reduction in fuel cost for some time now. It is the working families of Mississippi I am concerned about.”

In 2014, Bryant proposed cutting income taxes for some Mississippi households earning less than $53,000 a year. That tax break would only apply in years when state revenue grew and the state’s main savings account was full. His recent remarks have been in the same spirit, calling for tax cuts to prioritize a “blue collar dividend” for individual taxpayers.

Lawmakers have granted more than $350 million in tax relief since 2011, with almost all of that going to businesses. Many firms, though, still want the Legislature to do away with the 2.5 percent franchise tax on business property or capital employed in Mississippi. Industries like banks and manufacturers dislike franchise taxes because they apply whether a business is profitable or losing money. A number of states have repealed or scheduled phase-outs of franchise taxes, leaving Mississippi among a minority that impose them.

Despite what he said in the speech, Bryant has voiced support for eliminating the franchise tax in the past, and spokesman Clay Chandler said he would sign a bill cutting it.

“The governor favors tax relief for the hard-working people of this state but is not opposed to a scheduled franchise tax reduction,” Chandler said.

Lt. Gov. Tate Reeves said he sees no conflict with Bryant’s goals. In addition to cutting franchise taxes, Reeves last year proposed eliminating the 3 percent and 4 percent personal income tax brackets, which would have phased in income tax cuts of up to $350 a year for individuals making at least $18,300 a year.

“My view is, it doesn’t have to be an either-or scenario. It could be both-and,” Reeves said Wednesday.

Reeves has said lawmakers should lock in long-term tax cuts this year, even though Mississippi has a shortfall that will make it harder for lawmakers to write a spending plan for the budget year beginning July 1. That could mean no immediate tax cuts, though, a possibility Bryant alluded to in the State of the State.

“It may not be this year, but when we are having surpluses and a full savings account, let’s pledge to give the people back a portion of their hard-earned tax dollars,” Bryant said.

There’s still a chance, though, that any fix for roads and bridges could get snagged by the inability of the GOP-dominated Legislature to agree on a tax cut. Central District Transportation Commissioner Dick Hall, himself a Republican, noted after the State of the State that swapping fuel taxes for other tax cuts isn’t an even trade, because the fuel taxes would be dedicated to transportation, while other taxes pay for the rest of government. He defers to lawmakers, though.

“All of it is obviously a legislative decision,” Hall said.

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Follow Jeff Amy at: https://twitter.com/jeffamy. Read his work at https://bigstory.ap.org/author/jeff-amy

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