Thank you to MCBL&F Cornerstone Investor Capitol Resources Contract Lobbyist Camp Murphy for providing us with this weekly legislative session update. Capitol Resources is the lobbying firm who represents the Madison County Board of Supervisors. See below.
MS ’25 Leg Session Kicks Off
Lt. Governor Hosemann, Speaker White Outline Priorities; Governor Reeves Announces Major Tech Investments
Mississippi legislators return to Jackson Monday with a focus on rewriting the state’s tax structure. Lawmakers last week convened the start of the 2025 90-day regular session. Lieutenant Governor Delbert Hosemann and House Speaker Jason White both emphasized tax reforms among their top priorities, echoing calls for either lowering or eliminating the state income tax and reducing the sales tax on groceries. Already off to a fast start, the House introduced its plan late Friday to eliminate the state income tax entirely, signaling a strong commitment to advancing this initiative early in the session.
Tax cuts, education reform, and Medicaid expansion stand atop the legislative agenda for both Lieutenant Governor Delbert Hosemann and House Speaker Jason White (R‑West). While each agrees these issues are critical, they differ on how to address them:
- Tax Cuts:
Hosemann favors gradually lowering Mississippi’s flat income tax rate to 3% by 2030, alongside an immediate cut to the grocery sales tax from 7% to 5%. In contrast, White wants to fully phase out the state income tax on a slightly longer timeline and cut the grocery tax to 3.5%. Both leaders acknowledge the need to consider transportation funding and potential changes to the state excise tax on fuel. - Education Reform:
Hosemann is focused on curbing chronic absenteeism by transferring truancy officers from the Mississippi Department of Education to local school districts. He also supports last-dollar community college scholarships and sees improved education as key to raising the state’s labor participation rate. White aims to streamline school district operations, promote open enrollment for students in failing districts, and revamp accountability metrics to reflect real outcomes. - Medicaid Expansion:
Both Hosemann and White have voiced support for bringing Medicaid expansion back to the table, though Governor Tate Reeves remains opposed. The Senate may introduce a placeholder bill while leaders gauge potential federal policy changes—particularly related to work requirements and possible shifts in matching rates. White has suggested the state “pump the brakes” until there is more clarity from Washington.
The session is expected to run approximately 90 days. It is the second annual session in this four-year term.
House Plan to Eliminate State Income Tax
The Mississippi House of Representatives introduced House Bill 1, a leadership-backed tax reform proposal aimed at phasing out the state income tax over the next decade while implementing a $1.1 billion tax cut and directing additional revenue to transportation and the state retirement system. The bill includes reducing the grocery sales tax to 2.5%, restructuring sales tax distribution to municipalities and counties, and introducing a 5% sales tax on fuel to fund transportation infrastructure. Meanwhile, Senate leaders plan to unveil their own tax reform proposal, including reducing the flat income tax rate and grocery sales tax, with both chambers working toward comprehensive tax system changes. You can read more about it here
Governor Reeves’ Announcements
Governor Tate Reeves made two significant announcements that drew statewide attention. First, he revealed a $10 billion investment by Compass Datacenters to build a hyperscale data center campus in Lauderdale County—an initiative projected to create thousands of new jobs and boost Mississippi’s emerging tech sector. Reeves also signed an executive order establishing standards for inventorying artificial intelligence use in state government, aiming to balance innovation with ethical and privacy considerations.
Tort Reform Update
The Mississippi Supreme Court entered an order restoring January 21 as the deadline to petition for rehearing in a case involving $15 million in extra-contractual damages, punitive damages, and attorney’s fees stemming from a Hurricane Katrina-era insurance dispute. This order effectively allows newly elected Justices Jenifer Branning and Sullivan to review and weigh in on the ruling. According to Magnolia Tribune, the initial decision had moved up the deadline without explanation to a date before the new justices took office. A subsequent report noted that the business community remains engaged in the case, viewing it as a critical issue for tort reform in Mississippi.
PEER Reports
Two new reports from the Joint Legislative Committee on Performance Evaluation and Expenditure Review (PEER) may shape upcoming legislation:
- FY 2024 Annual Report – Charter Schools
Funding sources proved sufficient for charter schools in FY 2024, aided by an amended law (effective July 1, 2024) that addresses prior local ad valorem funding disparities. The Mississippi Charter School Authorizer Board’s 3% fee on per-pupil revenues has covered its operational needs since FY 2019. However, financial transparency concerns arose at one charter management organization when an independent accounting firm could not fully verify certain expenditures.
- Statutory Review – Education Scholarship Account Program
The Mississippi Department of Education disbursed $5.1 million (about 90% of available funds) to 515 ESA participants in FY 2024, with most expenditures going to tuition. While participants reported high satisfaction, the limited number of new scholarships prompted a recommendation for lawmakers to consider updating the funding formula to serve more students with disabilities.
Tax Collections Slow in December
Corporate income taxes slowed dramatically in December, compared to December 2024, putting overall collections halfway through the fiscal year 2% below projections. Sales taxes continued to gradually grow, and it was not clear if the drop in returns was related to the timing of corporate tax remissions. Here is a link to the full report.
State Agency Budget Hearings
House Appropriations Committee B and the Senate Appropriations Subcommittees started their work on Wednesday and Thursday. The committees held state agency budget hearings, which provide an opportunity for agencies to present their needs and requests for the upcoming year. No votes were taken, only presentations. The Appropriations Committees and Subcommittees will continue their work with budget hearings next week. The following agencies presented:
- PSC Staff
- Pat Harrison Waterway
- ETV
- Library Commission
- Charter School Board
- Capitol Post Conviction
- Public Defenders
- Supreme Court
- Ethics Commission
- Attorney General
- District Attorney
- Public Safety
- Judicial Performance
- MDE K-12
Budget starting point: In early December, The Joint Legislative Budget Committee (JLBC) adopted a conservative revenue estimate of $7.627 billion for Fiscal Year 2025-2026, leaving $7.474 billion available for lawmakers to appropriate after setting aside 2% for reserves. While the total state support budget recommendation of $7.699 billion is $16.7 million less than the current fiscal year, JLBC supports funding increases for key areas like state agency health insurance and public education, alongside $58.7 million in General Fund reductions. Lieutenant Governor Delbert Hosemann emphasized the state’s “lean and mean” budget approach, noting that interest on state funds has helped keep the budget balanced despite slower revenue growth. Mississippi’s year-to-date revenue collections for FY 2025 remain $18.5 million above estimates, driven by rebounding revenues in November.
Other Issues on Horizon
Beyond tax policy, legislators are expected to address a range of other issues, including potential Medicaid and healthcare access reforms, adjustments to the state’s public retirement system, and proposals that could expand school choice. Federal requirements for judicial and legislative redistricting also stand to reshape district lines in certain parts of the state. (The Legislature gaveled out early last week due to forecasts of winter weather in northern Mississippi. Lawmakers will reconvene Monday, January 13.)
Your Capitol Resources Team
Clare and her entire team is on the ground at the Capitol every day, advocating and monitoring on your behalf. As legislation is introduced, we will be screening it for potential interest and will soon begin including your bill list with these weekly reports that includes those bill titles and links to the text of the legislation. Between 2,500-3,000 bills are introduced every year, so please don’t hesitate to let us know about any legislation you hear about to ensure we tag it for review.
Deadlines: The Mississippi Legislature operates according to a strict series of legislative deadlines. Here are major deadlines on the horizon:
Jan. 15 Deadline to request to staff the drafting of a general bill.
Jan. 20 Deadline to file general bills.
Full deadline calendar can be found here
Team Contact Information:
Clare Hester
Cell: (601) 497-4646
chester@capitolresourcesllc.com
Reed Branson
Cell: (601) 842-3417
rbranson@capitolresourcesllc.com
Matthew Majure
Cell: (601) 750-4196
mmajure@capitolresourcesllc.com
Pete Smith
Cell: (601) 720-6020
psmith@capitolresourcesllc.com
Harper Coleman
Cell: (601)248-5089
hcoleman@capitolresourcesllc.com
Camp Murphy
Cell: (601) 955-8550
cmurphy@capitolresourcesllc.com
Parks MacNabb
Cell: (601) 454-1370
pmcnabb@capitolresourcesllc.com
Beth Hamilton
Cell: (202) 641-0913
bhamilton@capitolresourcesllc.com
