MS 2025 Leg Session Adjourns
Lawmakers yet to finalize ‘25-’26 Budget… Special Session Likely
Mississippi lawmakers adjourned their historic, three-month-long regular legislative session Thursday, with leadership proudly pointing to the phase-out of the state’s personal income tax as their chief accomplishment. However, differences between the chambers kept them from adopting the 70-plus appropriation bills that make up the state’s budget, meaning Gov. Tate Reeves is likely to call them back in special session at some point before the new fiscal year begins July 1.
The 90-day session, the second of this four-year term, also saw the redrawing of 10 Senate and 5 House districts in response to a federal court order, setting the stage for special mid-term elections in those seats in November, presuming the courts adopt the plan. Lawmakers also redrew boundaries for the state’s circuit and channery courts.
Lawmakers waded into a range of other issues – adopting some updates to the state’s Medicaid and CON programs, rejecting Pharmacy Benefit Manager restrictions that could have cost employers, and adopting state laws aimed at ending DEI programs at public universities and schools. They stopped short of sweeping changes, such as the stalled effort a year ago to expand the state’s Medicaid program.
Budget Fight
Lawmakers left the capitol (the House on Wednesday and Senate on Thursday) knowing they could soon be back. House and Senate leaders appeared deadlocked and frustrated with each other. The State’s annual budget is $28 billion, with $12 billion of that being federal funds directed at specific programs such Medicaid, Temporary Assistance for Needy Families, etc., $7 billion in special funds from fees and special taxes to run regulatory and licensing agencies and road building and repair, and $7 billion in general funds from a range of taxes. Most of the discussion is focused on those general funds, where lawmakers have full discretion to allocate dollars to priorities.
While acknowledging agreement on many of the spending issues in the state’s $7 billion general fund budget, there appeared to be disagreement over giving lawmakers funding for projects in their local districts like roads, libraries, and more. Now, the governor is the only one empowered to call them back to adopt the budget; Gov. Tate Reeves’ history suggests that he is typically reluctant to convene the members unless House and Senate leaders have an agreement on how to quickly proceed. On Thursday, he said he believes an agreement is within reach, but he said he would let leaders in both chambers step away from the session and regroup. He said he hadn’t yet considered when to call lawmakers back.
The appropriations bills for the fiscal year beginning July 1, as initially considered in both chambers, simply funded most state agencies at the amount at which they were funded in the current fiscal year, with almost no extra funding allotted for new or urgent needs. Typically, those are agreed upon in the final days of the Session.
What follows is a recap of some notable legislation this session.
TAXES AND BUDGET
Income Tax Phase-Out Signed into Law
One of the most consequential measures this session was HB 1 , a historic tax reform package that sets Mississippi on a path to fully eliminate its personal income tax. Under the new law, the current 4 percent flat tax rate will gradually drop to 3 percent by 2030. After that, future reductions are tied to revenue growth triggers. Once fully phased out, Mississippi would join a small number of states that do not tax individual income.
The bill also reduces the sales tax on groceries from 7 percent to 5 percent, a change long sought by working families and retailers alike. To offset these reductions, the law includes a phased-in 9 cent fuel tax increase, which will be implemented in 3 cent increments over three years. Revenue from the fuel tax will be used for infrastructure and road improvements.
The legislation also creates a new “Tier 5” in the Public Employees’ Retirement System (PERS) for future state employees. This tier shifts retirement benefits to a hybrid model that combines elements of traditional pensions and defined contribution accounts. Lawmakers said this was necessary to help address PERS’ long-term liabilities without changing benefits for current workers or retirees.
HEALTHCARE
Medicaid Technical Amendments Bill
While Governor Tate Reeves vetoed SB 2867 , a wide-ranging “technical amendments” bill designed to update various aspects of Mississippi’s Medicaid program, lawmakers quickly enacted a similar bill, SB 2386, that attempted to address his concerns. It instructs the Division of Medicaid to specifically work with the MS Healthcare Collaborative and the hospital industry on changes to the state’s supplemental payment programs – a vital piece of hospital revenue. The new bill is pending on the governor’s desk.
Notably, the bill:
– Revises a requirement that the Division implements an Upper Payments Limit reimbursement program for all hospital physicians to a request a plan from Medicaid to the Legislature by year’s end
– Authorizes the state to maximize the supplemental hospital payment program
– Reimburse pediatricians at 100% of Medicare and Ambulatory Surgery Centers at 90% of Medicare
– Establish a treat-in-place program for ambulance services
– Provide eyeglasses every two years, instead of every five, for adults
– Provide reimbursement for a continuum of care for autism spectrum disorder
– Cover some weight loss, nonopioid, and non-statin drugs as well as physical exams required to participate in school sports
– Reestablish the Medicaid Advisory Committee and Beneficiary advisory committee
– Establish reimbursement for a new classification of Certified Community Behavioral Health Centers.
– Extends for two additional years a contract with the state’s enterprise management system
Targeted Certificate of Need Changes
While broader CON reform did not pass, lawmakers did approve a targeted bill with facility-specific changes. HB 569 did tweak some existing requirements such as doubling the current $1.5 major medical expenditure CON threshold to $3 million; and it authorized Medicaid reimbursement for Parkwood Behavioral and authorized new psychiatric and long-term care capacity in Madison and Harrison counties. However, a Senate provision also authorized a CON for a psychiatric hospital in Jackson that St. Dominic’s Health is transferring to Oceans Behavioral, despite a series of court rulings rejecting the arrangement that would require no charity care. Gov. Tate Reeves said during his post-session press-conference the issue of CONs could be one for the special session, suggesting he may have issues with granting a CON through legislation and could be considering a veto.
Paid Parental Leave for State Employees
Starting in 2026, state employees who are primary caregivers will receive six weeks of paid parental leave following the birth or adoption of a child. HB 1063 passed with bipartisan support and mirrors similar policies adopted in nearby conservative states. Lawmakers noted that the policy comes at no new cost to the state.
EDUCATION
DEI Ban
Lawmakers passed a sweeping bill to prohibit Diversity, Equity, and Inclusion programs in all public K-12 schools and higher education institutions. HB 1193 bans mandatory diversity training and the use of diversity statements in hiring. The bill allows students, faculty, and others to file complaints. Schools will have 25 days to resolve complaints before lawsuits can be filed in chancery court.
School Choice Option for Military Families
Lawmakers passed legislation this session to expand school choice options for military families. HB 809 clarifies that children of active duty or Active Guard and Reserve members of the United States Armed Forces may attend the school district and school campus of their parent’s choosing, regardless of residency. This includes children of civilian military personnel who live on a military base. The law outlines that transfers can occur once per year and do not require reapplication for continued enrollment, though districts are not obligated to provide transportation. If a school lacks capacity, the board may deny the request. The bill also defines key terms like “active duty” and “Active Guard and Reserve duty” and sets specific documentation requirements to verify eligibility.
ELECTIONS AND REDISTRICTING
Redistricting Maps Approved
Mississippi lawmakers finalized legislative redistricting plans this session following a federal court order requiring the creation of additional majority-Black districts. The House and Senate each passed new maps and adopted each other’s proposals in joint resolutions (JR 1 and JR 202), setting the stage for 15 special elections in November.
The court-mandated changes impact both chambers but are especially notable in the creation of new majority-Black districts in DeSoto and Forrest counties. The House’s revised map creates a new district in House District 22 and adjusts four others. In the Senate, the redrawn lines affect 10 districts.
These changes stem from a federal lawsuit brought by the Mississippi NAACP, which argued that the 2022 maps diluted Black voting strength in violation of the Voting Rights Act. A federal judge agreed, ordering the state to redraw lines before the 2025 election cycle. Candidates will qualify in May, with primaries scheduled for August 5 and general elections set for November 4.
These legislative redistricting plans are still subject to final approval by the federal court, which will review the new maps to ensure compliance with the Voting Rights Act and constitutional standards.
In addition to legislative redistricting, lawmakers also adopted SB 2768, which updates Mississippi’s judicial redistricting plan. That legislation revises circuit and chancery court districts based on population shifts and caseload needs. It represents the first major overhaul of judicial maps in decades and is expected to help balance workloads more fairly among judges across the state.
ECONOMIC DEVELOPMENT AND REGULATION
New Department of Tourism Created
SB 2573 removes tourism promotion duties from the Mississippi Development Authority and establishes the Mississippi Department of Tourism. The new department will manage marketing, grants, and advertising, with a portion of restaurant and hotel tax revenue redirected to fund its operations.
Property Cleanup and Redevelopment Incentives
HB 733 creates the Property Cleanup Revolving Fund, offering small grants to municipalities to address tax-forfeited and blighted properties. HB 1201 provides tax credits for qualifying redevelopment projects, up to 50,000 dollars for residential sites and 100,000 dollars for commercial properties.
Direct Wine Shipments Approved
After years of debate, SB 2145 legalizes direct shipment of wine to Mississippi consumers, allowing up to 12 cases per year per vineyard. The bill includes safeguards for local retailers and was signed into law with broad bipartisan support. The bill was signed by the governor and will go into effect on July 1, 2025
DEAD BILLS
Pharmacy Benefit Manager Restrictions: After significant debate throughout the session, legislation to increase state-level regulation of pharmacy benefit managers ultimately failed to pass. The conference report on HB 1123 included added code sections that prompted a point of order on the House floor. Speaker Jason White ruled the point well taken, sending the bill back to conference, a move that effectively ended the proposal for this year. The bill had sought to increase transparency around prescription drug pricing, prohibit certain PBM practices, and establish new oversight authority for the Board of Pharmacy. Lawmakers acknowledged the complexity of the issue and signaled that further discussion may continue next session.
Mobile Sports Betting: The House passed a bill to legalize mobile sports wagering and later inserted it into a Senate bill to keep the issue alive. The Senate declined to take up the proposal, citing concerns from casino operators and a lack of consensus on regulation and taxation. Supporters argued the move could generate over 50 million dollars in revenue and curb illegal betting, but lawmakers appear content to hold off for now. Expect renewed debate in 2026 as more states expand online gaming.
Ballot Initiative Restoration: This year’s effort to restore the state’s citizen-led ballot initiative process failed to advance past the House. The resolution would have allowed voters to propose new state laws through signature gathering, but excluded issues related to abortion and made no provision for constitutional amendments. Lawmakers could not agree on signature thresholds, geographic requirements, or how to prevent out-of-state influence. Despite broad public support for some form of initiative rights, this issue has now stalled multiple sessions in a row.
Remote Work Oversight: A bill that would have required all state agencies under the State Personnel Board to report detailed information about remote workers died. It also would have allowed the board to withhold approval of personnel actions from noncompliant agencies. Supporters said it was a basic accountability measure; critics saw it as unnecessary micromanagement. The bill died after a point of order was well taken in the House, due to added code sections during conference.
Jackson Casino Proposal: A bill to allow a 500-million-dollar resort casino in Jackson’s Capitol Complex stalled amid political resistance from lawmakers in other gaming regions. Supporters pitched it as an economic development boost for the capital city, but existing casino operators in places like Vicksburg and the Gulf Coast raised concerns about market saturation. Although the bill failed to move forward, private developers remain interested, and similar proposals could resurface in future sessions.
In-Person Excused Voting: Lawmakers initially reached a compromise on early voting, which would have established an in-person, excuse-required voting period beginning 22 days before an election. The bill was framed as a middle ground between traditional absentee voting and broader early voting, allowing voters with valid reasons, such as work conflicts or caregiving responsibilities, to cast ballots ahead of Election Day. While both chambers passed the bill with bipartisan support, a motion to reconsider was entered late in the process, and the measure ultimately died before reaching the governor’s desk. Expect this issue to resurface as debates over voting access continue in future sessions.
Medicaid Expansion: While placeholder bills were filed in both chambers, no real attempt was made this session to advance Medicaid expansion. Legislative leaders have said they are waiting to see what direction federal health policy takes before considering expansion in Mississippi. Business groups, hospitals, and some Republican lawmakers continue to advocate for increased coverage, but no deal emerged this year.
School Choice: While one targeted school choice bill passed, most broader proposals stalled in the Senate. These included efforts to expand charter schools into C-rated districts, allow students to transfer between public school districts without home district approval, and the so-called “Tim Tebow bill,” which would have permitted homeschool students to participate in public school extracurricular activities. Supporters viewed the legislation as a way to give families more flexibility, especially in underperforming school districts. Opponents expressed concerns about fairness, funding shifts, and unintended consequences for public school operations. Governor Tate Reeves has indicated that school choice remains a priority for his administration, and he could consider including one or more of these proposals in the upcoming special session or future sessions.
AROUND THE STATE
Public Hearing on SWAP Rules (April 17)
MDEQ will hold a public hearing on April 17 on its proposed State Water Alteration Program regulations. The rules define “waters of the State” and outline exemptions for activities such as ditch maintenance, farming, and development. Comments are due on the same day.
March Revenues Beat Expectations
March revenue numbers provided a glimmer of good news. The Legislative Budget Office reported that collections were 21.8 million dollars above the monthly estimate, bringing year-to-date totals just slightly above projections. However, revenue remains down more than 70 million dollars from the same period last year.
Mississippi’s Momentum
Mississippi is turning heads. With education gains, a wave of economic development, and recent legislation passed which will see the elimination of the state income tax, the state is earning a new reputation. As Russ Latino of the Magnolia Tribune wrote in a recent National Review piece, “Mississippi has momentum. It’s undeniable.”
Governor Tate Reeves signed into law the Build Up Mississippi Act, phasing out the state’s personal income tax and cutting the grocery tax while boosting infrastructure funding and supporting the state retirement system. These reforms are the product of years of work by conservative leaders, who’ve also helped steer the state to first in the nation for math and reading gains and over $26 billion in new tech investment. Mississippi’s transformation may still be underway, but the progress is real and getting noticed. (Source: National Review, April 2025 – Russ Latino)
