MS Lawmakers Finalize ’25–’26 Conservative Budget in Special Session
No new construction spending, agencies get modest adjustment
Mississippi lawmakers, who had been unable to reach a consensus on spending decisions during the regular session, finalized a $7.1 billion state spending plan for the coming fiscal year during a two-day Special Session called by Gov. Tate Reeves. The 2025 regular legislative session will be remembered for the adoption of a plan to phase out the state’s personal income tax. However, differences between the chambers over how to handle that legislation ultimately prevented an agreement on the budget for the fiscal year beginning July 1, 2025.
Gov. Reeves, who is generally hesitant about using tax dollars to fund special sessions, told lawmakers he would only call them back once leadership in both chambers assured him of a detailed agreement on agency spending. That plan, unveiled in approximately 100 bills during the session, does not include funding for construction projects such as dorms or libraries at universities, new buildings for agencies, or local projects that lawmakers typically bring back to their districts, such as targeted road improvements or extra funds to refurbish courthouses. Lawmakers are expected to resume construction spending in future sessions, provided economic growth continues.
The budgets for agencies also represented a return toward “normal’’ as many reflected a reduction and in most cases an end to pandemic-related federal spending programs that has flowed through agencies over the last several years, shoring up everything from hospitals to local sewer projects. Instead, this spending plan – slightly under the current year’s state dollar allocation of $7.3 billion. Notably, the budget:
- 6.44% increase in Medicaid
- 6.44 % increase in Department of Environmental Quality
- 8.80% increase in the Mississippi Development Authority (40m for site development)
*To view the entire FY 2026 State Budget please click on the two links below:
The session was also marked by what it did not consider. Gov. Reeves, who has authority to set the “call” or agenda of a special session, had indicated he might allow further consideration of legislation he vetoed after the regular session adjourned—namely, reforms to the state’s Certificate of Need law and the detailed statute governing the Medicaid program. However, in announcing the session, he noted that as more issues were contemplated, the more complex and difficult reaching a budget consensus became, and he chose not to risk it.
The special session was notable for some emerging political drama as well. Auditor Shad White, a potential candidate for governor, spoke out vigorously against a proposal to limit some of his spending authority; an effort to make an exception to the no-construction projects agreement with a $17 million expenditure at a state park in Jackson and to Mississippi’s Children’s Museum fell flat and died during a late night vote on the House floor; and a surprise $2m expenditure in the state’s Health Department Budget to reimburse Methodist Rehab Center in Jackson for the hospital tax it pays (without getting reimbursed in a Medicaid supplemental payment program for which it can’t qualify due to its unique classification) is almost certain to face either a line item veto or failure to execute after officials realize it runs afoul of federal rules on such “hold harmless’’ efforts.
Tensions between the chambers, tenuous at best after income tax negotiations during the regular session were exacerbated. The House adjourned before the Senate had finished its final budget work, effectively shutting the door on any last-minute adjustments or corrections.
Lawmakers completed their work in two days, finalizing the full slate of agency budgets and adjourning the special session. While debate over process and priorities persisted, the session ultimately delivered a conservative balanced spending plan before the July 1 start of the new fiscal year. The final budget now heads to the Governor’s desk for signature.
Governor Reeves described the budget as a conservative success that maintains Mississippi’s strong financial position, sets the stage for future tax relief, and supports workforce and economic development. He also noted he would use his constitutional authority to address specific provisions that did not meet his criteria. Lt. Governor Hosemann emphasized the Senate’s efficiency and fiscal responsibility, raised concerns about late changes introduced by the House, and expressed appreciation for the Governor’s role in resolving those issues. Speaker White defended the House’s approach to transparency and local priorities, criticized the Senate for opposing infrastructure projects, and previewed key 2026 House initiatives, including long-term funding for PERS and school choice legislation. Full statements from leaders are linked below in addition to Speaker White’s pre session interview on SuperTalk. A special session recap from The Magnolia Tribune is also linked below for further analysis of the budget process and its broader implications along with an article that takes a closer look at how the disputes between the two chambers unfolded. In addition, you will find a link to the State’s latest revenue report.
Statement from Governor Tate Reeves
Statement From Lt. Governor Delbert Hosemann
Statement from Speaker Jason White
Hosemann, White recap special session, address tension between chambers
