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(Drew Hall) MDOT presents The Extra Mile Podcast.

(Will) Welcome in to another edition of the Extra Mile Podcast. I am Will Craft, uh, working over at MDOT. I am solo today. Now, if you'll notice, my cohost Paul Katool is out of the office, uh, having some good stuff, uh, some good times out there. I believe he's down in Natchez. So if you, if you run into him, give him a hard time out there, but, um, the 2025 legislative session is underway and we are here today, uh, with House Ways and Means Chairman Trey Lamar, uh, to talk about what is, if not, uh, the biggest piece of legislation, especially for MDOT concerns in quite some time. So first off, thank you, Chairman. We greatly appreciate the efforts and getting that conversation started.

(Trey Lamar) Will, I appreciate the opportunity to be with you today and look forward to talking about House Bill 1.

(Will) Yeah. And with that being said, let's just get right into it. So how did this come to be? And where are we at today?

(Trey) So, uh, Will, House Bill 1 is our, is our effort to eliminate the income tax in the state of Mississippi. Uh, uh, and cut the grocery tax in half and also, uh, fix our, uh, historic, uh, funding, um, problems when it comes to how we fund and pay for our highway system in the state of Mississippi. Uh, this is something, an effort, obviously we started, uh, working on reducing the income tax back in 2016, I believe it was, when we first had our first bill. Uh, and then at that point in time, we've continued to reduce it. And now 10 years into it, you know, we're at a place where we can see the light at the end of the tunnel, and we can go ahead and put into, into legislation, the actual full elimination of the tax on work in Mississippi is part of that.

Uh, we've come up with a way to, um, uh, to incorporate additional funding for MDOT. Uh, so we can, uh, for once and for all finally take care of our highways and our infrastructure system as well as our State Aid roads, uh, and our multimodal with rails and ports and airports across the state to the tune of about $500 million each year in recurring funding for those, uh, programs.

(Will) As you just mentioned there, the House Bill does, incorporates lots of things, all kinds of stuff going on in there. Uh, specific to MDOT, though, lots of good stuff. Let's, let's break some of those numbers down some more.

(Trey) Yeah, glad to. So, uh, Will, we've got, um, House Bill 1 would add a Uh, as part of the, the tax-cut process, we also move some other taxes around as we move toward a more consumption-based tax code here in Mississippi.
We would add a 5 percent sales tax on the retail sale of fuel. Uh, and that would be, uh, wouldn't affect farmers or, or manufacturing or maritime fuel, but really anybody using the roads in the state of Mississippi.

(Will) Right.

(Trey) Uh, like a user fee. Um, just, you know, if you pay for, if you use it, you're going to pay for it. And so, we would put a 5 percent sales tax, incorporate that, incorporate that into, uh, the, the price that's paid at the pump.

(Will) Right.

(Trey) That would generate, uh, approximately on average around 400 million per year and additional funding for MDOT. In addition to that, uh, we would add a one and a half cent sales tax at the city level and at the county level outside of the cities that would go to help give additional money inside the cities, uh, to our cities that they could in turn use for city streets, infrastructure, things of that nature. Each city in the state would get a 15 percent increase to the amount of funding that they currently get. Uh, and the, the sales tax, the one and a half percent local sales tax out in the counties would generate about $80 million.
And that money would go, uh, to, uh, add additional funding to the Office of State Aid Road Construction.

(Will) OK.

(Trey) In addition to that, uh, the multimodal program at MDOT will get about another $20 to $25 million in annual recurring revenue, uh, from the lottery proceeds.

(Will) Yeah.

(Trey) And all told, it's a $500 million, uh, it's over $500 million in new money. for those transportation and infrastructure systems.

(Will) Yeah. And I mean, one thing you said this, I think explicitly already, but we'll make sure I paint this point. We're not talking about just an MDOT bill. We're not talking about just an airports bill. I mean, this is all-encompassing. You are going to hit every aspect of infrastructure essentially in the state of Mississippi.

(Trey) Yeah, that’s right. And we do it as part of an overall large tax cut. So, we're not burdening the people. Uh, we will be cutting over the 10-year period of the bill, uh, $2.2 billion in annual, um, current annual money that's coming into the state by way of taxes that will be cut out of our, our state revenue, and be replaced with the taxes that I just talked about that are about roughly 1 billion. And that leaves, leaves us with about a $1.1 billion net tax cut for the working people of Mississippi.

(Will) Yeah, and I mean it’s something to be said. I'll make sure you know, we're very appreciative. And obviously, you know, we've had statements out there right now from, from our chairman and executive director, Brad White, and chairman of the commission supported the bill. I'm sure there are folks out there right that probably have issues and problems with this. You know, they want to change this, that, and the other. It may not be perfect for everybody. It's a work in process, progress. But, man, to uh, to have such a large net tax cut that is going to impact everybody, me, my wife, my kids, you know. It helps me put more groceries on the table while also shoring up, you know, our state's infrastructure system. And then the last piece of the puzzle, we haven't really talked about yet. And again, this is not necessarily MDOT, but all state employees. PERS is getting a little shoring up out of this too.

(Trey) Yeah, um, because we were able to provide $500 million plus to, to the infrastructure system to PERS and Office of State Aid Roads. Uh, we're able to take the existing lottery money that we're currently spending that's going to MDOT and we're going to take the first $100 million of that lottery system, uh, and put it into the PERS system to shore it up, uh, on an annual recurring basis in perpetuity.
And so, uh, that additional $100 million a year go to PERS, uh, and will continue to go to PERS until PERS becomes 80 percent funded. Uh, which is what we need to help us continue to make those promises for the state's retirees.

(Will) It's good stuff. I mean, again, you know, doing all those cuts and slashing, but still shoring up so many other things that are critical, you know?

(Trey) Yeah, it's uh, and what that does, the last several years, um, MDOT and PERS concerns about how funding highways, paying for highways, how we're going to continue to shore up our retirement system. Those have taken a, uh, kind of a strain on our state general fund. So, by, uh, finding dedicated funding sources for those needs of government and those real core functions of government, we're able to free up. Um, free up that strain on our general fund, which allows us to reduce taxes elsewhere and uh, eliminate the tax on work, which would be great for working people of our state.

(Will) Absolutely. Uh, I, I’m scared to even ask this, ‘cause I’m sure there exists, but have you heard any, any negative feedback, any things on the bill?

(Trey) The only thing I’ve heard are people that have not taken, uh, the opportunity to, to look at the numbers. They, they think it may be too good to be true or can't be true, but, uh, we've got all the numbers to back it up. DORs run the numbers. Uh, we've looked at it, um, you know, every way you can look at it and, and the numbers bear out. If you're a working person in this state, you're gonna see a substantial net tax cut to your bottom line. And even if, if you don't pay income taxes currently, it may not help you a lot, but it doesn't hurt you.

(Will) That's very true. Very true. I didn’t think about that. Yeah, it doesn't hurt you at all.

(Trey) No, it doesn't hurt you because we, uh, if you don't pay income taxes, you certainly are buying groceries because you're eating and we're cutting the grocery tax substantially. And that's, that's where the savings are made up there.

(Will) And again, hey, you know, even those people out there, you know, that may not pay income taxes, I'm sure they want a good road, too, so.

(Trey) They certainly do.

(Will) We'll get a piece of that as well. Uh, well, aside from House Bill 1, you know, again, we, we can, we will, I'm certain beat this horse to the proverbial death over the coming weeks and months. And as passionate as you are about this and me as well, I'm sure we're gonna get tired of talking about it after.

(Trey) That's okay. We need to get this across the finish line. You know, I've worked closely with Speaker Jason White on this bill and through, through the uh, through his office, uh, and the messaging that we're able to get out, we, we have met with, uh, spent yesterday meeting with, uh, the entire road building community, the entire business community through the BIPEC organization, which, which reaches across multiple sectors and every city, all the mayors, uh, are in town this week and I spent a considerable amount of time yesterday meeting with the cities and mayors and explaining the bill to them. And once they understand it and they realize that this is an overall net tax cut for the citizens and at the same time provides 15 percent more funding for cities to take care and service the real needs of their citizens in their local towns and cities, uh, they, they jumped on board and they're very supportive of the effort.

(Will) Love to hear it. Anytime we can get all hands, you know, and all the mouths singing off the same sheet of music, um, good things will happen.

(Trey) That's right.

(Will) And, uh, no better time, and again, I think we talked about this with the Speaker, uh, when he was on with us a couple months ago, but it just seems like there's a lot of things pulling in the right direction.

(Trey) Well, we hope so. I mean, this is a huge effort. One thing I want to emphasize a little bit more is that the, the Office of State Aid Road Construction has been, uh, underfunded and running about an $80 to $100 million deficit every year. Uh, to the tune where the counties, our boards of supervisors have made it their number one issue. Um, and so by getting an additional $80 million in funding to the Office of State Aid Roads, uh, is, is, is really exciting for our boards of supervisors across the state because those are, those are, those are real needs, uh, in, in every county, all 82 counties from Tennessee to the Gulf Coast.

(Will) Absolutely. Love to see it. I love to see it. Uh, I think that it's probably about all the questions I can ask you, uh, as far as that bill, uh, goes there, we're gonna be working hard on it. Uh, we'll get it through the finish line as quickly and as efficiently as we possibly can. Any other legislation that you got your eye on?

(Trey) Well, uh, yeah, we'll have some other tax credit legislation, some business-friendly legislation. Uh, and then obviously we've got, uh, we're blessed with, with Surpluses that we need to that we're going to look at spending at the end of the session and hopefully we'll, we'll all be able to agree to do that in a wise way that helps folks back home

(Will) Absolutely, you know, we're just getting kicked off over here. I say we, you guys just getting kicked off. We're halfway through the second week. It's about 12 more weeks to go, lots of work to be done.

(Trey) Yeah, we hit the ground running this year, that's for sure.

(Will) Absolutely, yeah, getting that thing through committee quick.

(Trey) Well, I really appreciate MDOT, and I appreciate the employees of MDOT.
I know they work hard all over the state and thank you for what you do.

(Will) Yes, sir, appreciate you saying that. With that, folks, we'll wrap it up. Thank you again, Chairman Lamar, for coming, for having us over where we're over here in your office today, taking up your time. So greatly appreciate that. Greatly appreciate all the work on this bill and legislation. Everything else for MDOT that you've been a part of, uh, to our folks out there listening. Appreciate you. Uh, I will not even attempt to give the exact spiel that Paul does at the end of every episode. He's got it ironed out. But, uh, go check us out where podcasts are found. Thank you all for listening with us and drive safe out there on Mississippi roads.

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