“I believe the additional money Mississippians will save on taxes will be reinvested in the state’s economy,” Bryant said in a statement.
He estimates that roughly 300,000 households will save an average of $250 a year under the plan, according to the Associated Press. Examples of residents who could benefit from the tax break include: a married couple with three or more children making up to $52,427 or a single childless individual making less than $14,590.
The tax break would only be available when the state’s rainy-day fund — capped at 7.5 percent of appropriated funds — is full.
That reserve-fund limit ranks among the middle of the pack of states that impose caps based on year-end surpluses, according to data from the Center on Budget and Policy Priorities and the National Conference of State Legislatures. A handful of states set a 5 percent cap, while a number set caps at 10 percent or more. Some have no such cap.
In a July report, the Pew Charitable Trusts reviewed state rainy day funds and recommended that the size of such funds be based on how volatile tax revenues are. Mississippi ranked among the 10 least-volatile states, based on the standard deviation of annual changes to total tax revenues from 1994 to 2012. Most state caps fall somewhere in the 5 percent to 15 percent of general fund revenues range, according to NCSL.
Bryant’s budget also calls for a nearly $53 million increase in K-12 education spending, bringing the state’s Mississippi Adequate Education Program funding total to nearly $2.2 billion. That increased funding would go to early-learning efforts, student financial aid, teacher training and teacher pay raises of $2,500.