While the Mississippi Legislature puts most of its focus on tax cuts as a way to boost the state’s economy and reverse its population decline, it continues to ignore the more powerful tool it has had at its disposal for the past eight years: Medicaid expansion.
Recently, Bobby Harrison, one of the Capitol reporters for Mississippi Today, compared the analyses done five months apart by the nonpartisan state economist on the impacts of Medicaid expansion and the massive tax overhaul championed by House Speaker Philip Gunn.
There is, in a nutshell, no comparison. Extending Medicaid benefits to the working poor would do more for the state, at least for the first five years and probably indefinitely, than Gunn’s desire to eliminate the personal income tax, cut the cost of car tags in half, reduce the tax on groceries while raising the sales tax on most everything else.
Not to get bogged down in the numbers, but a few from the two studies are worth emphasizing.
- In 2024, Medicaid expansion would create 2½ times as many new jobs as the tax-cut plan. Three years later, the difference would be 6-to-1.
- In 2024, Medicaid expansion would raise the state’s gross domestic product — the total value of its goods and services — by almost $800 million, more than double the impact of the House tax cut. Again, the gap just grows with time. By 2027, Medicaid’s impact on GDP would be five times higher than the tax cuts.
- Although neither effort would do much by itself to increase the state’s population, even there Medicaid expansion beats the tax cuts by about the same margins.
The House plan, of course, is not the only tax-cut plan in the works. The Senate has a more modest idea about how much revenue Mississippi government can stand to forgo. But the logic stands that if the most radical (and risky) tax-cut plan is a weaker economic driver than Medicaid expansion, so, too, would be the less dramatic alternative.
Tax-cut proponents have said the state can afford to do this — and raise teacher pay by more than $200 million a year — because the state is so flush with cash right now. Problem is, that prosperity is not going to last, since it’s largely based on a massive federal infusion of coronavirus relief funding. Medicaid expansion, by contrast, is the gift that would keep on giving, with the federal government committed to picking up at least 90% of the cost for as long as the expansion law stays on the books — in other words, most likely into perpetuity.
Given the present budget surpluses, some tax relief is in order, such as the onetime rebate proposed by the Senate or a lower grocery tax, as both chambers advocate. But rather than going whole hog with tax cuts, as Gunn wants, it would be a much better, long-term economic strategy to expand Medicaid, as all but a dozen states have already done.
The cost to Mississippi — and it’s debatable, once all the effects of Medicaid expansion ripple through the economy, whether there would be a cost at all — would be at worst about one-fifteenth as much as Gunn’s tax-cut plan. The financial return would be significantly higher, and that’s not even counting the benefit of providing a couple hundred thousand working adults with medical coverage.
How come most of the Republican leadership in this state can’t see this? Because they have let the politics of Medicaid expansion blind them to rational analysis.
Tax cuts are a Republican priority, Medicaid expansion is a Democratic one. It doesn’t matter how much better the Democratic idea might be, most Mississippi Republicans simply refuse to consider it.
