3/18/25 Legislative Update

Here is a quick update on several significant issues under consideration at the capitol:

Tax Credits for Private School Donations: The Senate Finance Committee passed an amended version of HB 1902 Monday afternoon. The Committee did not consider HB 1903, so it died on the calendar with tonight’s floor deadline for appropriation and revenue bills. As we have shared previously, HB 1902 increases tax credits the state may award via the Children’s Promise Act for donations to private schools. Tax credits reduce the amount of state revenues available to fund critical state services, including education, and are a form of vouchers.

Senate Finance’s amended HB 1902 failed in the full Senate this afternoon by a vote of 23-26, but the bill was held on a motion to reconsider so it could be considered again as early as tomorrow. Click here to see how your senator voted today. Please contact your senator before 10:00 a.m. tomorrow, March 19, when the Senate reconvenes and ask him/her to vote against HB 1902 if it is brought up for another vote. Please thank those senators who voted against the bill and ask them to stand firm in their opposition if HB 1902 is brought up for another vote.  

House Ways & Means Committee Chairman Trey Lamar of Senatobia is so determined to increase state resources for private schools that he included Children’s Promise Act language in SB 3126, SB 3165 and SB 3167 today to allow tax credits for donations to private schools. These bills are headed back to the Senate for consideration. We are adding these three bills to our bill tracking spreadsheet.

Tax Cut Plans: Both the House and the Senate announced revised tax cut plans Monday. Both chambers then passed their respective revised plan today. While the Senate previously opposed eliminating the state income tax, its revised plan would decrease the income tax rate by .25% each year until 2030 and then reduce it at specified rates if certain triggers are met. As described below, the Senate also included language in its revised plan to create a new Tier 5 for employees who become members of PERS on or after March 1, 2026. House revisions include increasing the state sales tax from 7% to 8%, rather than the 8.5% the House originally proposed.

Each chamber amended the other chamber’s original tax cut bill to include their respective revised plans. The House voted 91-27 today to pass its revised plan via an amended SB 3095. Click here to see how your representative voted. The bill is being held on a motion to reconsider, so it could be considered again before heading back to the Senate.

The Senate voted 32-16 this afternoon to pass its revised plan via an amended HB 1. Click here to see how your senator voted. The bill is being held on a motion to reconsider, so it could be considered again before heading back to the House.

Assuming the motion to reconsider is tabled in each chamber, the amended versions of SB 3095 and HB 1 will then head back to their original chamber for consideration. Legislators will most likely not agree with other chamber’s amendments and will invite conference on the bills. A conference committee comprised of three representatives and three senators will then attempt to negotiate a compromise before the end of the session.

PERS: As shared above, the Senate inserted its plan to create a new Tier 5 for employees who become members of PERS on or after March 1, 2026, into its HB 1 amendment. While the House version of HB 1 included $100 million in dedicated funding each year for PERS, the Senate’s amendment for HB 1 does not include any dedicated funding for PERS. Senators David Blount and Hob Bryan spoke passionately against this new Tier 5 during today’s Senate floor debate. As shared above, the Senate voted 32-16 to pass its amendment for HB 1, including this new Tier 5. The bill is being held on a motion to reconsider, so it could be considered again before heading back to the House where we expect representatives will invite conference. 

If the proposed Tier 5 should ultimately pass and become law, it significantly decreases retirement benefits for teachers and other PERS members who become PERS members under the new Tier 5.  As reflected in our legislative priorities, MPE has expressed concern that a new Tier 5 that provides reduced guaranteed benefits will negatively impact teacher recruitment and retention.