House passes bill to create tax-free holiday

Mississippi would have a tax-free holiday under a bill passed Tuesday in the House.

The bill would enact a sales-tax holiday the last weekend in July, allowing the state to forgo its usual 7% take on items like shoes and clothing.

The bill passed 119-2.

According to the Federation of Tax Administrators, 15 states and the District of Columbia gave shoppers a sales tax holiday during 2007. Among them were 3 of Mississippi's neighbors - Louisiana, Tennessee and Alabama.

House Ways and Means Chairman Percy Watson, D-Hattiesburg, says the sales tax exemption would apply to clothing that costs less than $100.

The exemption wouldn't apply to jewelry, handbags, luggage, umbrellas, wallets, watches, backpacks or briefcases.

The bill is House Bill 212.

House and Senate Appropriations committees passed other bills Tuesday, many designed to create a funding cushion for next year's budget.

The Senate bill raids several pots of money outside the regular revenue stream, including the criminal justice fund and the unclaimed property fund. The bill also intercepts the tobacco payment made to the health care trust fund and suspends the 2 percent set aside for the state's rainy day fund.

In addition, the bill takes $82.5 million from the state's hurricane reserve fund that was created to provide match money for federal grants used for storm recovery projects. The federal government doesn't require the state to provide a match for Hurricane Katrina projects.

With all those adjustments, lawmakers would have an additional $306 million to spend above the fiscal year 2009 budget estimate of about $4.9 billion.

The House Appropriations Committee passed a bill that delays the $38 million repayment to the health care trust fund.

Another bill approved Tuesday places a freeze on hiring and equipment purchases at state agencies. The bill would free up about $20 million.

Economists predict slow revenue growth in Mississippi for next several months, which means lawmakers will have a tight budget on which to draft spending plans for state agencies during the fiscal year that begins July 1.

Several agencies have requested extra funding next year, but the current budget estimate barely provides enough for level funding across state government. The tight budget could mean taxpayers pay higher fees for services.

Medicaid is facing a $92 million deficit this fiscal year. Lawmakers have been told the program needs an extra $168 million in funding for next fiscal year.

Some of the other bills passed out of committees on Tuesday would:

- Create a Web site the public can use to track agency spending,

government contracts and bond proceeds. The site would be created

by the state Department of Finance and Administration.

- Create a pre-kindergarten task force to study early childhood

education and recommend ways to implement a program.

- Require all school superintendents to be appointed and all

school board members be elected.

- Give the media and public more access to law enforcement

incident reports if an investigation is no longer ongoing.

The bills are Senate Bills 2149, 2912, 2728; House Bills 609,

763, 725, 438.

The Associated Press contributed to this report.