Tax Hikes Loom for Mississippi Municipalities as Retirement System Funding Bill Fizzles

JACKSON, Miss. – City and county governments in Mississippi are facing a tough decision after a bill that would have decreased the employer contribution to the state retirement system for government workers failed to pass. Supporters of the proposal warn that without this change, local governments may have to resort to raising taxes or cutting employees to make up for the increased costs.

House bill 1590, which did not move forward in the Senate committee before the deadline this week, aimed to reverse a 2% rise in the employer contribution to the state Public Employees Retirement System set to go into effect on July 1. The PERS officials argued that the additional funding is necessary due to the system’s $25 billion unfunded liability as it continues to provide monthly retirement benefits to 300,000 state retirees.

Hattiesburg Mayor Toby Barker, who also serves as the president of the Mississippi Municipal League, expressed concerns about the potential financial strain on cities, towns, and villages in the state. The planned 5% increase in employer contributions over the next three years could add up to millions of dollars in new expenses for municipalities like Hattiesburg.

Furthermore, the bill, if passed, would have changed the composition of the PERS board of trustees, replacing the current elected members with political appointees chosen by the governor and lieutenant governor. This proposed shift raised worries among retirees and employees about the potential unknown agendas of the new trustees.

Members of the Mississippi Retired Public Employees Association voiced support for the existing board, crediting them with effectively managing and growing the fund while prioritizing the well-being of retirees. They criticized the Senate’s failure to address the long-term sustainability of the state’s retirement program, calling it irresponsible to both PERS participants and Mississippi taxpayers.

House Speaker Jason White emphasized the importance of finding a solution to ensure the long-term viability of the PERS system, urging collaboration between the Senate and the House. Lt. Gov. Delbert Hosemann echoed this sentiment, highlighting the need for transparency and trust among all stakeholders to move forward.

As the legislative session continues, Mayor Barker remains hopeful that lawmakers will allocate additional funding to PERS before adjourning. The fate of the state retirement system and its impact on government workers and retirees hang in the balance as stakeholders navigate the complexities of pension funding and management.