Jackson, Mississippi, November 30, 2025
Governor Tate Reeves has unveiled the Fiscal Year 2026 budget for Mississippi, outlining critical plans to eliminate state income tax, boost economic growth, expand education options, invest in infrastructure, and maintain fiscal stability. This budget aims to reshape Mississippi’s financial and social landscape starting next fiscal year.
Elimination of State Income Tax
A cornerstone of Governor Reeves’s FY 2026 budget is the phased elimination of Mississippi’s state income tax. This strategic move seeks to restructure the state’s tax system to attract both residents and businesses. The budget includes allocations to sustain fiscal stability despite reduced income tax revenues, setting a foundation for this major reform.
Economic Development and Job Creation
Continuing efforts to sustain Mississippi’s economic momentum, the budget channels funding into infrastructure and workforce development. These investments aim to support ongoing private sector growth, encouraging record levels of investment and job creation. Keeping unemployment rates low remains a key objective.
Education Reform and School Choice Expansion
The budget prioritizes education reform by fully funding the waitlist for the Educational Scholarship Account (ESA) program. This expansion focuses on increasing school choice, particularly for students with special needs. This initiative underscores Reeves’s agenda for enhanced parental rights and provides alternatives to traditional public schooling.
Infrastructure and Community Investments
Significant budget allocations are earmarked for infrastructure improvements across the state. This includes grants targeting downtown revitalization and specific upgrades to LeFleur’s Bluff State Park. These projects aim to enhance the quality of life in Mississippi’s urban and recreational areas, attracting residents and visitors alike.
Fiscal Responsibility and Reserve Funds
Demonstrating a commitment to prudence, the FY 2026 budget reserves two percent of projected revenue—approximately $152.5 million—and maintains $2.76 billion in reserve funds. This fiscal discipline is intended to safeguard the state against potential economic downturns or revenue shortfalls.
Political and Legislative Dynamics
While the budget pursues ambitious goals, including tax reform and expanded school choice, these priorities are expected to encounter rigorous scrutiny in the special legislative session. The partisan nature of these debates highlights the political complexities involved in finalizing the budget.
Impact on Public Services and Workforce
Beyond tax and education policy, the budget addresses workforce challenges by requesting $1 million to expand childcare access. This reflects an awareness of broader social needs that affect workforce participation and family stability within the state.
State Fiscal Health and Credit Outlook
By balancing the pursuit of tax reform with investments in essential services and maintaining strong reserves, the budget aims to preserve Mississippi’s fiscal health. How successfully this balance is maintained will influence the state’s credit rating and long-term financial outlook.
Governor Reeves’s FY 2026 budget positions Mississippi at a critical juncture, aiming to deliver economic growth, social reform, and fiscal stability. The outcomes of this budget will play a decisive role in shaping the state’s economic and social trajectory in the coming years.