By Bobby Harrison/NEMS Daily Journal
JACKSON – Mississippi tax collections were $46 million, or 8.2 percent, below the estimate for the month of April, reversing a trend of positive monthly collections.
Financial experts often have warned legislators and the governor not to place too much stock on collections for one month. They normally say it takes multiple months to determine if a trend has developed.
And often, glitches might skew collections for one month.
Kathy Waterbury, a spokeswoman for the Department of Revenue, said of the drop, “We think the majority of it may be due to timing of receipts/processing. We won’t know for certain until all of the income tax mail is opened and processed, which should occur this month.”
The entire loss can be attributed to individual income tax collections, which came in $65.7 million, or nearly 27 percent, below the estimate for the month. The loss was offset in part because of better-than-anticipated collections of corporate income taxes, sales taxes and insurance premium taxes during the month of April.
The estimate – made by legislative leaders upon advice of the state’s financial experts – is important because it represents the amount of money available for the Legislature to appropriate. If collections for the year fall below the estimate, the governor could be forced to make cuts or to dip into the state’s reserves.
While revenue collections for April were significantly below the estimate, collections are $92.5 million above the estimate for the fiscal year, which ends June 30. The $92.5 million includes a one-time collection of $35.2 million from the settlement of lawsuits against pharmaceutical companies by Attorney General Jim Hood.
Tax collections, not including the $35.2 million in lawsuit settlement funds, are $50.2 million, or 1.32 percent, above what was collected during the same period a year ago.
For the year, despite April, individual income tax collections are $25.1 million, or 2.2 percent, above what was collected during the same time period last year while sales tax collections, generally believed to be a leading economic indicator, were 2.5 percent, or $36 million, ahead of last year’s pace.
Collections of some other revenue sources, particularly taxes on casino gambling, were down 8.6 percent, or $10.8 million, and collections of corporate income taxes were down 2.3 percent or $9.3 million.
Money that comes in above the estimate will be available to be appropriated by the 2014 Legislature, although a portion of those funds was spent by the 2013 Legislature under the assumption that revenue collections were coming in much better than anticipated.