In reality, state revenue fell short of estimate

By Bobby Harrison/NEMS Daily Journal

JACKSON – As it turns out, the state did not meet its revenue estimate for the month of November, but barely missed it.
Final numbers show that collections fell short by $228,041, or .07 percent. Earlier, based on incomplete numbers, state officials announced that collections came in slightly above the estimate – .19 percent, or $609,736.
The estimate represents the amount of money the Legislature budgets to fund various aspects of state government, ranging from education to Medicaid to mental health care.
Even though the state missed the estimate, Gov. Haley Barbour will not be forced to make budget cuts.
During the past two years, during an unprecedented drop in state tax collections, Barbour made mid-year cuts because the state was not meeting the estimate.
The state fell short of the November estimate because of the “other than Department of Revenue Collections” category.
The Department of Revenue collects the bulk of the revenue to fund the state general fund. The money comes through various taxes, such as the sales tax, income tax and casino gambling tax.
During November, the Department of Revenue collected $320.9 million in those taxes, or $609,736 more than the estimate. That was the number reported earlier in the week.
But in the “other than” category, the state was $837,777 below the estimate. That shortfall of $837,777 put the overall revenue collections $228,041 below the estimate.
The “other than” category includes the earnings on state investments, revenue from the Department of Insurance on a tax on premiums and from licensing agents, and assessments on court fines.
The earnings on investments was $142,558 below the estimate. But the real shortfall came because the revenue from the Department of Insurance was below estimate by $1.1 million, or 52 percent.
A spokesman for the agency speculated that the shortfall might have been because the Legislature changed the law to allow agents to renew their license every two years instead of every year.
The state will receive the same amount of money from the renewals, but the revenue will come in during a different time frame.
Still, through the first five months of the current fiscal year, collections are $21.3 million, or 1.27 percent, above the estimate and $34.9 million, or 2.09 percent, above what was collected last year during the same time frame.
The increase is modest, state officials admit, but it is a welcome sign after two years where the state suffered through negative revenue growth.
Sales tax collections, viewed as perhaps the leading economic indicator of all the taxes, are 1.08 percent, or $6.9 million, above the estimate for the first five months of the fiscal year.
For November, sales tax collections are $2.6 million, or 1.82 percent, above the estimate. The sales tax collections recorded in November, though, were actually on retail sales made in October.
Contact Bobby Harrison at (601) 353-3119 or bobby.harrison@djournal.com.