Lagging economy, revenues ahead

By Bobby Harrison/NEMS Daily Journal

JACKSON – The only times during the past 13 years Mississippi’s growth rate exceeded that of the nation and of the Southeastern region occurred with the opening of the Nissan plant in Canton in 2003 and with the boom caused by the Hurricane Katrina recovery effort in 2005.
State Economist Darrin Webb told legislators Thursday the national economic recovery from the recession continues to be “anemic” and is even slower in Mississippi.
Webb said the issues facing Mississippi have “a lot do with human capital,” specifically the state’s lower educational attainment level, poor health of the population and the high teenage pregnancy rate.
Overall, Webb said, “We are not back to where we were before the recession in terms of spending … Consumers have become much more frugal.”
Webb and state Treasurer Lynn Fitch provided an economic outlook for the state to legislators Thursday morning.
Lt. Gov. Tate Reeves said the slow recovery will make the budgeting process for the upcoming fiscal year difficult.
“No area of the budget is immune from scrutiny, however we will have to find ways to support education and job creation efforts to ensure Mississippi heads in the right direction,” Reeves said after the briefing.
Webb said the state began losing manufacturing jobs in the mid-1990s, but that impact was softened because of the rapid ascension of the casino gambling industry in the state and a strong national economy.
He said the number of jobs in Mississippi peaked in May 2000 and predicted it would take until 2016 to return to the pre-recession 2008 jobs level in the state. He also said he does not anticipate state revenue collections to return to pre-recession levels until around the same time.
To complicate matters, Webb said 18.5 percent of the state’s income is derived from federal transfer payments. He said the current budget concerns in Washington could cause a decline in federal transfer funds, further slowing the state’s recovery.
Fitch presented information detailing that 8.3 percent of the state’s total general fund appropriation of $4.6 billion goes to pay the state’s debt on bonds. That percentage is the highest since 2006 when the state’s bond debt was 9.5 percent of the total appropriation.
On the flip side, the state is getting historically low interest rates on the bond debt, Fitch said.

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