By Bobby Harrison/NEMS Daily Journal
JACKSON – State coffers took another hit with May’s tax collections being the worst in a year.
State revenue collections for May were $51 million, or 12.6 percent, below the estimate, the largest percentage since May 2009 when tax collections fell 14.5 percent short.
The estimate is important because it’s what the Legislature budgets. Despite the poor showing in May, Gov. Haley Barbour said the state should have enough money to finish the current fiscal year June 30 without a deficit.
Barbour already has made $466 million in cuts to general fund agencies to offset the downturn in revenue. Through May, the state is $346.4 million or 8.2 percent below the estimate for the year. In other words, the state could sustain in June another month like May and still have a surplus.
“It’s clear that we will have to continue to scrutinize our expenditures closely, as the deep global recession continues to affect our state’s revenue,” the governor said Tuesday afternoon in a prepared statement. “However, the adjustments made already appear to be sufficient to stave off any need for additional budget cuts at this time.”
State law mandates that the first $45 million of any surplus go into a beginning cash balance for the next fiscal year. Any additional surplus would be split evenly between the rainy day fund and a fund to be used for repairs of state buildings.
The drop in revenue collections is historic.
May represented the 20th time in the past 21 months where tax collections were below the estimate. For most of those months, the state also has collected less in revenue than it did the previous year.
The state also is poised to collect less in revenue than the previous year for three consecutive years.
That has not occurred in recent memory. In the early 2000s, the state collected less in revenue than the previous year only once.
State revenue is generated primarily through a sale tax, income tax, corporate tax, casino tax and various other taxes and fees.
Contact Bobby Harrison at (601) 353-3119 or firstname.lastname@example.org.