By Emily Wagster Pettus/The Associated Press
JACKSON — Mississippi’s economy is growing gradually but still lags behind the pace of the U.S. economy overall, an expert told state lawmakers Thursday.
State economist Darrin Webb said during a briefing at the Capitol that the state and nation have a “boring kind of economy” right now, with slow job growth and shaky consumer confidence.
“The U.S. economy is growing. It just doesn’t have a lot of momentum,” Webb said. “The state’s economy is growing, as well, but it’s growing much, much slower.”
Still, he and other experts expect 2013 to be an improvement over 2012.
Forecasting firm IHS Global Insight gives a 20 percent risk of return to recession this year. That’s down from a 30 percent chance it gave at the beginning of 2012, Webb said.
House Education Committee Chairman John Moore, R-Brandon, said he’s skeptical about the strength of the economy, based on concerns he’s hearing from people about the cost of health care and a change in federal payroll tax rates.
“I’m not hearing it and feeling it out there,” Moore said in response to Webb’s predictions of growth.
Mississippi was one of only four states showing a decline in nonfarm employment from 2011 to 2012, Webb said. The others were New Mexico, Wisconsin and Rhode Island.
Mississippi had about the same number of nonfarm jobs in 2012 as it did in 1995, Webb said. The number of manufacturing jobs started declining in the mid-1990s after the North American Free Trade Agreement was put in place and companies started shifting operations to other countries, he said. Because of the rapid development of casinos and other hospitality jobs in the 1990s, the state economy had a buffer until the Great Recession a few years ago.
Webb said 26 of Mississippi’s 82 counties lost jobs from 2011 to 2012. That’s an improvement from the 46 that lost jobs a year earlier.
State Treasurer Lynn Fitch told lawmakers that Mississippi has a solid double-A bond rating from all three ratings agencies, and she’d like to improve that two notches, to a triple-A rating. A stronger bond rating could mean the state receives lower interest rates for its long-term debt.
Mississippi’s total bond debt now is just over $4 billion, Fitch said. That’s a slight decline from its peak of just over $4.1 billion a year ago. State lawmakers didn’t approve any new bond debt during the 2012 session, and it’s unclear whether they’ll agree on a bond package this year. The state issues bonds as long-term financing for big projects such as construction of highways and state buildings.
Mississippi is now at about 32.6 percent of its constitutional debt limit — a level Fitch said is not cause for concern. Since 2000, the annual figure has varied from 27 percent to 36.1 percent. Under the state constitution, the debt must be no more than one and a half times the total revenue collections during any of the four previous budget years. The current constitutional debt limit is just under $12.5 billion.
Mississippi ranked 15th nationally in the amount of tax-supported debt per capita in 2011, the most recent year available. Fitch said on this list, it’s best to be ranked 50th. In 2011, Mississippi had $1,734 debt per capita. The U.S. median figure was $1,117.
House Appropriations Committee Chairman Herb Frierson, R-Poplarville, said lawmakers will keep the information from Fitch and Webb in mind as they continue working on a fiscal 2014 budget. They have an early April deadline to finish, and the fiscal year begins July 1.
The budgeting process will be easier if the economy continues to improve and revenue increases, he said. Several programs, including the Division of Medicaid, are requesting more money for the coming year.
“We’ve got tremendous needs out there,” Frierson said.
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