November tax collections extend downward slide

JACKSON – For the 15th consecutive month, state revenue collections have come in lower than projected.
State officials said Tuesday that November’s revenue collections, which include sales taxes, income taxes, corporate taxes and casino gambling taxes, were $24.8 million, or 6.9 percent, below the estimate.
For the fiscal year, which started July 1, tax collections are 7.4 percent, or $136.6 million, below the official estimate.
The official estimate represents the amount of money the Legislature and the governor used to fund state agencies for the current fiscal year. In September, Gov. Haley Barbour cut the state budget by $172 million because of sluggish tax collections.
It is now believed that tax collections will be about $350 million below the estimate for the entire fiscal year, meaning the Legislature and Barbour will have to deal with the shortfall in this year’s budget during the 2010 session, which begins in January.
The Legislature and governor also will be crafting a budget for the upcoming fiscal year during the 2010 session.
Tax collections are not only coming in lower than projected, but lower than the previous year, a rarity in Mississippi history. For the year, tax collections are $132.8 million, or 7.2 percent, below the amount collected during the same period last year.
It appears that this year will mark the second consecutive year tax collections are below the amount collected the previous year.
“November’s revenue report is further confirmation of what we have known for months – Mississippi’s state budget will not recover from this recession anytime soon,” Barbour said in a prepared statement. “With every passing month, tax collections have fallen lower, and further cuts in the current fiscal year are unavoidable.
“It also shows we must take real action in the coming legislative session to control spending tightly. This is not business as usual, and budget savings, instead of tax increases, are the answer.”
While economists say the nation has made a slow rise out of the recession, Mississippi, like most states, is still dealing with sluggish revenue collections.
Contact Bobby Harrison at (601) 353-3119 or bobby.harrison@djournal.com.

State revenue collections
July 1- Nov. 30, 2008, $1.85 billion
July 1-Nov. 30, 2009, $1.71 billion
Difference -$132.8 million, or -7.2 percent
Revenue collections include not on taxes on retail items and income, but also other items, such as earnings on investments.
Source: Department of Finance and Administration

Bobby Harrison/NEMS Daily Journal