State finally makes revenue estimate

By Bobby Harrison/NEMS Daily Journal

JACKSON – Finally, the state has good news about tax collections.
The state has made its official revenue estimate for March with one day left in the month. It marks the first time in 18 months the state has made the revenue estimate and the first time in 15 months the state has collected more in taxes than it did the past year for the same month.
Through mid-day Tuesday, the state had collected $446.8 million, which is $1.2 million or .27 percent above the estimate.
“I will say one swallow does not make spring and it is not an indication that all is well, but it clearly shows the last round of budget cuts made by the governor was premature,” said Sen. Hob Bryan, D-Amory.
Bryan said the recent decision of Gov. Haley Barbour to cut $14 million out of the reimbursement rates for health care providers who see Medicaid recipients should be reconsidered.
Dan Turner, a spokesman for Barbour, said the governor would not backtrack on that decision based on one month of tax collections. But he added it is good news the state had surpassed the estimate.
The estimate is important because it represents the amount of money the Legislature and the governor used in 2009 to build the budget for the current fiscal year. The fiscal year ends June 30. The Legislature is slated to resume the 2010 session April 20 where it will work on enacting a budget for the next fiscal year.
The Legislature recessed the 2010 session this past week in part to see if revenue collections improved before beginning work on the budget. But on Tuesday, Senate Appropriations Chairman Alan Nunnelee, R-Tupelo, said, while the improved revenue collections for the month of March are encouraging, he does not think the Legislature should re-calculate the amount of money it intends to spend in the upcoming budget.
“I think the March collections is a great sign,” Nunnelee said. “I am cautiously optimistic. But at the same time, one month does not make a trend.”
Because of the slumping revenue collections, the governor has made four rounds of budget cuts, not including the $14 million Medicaid deficit, totaling $499.1 million. Most agencies, including education, have been cut 9.5 percent for the current year.
The cuts have resulted in some layoffs – particularly at the universities – and more layoffs and possibly furloughs are anticipated during the next fiscal year.
March’s collections come on the heels of particularly bad collections for February. Last month tax collections were 12.58 percent or $34.3 million below the estimate.
State Economist Phil Pepper had said earlier this month he and other experts believed the state tax collections were gradually improving before February’s dismal collections. Bryan said March’s collections might indicate February’s poor showing was an exception to what had been a slow monthly improvement in tax collections.
“What we need to do is calm down, and wait and see how much information we can get before building a budget,” Bryan said.