State must wait for BP to replace lost tax revenue

JACKSON – Legislators will have to wait until at least next year before appropriating money the state receives from BP for lost tax collections due to the oil spill.
“We will have to wait a cycle or two, maybe a year, to see the impact on revenue so we can get the real number,” Trudy Fisher, executive director of the state Department of Environmental Quality, told members of the Legislative Budget Committee on Wednesday.
The committee, which includes key House and Senate members, is working to prepare a budget recommendation for the full Legislature to consider in the 2011 session.
House Speaker Billy McCoy, D-Riezni, said committee members wanted to know how the oil spill, which began with the April explosion, would affect the upcoming budget.
Lt. Gov. Phil Bryant, a member of the committee, said it “is only fair” that BP reimburse the state for lost sales taxes, gambling taxes and other revenue caused by a lack of activity on the Gulf Coast this summer.
And, he said, he thinks BP will reimburse the state.
Fisher said the state must gather an abundance of information before filing a claim for lost tax revenue. Before filing the claim, the state also must factor in the revenue gains the state might have received because of the money BP already has spent in the state fighting the oil spill.
Fisher said BP already has paid out $30 million in claims to Mississippians.
“Those dollars are taxable,” she said.
Plus, BP has paid about $105 million to state agencies to reimburse them for their response to the oil spill. For instance, the Department of Mental Health has received $12 million to treat Coast residents who might have suffered mental illness as a result of the oil spill.
Rep. Diane Peranich, D-Pass Christian, told Mental Health officials she hopes they spend that money to treat problems on the Gulf Coast, where people have faced severe economic hardships and substantial stress because of the oil spill.

Contact Bobby Harrison at (601) 353-3119 or bobby.harrison@djournal.com.

Bobby Harrison/NEMS Daily Journal