By Bobby Harrison
Daily Journal Jackson Bureau
JACKSON – Mississippi revenue collections were $19.6 million above the revenue estimate for September and $64.3 million above for the first quarter of the fiscal year.
The revenue estimate is important because it represents the amount of money the Legislature appropriated during the session earlier this year to fund state government for the fiscal year starting July 1. If revenue came in significantly below the estimate, the governor or the Legislature – or both – would be forced to cut budgets.
The strength of the state’s tax collections also is viewed as an economic indicator.
Revenue collections for September were 4.1 percent above the estimate and a whopping 15.1 percent above the amount collected the prior September. For the first quarter of the state’s fiscal year – July through August – collections are 5.9 percent above the estimate and $124.3 million, or 12.1 percent, above what was collected during the same period a year ago.
Still, all is not rosy.
During September, individual income tax collections are $27.7 million, or 14.4 percent, below the estimate. For the first quarter, individual income tax collections are $41.9 million, or 9.9 percent, below the estimate.
But corporate tax collections more than offset the less-than-anticipated individual income tax collections. For the month of September, corporate tax collections are $32.3 million, or 52 percent, above the estimate and $49.4 million, or 53.5 percent, above the estimate for the first quarter.
State economist Darrin Webb said of the strong showing for corporate tax collections, “It appears estimated payments are up, suggesting corporations feel they are having a good year.”
Businesses make payments based on their anticipated revenue.
Plus, Webb said, “There have also been more intense efforts to collect unpaid taxes and these visible efforts may be promoting increased compliance.”
On the other hand, of the drop in individual income tax collections, he said, “I think income growth has softened this year relative to last. While we are seeing employment rising, I suspect much of the growth has been in part-time jobs and low-pay jobs.”
The state’s financial experts, including Webb, make recommendations to legislative leaders on what the official estimate should be. Based on the estimate they provided, Webb and the other experts were expecting stronger growth in income tax collections during the first quarter.
Despite individual tax collections being significantly below the estimate, they still are $32.3 million, or 9.3 percent, over the same three-month period in 2012. For the month of September, individual income tax collections are up $37.6 million over the prior year.
Sales tax collections – 7 percent on most retail items – are viewed by many economists as a better economic indicator. For September, sales tax collections were $1.4 million, or less than 1 percent, above the estimate. For the first quarter, sales tax collections were $12.2 million, or 3.3 percent, above the estimate.
Collections were buoyed by the tax on insurance premiums being $19.6 million, or 3,432 percent, above the estimate. But an analysis of revenue collections by the staff of the Legislative Budget Committee surmised much of the increase was attributed to “the one-time collection of outstanding premium payments.”
Plus, the Budget Committee staff pointed out state revenue collections included $17.6 million from the settlement of lawsuits by Attorney General Jim Hood.
Casino tax revenue continues to be anemic – $1.3 million, or 12.2 percent, below the estimate for September. For the first quarter of the fiscal year, casino tax collections are up $440,696, or 1.3 percent, above the same period a year ago.