State’s July revenue off to good start

JACKSON – Compared to the same time period one year ago, Mississippi’s revenue collections for July look good.
Mississippi’s tax collections for July were 2.4 percent, or $5.4 million, above the estimate, according to a financial report released Monday by the state Department of Finance and Administration.
The estimate is important because it represents the amount of money used during the 2010 session by legislators and Gov. Haley Barbour to build a budget to fund government, including education, public safety and health care.
Last year, the July collections were $26.2 million, or 11.3 percent, below the estimate.
And even though it was the first month of the new fiscal year, Barbour already was making plans this time last year to cut the budget because tax collections were not meeting the estimate.
Barbour ended up cutting $466 million, or more than 9 percent, out of the budget for the fiscal year that ended June 30 in response to lower-than-expected tax collections.
For that fiscal year, the state collected $405.4 million, or 8.25 percent, less than the estimate.
July was the first month of a new fiscal year and a new revenue estimate made by legislative leaders.
Even though the state met its revenue estimate, Barbour did not sound optimistic.
“Reviewing the revenue in more detail shows our sales taxes and personal income taxes are off,” the governor said in a statement. “Corporate income taxes showed an unusual spike.
“Corporate income is the most volatile tax category, so it’s important not to read too much into that. We continue to face a tight budget situation throughout this fiscal year and as we plan the 2012 budget.”
Corporate taxes for July were $8.4 million, or 120.4 percent, above the amount state leaders estimated would be collected. Casino gambling taxes also were above the estimate – 5 percent, or nearly $600,000.
But the sales tax, viewed as a leading economic indicator, was 8.3 percent, or $5.3 million, below the estimate. The state collected 1.2 percent or $1 million less than projected in income taxes during the month of July.
Still, July reversed another disturbing trend. Before July, the state collected less in taxes than it did during the same period one year ago in 21 of the previous 22 months.
But in July, the state collected $24.5 million, or 11.9 percent, more than it did during the same month in 2009.
It’s still not clear whether the state is rebounding from an unprecedented drop in revenue that has resulted in three straight years of collecting less than the previous year.
But July represents at least a start to the reversal of that trend, which has played havoc with the state budget.

Contact Bobby Harrison at (601) 353-3119 or

Bobby Harrison / NEMS Daily Journal Jackson Bureau

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