Mississippi’s budget-setting leaders rarely speak with great optimism about our state’s tax revenue collections, but Legislative Budget Committee action a week ago on the revenue estimate and an upward bend in collections and projections suggest confidence not seen in several years in the state Capitol.
Last week, the Legislative Budget Committee raised the official revenue estimate for 2014 – the current fiscal year – by $139.8 million, all of which will be available for the Legislature to appropriate in the 2014 session.
It is certain that many legislators, and those who seek to influence legislators, already have plans for that new money.
Additional funds for the Department of Corrections have been cited, but needs have been documented also in public education, which is vastly underfunded compared to the law’s requirements under the Mississippi Adequate Education Program. Medicaid, which provides health insurance for the most at-risk and marginalized Mississippians, including poor children, already has projected a $77 million shortfall, which the new revenue estimate could fully cover.
The optimism in the new revenue estimate is derived from several sources:
• Collections are 7.6 percent ahead of the same period in 2013, due in part to increasing corporate profits and modest but quantifiable growth in the state’s economy.
• Corporate tax collections, thanks in some measure to more efficient collection methods, surged 80 percent – $73.2 million – ahead of the same period in 2013.
Collections, as Daily Journal Capitol Correspondent Bobby Harrison reported, grew by 5 percent in each of the previous two budget years.
In the longer view, the modest growth in the Mississippi economy had been forecast.
The Joint Legislative Budget Committee’s revised estimate moves the revenue projection from under $5.1 billion to a little over $5.2 billion for fiscal 2014, which ends June 30.
Perhaps more significantly, the revenue estimate so far for 2015, which begins July 1, 2014, is $5.4 billion, suggestive of continuing economic expansion but at a modest pace.
It will be interesting to see if Mississippi can sustain its modest growth with measures still indicating slowing growth in the U.S. and most of the other Western democracies.