OUR OPINION: Mississippi’s economy still in caution zone

By NEMS Daily Journal

Mississippi’s 2014 revenue estimate, approved Monday by the Joint Legislative Budget Committee and Gov. Phil Bryant begins the long process of agreeing on state spending priorities for the budget cycle beginning July 1, 2013, and almost certainly some adjusted spending for the current budget because of a revised, higher revenue estimate.
The 14-member committee, by law, sets the revenue estimate every year before the next legislative session convenes, and the governor must concur.
In most years that’s about as far as agreement extends because what the governor proposes (he will release his executive budget Wednesday) will be followed by what the Legislature proposes, followed by the debates in the session.
The $5.02 billion estimate for 2014 is 1.6 percent higher than 2013 revenues, which is mildly encouraging, but in almost the same breath the state’s chief economist, Darrin Webb, says we’re still in a mild recession that started earlier in 2012, but we could pull out of it this quarter.
The official economic forecast from Webb and the other experts operating under the umbrella of the public universities has been consistently very cautious since late 2007.
The official economic forecast for the fourth quarter released this month explains Mississippi’s situation in more detail:
• The growth rates of output and employment in Mississippi have been lower than the U.S. rates this year. The annual growth rate of real output in 2012 is expected to be under 1 percent, but will gradually accelerate in the coming years, reaching a peak of 2.7 percent in 2015.
• Employment in the state has fallen every year since 2007, and no growth is expected in 2012.
• The heavy reliance on lower-skill workers is more vulnerable to cuts, due both to competition from imports and to changing consumer preferences, which are shifting toward technology-related services. Professional and business employment has expanded at rates of over 3 percent nationally since 2010. Mississippi growth here has turned negative, with the demand for professional, scientific and technical services hit especially hard.
The health care, transportation/utilities and government sectors are the only ones with positive growth since 2008.
Along with making a budget, basic re-examination of our developmental liabilities is in order.