“Cautious” is a word that state economist Darrin Webb uses to describe what sales tax collection figures say about Mississippians’ attitudes. But that’s cautious about spending, as opposed to shutting down on the spending front, as was the case in the depths of the recent recession.
Consumer spending is both the principal driver of economic growth and an indicator of the economy’s health. Nothing is a better measure of consumer confidence than sales tax collections. In fiscal 2013, which ended June 30, Mississippi sales tax collections of $1.9 billion were 3 percent ahead of the previous year’s – not a huge bump, but definitely a trend in the right direction.
Overall, the state collected a record $5.1 billion in FY 2013, a 5.1 percent increase over the FY 2012 total. It was the third year of revenue increases after two historic downturn years, 2009 and 2010.
Still, Mississippi has a long way to go. Our rates of increase are well below the national average in sales and income taxes, and our unemployment rate of 9.1 percent is second highest in the nation and exceeds the nation’s 7.6 percent. And Webb – indicating some caution of his own – points out that looming federal budget cuts will have a disproportionate effect on Mississippi’s economy since our state is more heavily reliant on federal dollars than most.
But with all the continuing reasons for concern, Mississippi’s economic outlook is improving. A Daily Journal report last week showing that restaurant hiring in the state is on the upswing was another sign that Mississippians have more money to spend and are less hesitant to spend it. We have begun to turn the corner.
Once around that corner, however, Mississippians have a longer way to go to catch up with the rest of the nation economically. That makes it all the more imperative that as revenue improves, policymakers are strategic in how they use it.
The foundation of economic development is education, and every level of education in Mississippi – K-12, community colleges and universities – has felt the pain of the recession and its lingering aftermath. While education is the figurate jobs infrastructure, roads, bridges and highways are the literal infrastructure for economic growth, and they’re in dire need of a plan for both short- and long-term repairs and maintenance.
As the economy and revenues improve, Mississippi must shore up the critical areas that make sustained economic growth possible.