Tuesday, November 15, 2016
JACKSON, Miss. (AP) — Mississippi's top elected officials say the outlook for state tax collections is improving, despite a dip during the first months of the current budget year.
Budget writers met Monday and increased the revenue estimates for the remainder of fiscal 2017, which ends June 30, and for fiscal 2018, which starts July 1. The more optimistic numbers mean that fresh budget cuts are unlikely in the near future.
A revenue estimate is an educated guess of how much money the state might collect. The number is important because it is the basis for setting state spending levels.
Republican Gov. Phil Bryant and the Joint Legislative Budget Committee made the changes based on recommendations from state economist Darrin Webb and other experts.
"Mississippi has struggled to gain momentum throughout recovery following the Great Recession," Webb said in written remarks. "We have not seen two consecutive years of expansion since 2008; however, we expect that will change this year."
Webb said he expects Mississippi's economy to have relatively mild growth of about 1.7 percent in the current budget year, improving to 2 percent for the coming year. He said both rates are below projections for the national economy.
The dip in state tax collections at the start of the current fiscal year was caused by "noneconomic issues," Webb said. For example, he said individual income tax collections were down partly because of "unusually high" rebates in an incentive program for movie production.
"While revenues are below expectations to date, this is not necessarily because of declines in economic activity," Webb said. "In addition, other things being equal, the remaining quarters of the fiscal year will show improvement relative to the first quarter."
Even with the revisions, state tax collections for the current year are still expected to remain $15.5 million below collections for last fiscal year. That is a decrease of three-tenths of 1 percent.
The revised projection for next year represents an increase of $104.9 million over this year. That is a 1.8 percent jump.
Despite the increase, Republican Lt. Gov. Tate Reeves said: "I believe agencies should expect to continue tightening their belts as we prepare for a fiscal 2018 with little, if any, growth in spending."
In early September, Bryant cut $56.8 million from the $5.8 billion state budget to make up for an accounting error that had been announced months earlier.
Funding for most programs was cut just over 1.6 percent. Some items were exempt from reductions, including the Mississippi Adequate Education Program, a school funding formula that is one of the biggest items in the budget. Also exempt from cuts were veterans and military affairs and student financial aid, which are smaller-ticket items.