Ellington

JACKSON, Miss. (AP) — Employment in Mississippi decreased during the first months of the coronavirus pandemic in 2020, but personal income in the state increased during that time because of federal payments that were intended to head off a steep decline in the national economy, an expert said Monday.

“The Mississippi economy did suffer a shock ... from the pandemic in 2020, but that damage was considerably less compared to the economies of most states and the U.S. as a whole,” state economist Corey Miller said.

He spoke during a forum sponsored by Mississippi State University's Stennis Institute of Government and the Capitol press corps. At the beginning of his speech, Miller noted that more than 12,000 people in Mississippi have died of COVID-19.

“There’s no adequate way to measure the impact on our families and our society, that loss of life,” he said. “I don’t mean for my comments on the economy to diminish what is the real human toll of COVID-19 on our state and nation.”

Mississippi saw a 1.8% reduction in economic output in 2020. That compared to a 3.4% reduction for the U.S. as a whole.

Personal income in Mississippi increased 7.4% in 2020, compared to a 3.1% increase in 2019. Miller said that was the largest annual increase in Mississippi since 1994.

Mississippi had the 12th-highest percentage increase in personal income in 2020. Many other states received larger amounts of pandemic relief money, but the federal transfer payments had a larger impact in Mississippi "because we had relatively low levels of income in our state," Miller said.

“I think the transfers from the federal government probably lifted the Mississippi economy more than in most states,” he said.

Mississippi legislators rely on the state economist, the state treasurer and three other experts to predict how much tax money the state might collect each year. Those revenue estimates are the basis for writing annual state budgets.

The state has had robust tax collections the past several months. Many Republicans are pushing to cut taxes, but opponents say the state is already spending too little on education and other services.

Republicans control the state House and Senate. Each chamber has passed its own tax cut bill. It's unclear whether legislators will agree on one plan to send to Republican Gov. Tate Reeves.

Miller said state revenue is still expected to grow over the next several years if either of the bills become law, but either plan would reduce that growth by hundreds of millions of dollars.

Senate Bill 3164 would eliminate part of the income tax, while House Bill 531 would phase out the income tax over several years. Both bills would reduce the 7% sales tax on groceries. Mississippi has a 7% sales tax on most other items, including clothing. The Senate plan would not change that, but the House plan would increase it to 8.5%.