Mississippi tax collections continue to soar

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Mississippi tax revenue collec­tions through October, the first four months of the fiscal year, are about $160 million above the amount collected during the same period last year, according to the most recently released revenue report.

Through October, the state has collected $2.2 billion, which is 7.75 percent above the amount collected from various taxes dur­ing the same period in 2020.

The October revenue report re­leased by the Legislative Budget Committee staff continues a trend of soaring revenue collec­tions that began in the summer of 2020 as federal COVID-19 re­lief funds poured into the state. For the month of October, the state collected $584 million in revenue — up $47.3 million from the amount collected in October 2020.

The soaring revenue collections come as legislative leaders and Gov. Tate Reeves work to finalize budget proposals for considera­tion when the Legislature meets in full session in January to begin the task of developing a budget to fund state programs, such as education, health care and law enforcement, for the new fiscal year beginning July 1.

The 14 members of the Legisla­tive Budget Committee, includ­ing Lt. Gov. Delbert Hosemann and Speaker Philip Gunn, are slated to meet Wednesday to agree on a revenue estimate with Reeves for the coming fiscal year.

That estimate will signify the early projection of revenue ex­pected to be collected during the upcoming fiscal year to fund the state budget.

In developing that budget, the committee and the governor are likely to consider multiple factors, including:

— The state’s economic out­look, which impacts revenue col­lections.

— The current revenue collec­tions.

— The fact that the state col­lected $924.5 million or 15.9 per­cent more in revenue during the past fiscal year, which ended June 30, than it did in the previ­

ous year, meaning the state treas­ury is flush with funds.]

According to the October rev­enue report, just about all cate­gories of state revenue collections are up for the year. The largest single source of revenue, the sales tax on retail items, is up $165.4 million or 26 percent, while the use tax, imposed on internet and other out-of-state sales, increased $10.3 million or 7.7 percent. The second largest source of revenue — the tax on personal income — increased only $6.6 million or less than 1 percent, while the corpo­rate income tax decreased $32.8 million or 17.2 percent.

Another category that saw a de­cline in revenue collections is the tax on cigarettes, alcohol and beer, which dropped $5.1 million or 5.3 percent.

The decline is not surprising since liquor sales soared last year early in the pandemic as the gov­ernor shut down much of the state. Most other sources of rev­enue increased.

After the revenue estimate is adopted Wednesday, the gover­nor is slated to release his budget proposal before Nov. 15, accord­ing to state law. It is possible that the governor will include in his proposal recommendations on how the state should spend $1.8 billion in federal American Rescue Plan funds that are supposed to be used to combat COVID-19, but in reality the state has consid­erable discretion on how the funds are spent.

The budget committee is slated to release it proposal in early De­cember.

Both the governor and legisla­tive leaders have indicated their hopes of providing a teacher pay raise during the upcoming ses­sion. In addition, the governor has proposed phasing out the state’s income tax, which accounts for about one-third of revenue collec­tions. Gunn has proposed phasing out the income tax, but also rais­ing other taxes, such as the tax on retail items, to offset the loss rev­enue.





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