Tax collections generated from personal income and from corporations helped make May a strong month for Mississippi revenue collections, based on a report compiled this week by the staff of the Legislative Budget Committee.
But those numbers are partially offset by less than stellar collections for April.
April is normally a strong month for income tax collections (on both personal and on business income) because of the April 15 tax filing deadline. But, in some years, those filing are not counted toward state revenue until May. This past year, taxpayers had until April 17 to file, possibly further delaying reporting of the revenue by the Department of Revenue.
“It’s difficult to estimate every year how much we’ll get done in April and what will spill over to May, so always good to look at those months together,” said Kathy Waterbury, a spokeswoman for the Department of Revenue, in an e-mail.
For May, the state collected $18.6 million or 137 percent above the estimate in corporate income taxes and $16.6 million or 9 percent above the estimate on personal income taxes. Overall, revenue collections for May were $45.3 million or 10.3 percent above the estimate.
The official estimate, developed by legislative leaders, is important because it represents the amount of money appropriated for the fiscal year by the Legislature for education, public health, law enforcement and other vital state services. When revenue does not meet the estimate, the governor or governor in combination with the Legislature must make budget cuts or dip into reserve funds.
State leaders pointed to the strong May collections as evidence that their policies are working.
“The latest economic report shows Mississippi’s economy is growing with low employment, rising GDP (gross domestic product) and increased revenues to the state,” said Republican Lt. Gov. Tate Reeves on social media.
The strong May comes after anemic collections for April where collections were only $9.9 million or 1.3 percent above the estimate.
Year to date through May, collections are $42.9 million or 0.87 percent above the estimate.
And in reality, revenue collections have been sluggish in recent years – barely growing or even decreasing year over year.
Some blame the sluggish collections on the about 50 tax cuts passed in recent years that experts have said will cost the state coffers more than $300 million. Additional tax cuts are scheduled to be phased in over the coming years costing the state an additional $400 million.
But Reeves, Gov. Phil Bryant and other members of the Republican leadership of the state say the tax cuts will lead to economic growth.