Revenue collections, which fund most of the basics of operating state government, such as public education, health care and law enforcement, got off to a solid start in July – the first month of the 2019 fiscal year.
Collections were $9.7 million or 2.5 percent over the amount collected during July 2017. Or, the collections for July were $9.75 million or 3.2 percent above the official estimate. The official estimate represents the amount of money that was used during the 2018 legislative session to construct a budget for the current fiscal year.
If the revenue does not meet the official estimate over a period of time, the governor is forced to make budget cuts or call the Legislature into special session to make the cuts.
Multiple budget cuts, more than 10 percent for some agencies, were required during the 2016-17 fiscal years because of sluggish collections. Revenue collections began to rebound and grew some during the past fiscal year. Collections are continuing to grow – albeit slowly – during the new fiscal year.
Perhaps indicators of an improving state economy are that the sales tax and personal income tax collections, the two largest sources of state revenue, are both strong. Sales tax collections are up $6.5 million or 10 percent while income tax collections are up 12.1 percent or $13.85 million.
Corporate tax collections, which have been sluggish in recent years, continued that trend in July – down 24.7 percent or $3.5 million.
Many of the more than 50 tax cuts passed in recent years, which will take more than $700 million out of the state general fund when fully enacted, have been directed at businesses.
The tax on insurance premiums, which has grown by more than double digits in recent years, was down $10.35 million 25 percent in July.
The tax on casinos was up $558,466 or 4.8 percent. Officials are hoping to see a bump in casino taxes thanks to sports betting, which is just beginning in Mississippi thanks to a Supreme Court ruling earlier this year allowing states to enact betting on sporting events.
Mississippi is among states nationally to currently allowing sports betting and the only state in the Southeast.
The July numbers were compiled by the staff of the Legislative Budget Committee.