The Mississippi economy, based on its gross domestic product, is projected to grow during the current fiscal year at its fastest pace since 1994, State Economist Corey Miller told legislative leaders Friday.
“Mississippi’s economy, like the national economy, continues to recover from the relatively brief but steep recession experienced in 2020,” Miller said, referring to the coronavirus-related recession that occurred last spring.
Miller said the infusion of federal funds, including direct payments to most adults and tax credits for children, and “the pent up demand” for retail items are helping to spur that growth.
Miller’s comments came during a meeting of the Joint Legislative Budget Committee. Members of the committee are working to develop a budget recommendation for the upcoming fiscal year that begins July 1. The full Legislature will convene in January to begin the task of approving that budget.
The GDP, or total value of goods and services, is projected to grow 5.5% for the 2021 calendar year, which Miller said would be the best rate of growth since the 1990s when the casino industry first took off in the state creating an economic boon. The national GDP is projected to grow by 5.7% — the best since 1984.
Miller said the state’s GDP growth is expected to slow in 2022 to about 1%, which has been the normal rate of growth for the state. The national economy is expected to experience more robust growth during the upcoming calendar year.
In some ways, though the state is currently growing at a stronger rate than the nation, Miller said.
“As of August, Mississippi has recovered 79.7% of the jobs lost in March and April of 2020, a higher percentage than the U.S. economy,” he said. “Mississippi did not lose as many jobs as a share of total employment last year as the U.S. did, contributing to the recovery, and the state’s economy fully reopened sooner that the nation as a whole.”
The state has added 6,600 jobs through August of this year, the best rate of growth since 1998. The 6,600 jobs added included the state losing 4,100 jobs during August as the COVID-19 pandemic surged in the state.
Overall, the surge in COVID-19 cases this summer has slowed both the Mississippi and national economies, though strong growth is still occurring.
Lt. Gov. Delbert Hosemann expressed concern about the rising inflation rates and said that should be factored in as legislators work to craft a budget.
Miller said the projection is for an inflation rate of 4.2% for the year, which would be the largest increase since 1980. The inflation rate is expected to slow to 2.2% the following year.
The higher inflation rate comes as the nation and the state experience significant growth in wages. State wages are expected to grow by about 8% for the year.
Those higher wages, while good for Mississippi workers, are causing problems for state agencies that are having a difficult time maintaining employees.
Hosemann asked Department of Revenue Commissioner Chris Graham whether he was able to hire the additional auditors funded by the Legislature in the 2021 session. Graham said he was able to fill eight of the 10 slots, but other auditors already employment by the Department of Revenue resigned, meaning there are less auditors now than before he started the hiring process.
Graham said he is having trouble filling other positions, including in the Alcohol Beverage Control warehouse that provides state retailers liquor and wine. He said there is generally a two week delay from when a retailer submits an order before it is delivered.
“Our applications (for employment) have dried up,” Graham told legislators.
Other agency heads expressed similar concerns.
“We are no longer in a position to adequately compete with the private sector,” said Department of Transportation Executive Director Brad White.
Kelly Hardwick, executive director of the state Personnel Board, told legislators that a new system will be put in place to classify state workers and their salaries. He said that will make it easier to compare the salary and benefits of state employees to those in the private sector and surrounding states.
He said the average annual salary of Mississippi state employees is $41,260, which is about $9,000 below that of state employees in surrounding states. That comparison does not factor in benefits. When the new system is put in place, benefits such as health care and pension also can be compared.