The Budget Committee reports show modest growth in revenue after two consecutive years where the Legislature and Gov. Phil Bryant had to make budget cuts – in excess of 10 percent for most state agencies – to deal with sluggish collections.
While revenue collections show growth for the first quarter, collections for the month of September were not as strong. In September, the state collected $491.3 million in revenue or $23 million less than was collected in September 2016.
For the month of September, collections are $7.8 million or 1.6 percent below the estimate. For the first quarter, collection are $20.2 million or 1.7 percent above the estimate.
The estimate is important because it represents the amount of money budgeted during the 2017 legislative session to fund state government, including the local school districts. If revenue collections do not meet the estimate, either Gov. Phil Bryant or the Legislature in coordination with the governor will be required to make mid-year budget cuts or dip into reserve funds.
Through the first three months, individual income tax collections are strong – up $29.7 million or 7 percent over the previous year while sales tax collections are up $7.1 million or 1.7 percent. The sales tax and personal income tax collections make up about 70 percent of the state’s total revenue.
Those revenue streams were offset to an extent by a significant drop in corporate tax collections of $27.4 million or 22.3 percent for the first three months of the fiscal year.
Use tax collections are up $8 million or 16.1 percent. Use tax collections have been improving as the Department of Revenue has reached agreement with various online companies to collect for the state the 7 percent tax on the sale of retail items to Mississippians.
The tax collected on insurance premiums also continues to be an improving source of revenue for the state – up $13.9 million or 50.6 percent for the first three months of the fiscal year.