Let’s make this simple — Mississippi’s economy is weak and shows few signs of growing stronger.
This is a state where total economic output in 2016 still was lower than in 2008, before the recession.
Not coincidentally, it’s a state where employers had fewer workers on their payrolls in September 2017 than in February 2008. And that 2008 peak came after jobs tumbled during a three-year recession in the early 2000s. Mississippi hasn’t seen truly strong growth since the 1990s, when the casino boom pushed the state’s growth rate ahead of the national economy in some years.
And after a decade when the Magnolia State economy — at best — has treaded water, it shouldn’t be surprising that people are bailing out. Census estimates show that nearly 10,000 more American-born people left the state than moved here from July 2015 to July 2016, offset a little by the roughly 2,000 people who moved to Mississippi from a foreign country.
If Mississippi had been an average Southern state, it would have added 10,000 people from other states. Combined with an above-average death rate, outmigration explains why the state has lost population for two years in a row.
Among those who are leaving? Young people with college degrees whom Mississippi taxpayers have helped pay to educate. Between 2000 and 2015, Census figures show that Mississippi had the highest outmigration rates in the South for people younger than 40 with a college degree, according to a New York Times analysis. Alabama was the only other Southern state where more young college-educated people left than moved in.
According to a report prepared last year for the College Board, only a little more than half of the graduates of Mississippi’s eight public universities are working in the state five years after graduation.
Credit here to state economist Darren Webb. He’s been delivering this message for years.
“Our recovery following the Great Recession has been one of the worst in the nation,” he told lawmakers last week, delivering what could have been the same talk he’s given in any of the last five years.
Webb did have some bad news specific to 2017. The bump in state tax collections that officials have bragged about in recent months? It appears illusory, the result mostly of one-time releases of money from agencies into state coffers. Estimators predict another year of flat state tax revenue in 2018-19.
State spending this year, about $6 billion, is roughly $800 million behind where it would have been if spending had kept pace with inflation since 2010. That would be enough money to cover Mississippi’s road and bridge needs, increase state K-12 spending to levels called for by the state school funding formula, and have money left over.
Some of that shortfall stems from hundreds of millions in tax cuts, what Webb called “lost revenue due to legislative changes.”
The thinking when those taxes were cut seemed to be that state revenue would still grow, just at a slower pace. At least one legislative leader appears to be moving the goalposts, with Lt. Gov. Tate Reeves hailing stagnant revenue as a triumph.
“For us to have enacted the largest tax cut in Mississippi history and still expect that we’re actually going to collect flat revenue year-over-year, I think says an awful lot about the direction that we’re trying to send our government in being fiscally responsible and fiscally prudent,” the Republican Reeves said last week.
But while elected officials may have a definite direction for Mississippi government, any plan is going to be harder to execute with an economy that’s going nowhere.
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