JACKSON – State revenue collections, which have been subpar in recent years, continue to make a modest rebound.
Revenue collections through the month of January for the current fiscal year are $52.1 million, or 1.8 percent, above collections during the same time period for the last fiscal year, according to a report compiled and recently released by the staff of the Legislative Budget Committee.
The state fiscal year runs July 1 through June 30.
In reality, collections for the current year are performing even better year over year when factoring in collections for the previous year included about $50 million in one-time revenue collections. When those one-time revenue sources are not included, collections for the current year are up 4.2 percent.
Collections through January are $23.1 million, or 0.78 percent, above the estimate. The estimate, compiled by legislative leaders, is important because it represents the amount of money budgeted by the Legislature. If collections fall too far below the estimate, Gov. Phil Bryant, often with assistance from the Legislature, is forced to make budget cuts or dip into reserve funds.
For the month of January, collections were $1.2 million, or 0.28 percent, above the estimate.
The estimate being met is a conservative one. The legislative leadership opted to adopt a conservative estimate after multiple years when the collections did not meet the estimate, forcing numerous rounds of budget cuts and in some instances the firing of state employees.
But if current trends continue, legislators might be able to revise upward that conservative estimate. There were some positive numbers in the January collections report. For instance, personal income tax collections were up $71.2 million, or 7.2 percent, for the year.
But sales tax collections, the largest single source of state revenue, continue to be relatively anemic, up $11.7 million, or 1.1 percent. But those numbers were more than offset by revenue from the use tax, which is levied on retail items purchased out of state. Use tax collections were up $24 million, or 18.8 percent.
After multiple tax cuts aimed at businesses, corporate tax collections continue to be sluggish, down $9.5 million, or 4.8 percent, year over year through January.
The revenue report comes as the Legislature is poised in the coming weeks to begin, in earnest, work on a budget for the upcoming fiscal year. If revenue collections remain strong, legislators might reassess and pump more funds into key programs, such as education, health care and law enforcement.
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