State revenue collections, after multiple months of strong growth, took a nosedive in March.
For the month, revenue collections were $46.7 million, or 10.4 percent below the estimate. For the fiscal year, which ends June 30, collections are $12.3 million or 0.33 percent below official projections, according to the report compiled recently by the staff of the Legislative Budget Committee.
The official estimate is important because it represents the amount of money appropriated by the Legislature during the 2017 session for the current fiscal year. If collections fall too far below the estimate, either cuts would have to be made or Gov. Phil Bryant would have to dip into reserve funds.
At this point, neither scenario seems likely, thanks to the fact legislators created a cushion of about $56 million during the 2017 session, by only appropriating 99 percent of projected revenue. But more sluggish months of revenue collections during the final quarter of the fiscal year could force the governor to take action, such as dipping into reserves. It most likely would be too late in the fiscal year to require agencies to make cuts.
The state’s Working Cash Stabilization Fund contains $310 million.
Revenue collections for most of the current fiscal year have been relatively strong, or at least stable, after two years of sluggish collections.
Sometimes, a glitch, such as big taxpayers or multiple taxpayers remitting payments to the state late, can result in months where revenue collections are artificially low or high. But Kathy Waterbury, a spokeswoman for the Department of Revenue, said she was not aware of such a glitch occurring in March. But officials often have pointed out that collections for one month can be misleading and that it takes multiple months to establish trend.
But with the sluggish collections for March, revenue collections through the first nine months of the fiscal year are now $73 million or 1.9 percent below the amount collected during the same time period last year. The state has collected less revenue than the previous year the past two years. It is rare in the history of the state, though, for revenue not to grow year over year.
The annual collections are a bit misleading this year, though, because boosting collections for the prior year were one-time sources of revenue, such as funds from the settlement of lawsuits by Attorney General Jim Hood and transfers from the rainy day fund.
When comparing solely recurring tax revenue, such as the sales tax, income tax, corporate tax and others, revenue for the current year is slightly above the amount collected during the same time period last year at $10.5 million or 0.30 percent.
— By Bobby Harrison / Daily Journal
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info