Economist: State shouldn’t expect big boost from Isaac
Published: September 10,2012
JACKSON — State economist Darrin Webb says he does not expect Mississippi to see a surge in tax collections after Hurricane Isaac the way it did after Hurricane Katrina.
“My thinking is that while in theory there may be some slight uptick in revenues as a result of Isaac, it will be inconsequential,” Webb told the Northeast Mississippi Daily Journal.
Republican Lt. Gov. Tate Reeves, who was state treasurer when Katrina hit, agreed with Webb’s assessment.
“The final damage assessments caused by Hurricane Isaac will not be known for some time, but we should not anticipate a shopping spree like we saw after Hurricane Katrina,” Reeves said.
“Families throughout the state rebuilt houses and replaced belongings like appliances and cars, and those purchases translated into revenue for state and local governments through tax collections,” Reeves said. “Widespread purchases on that scale simply are not likely.”
Isaac moved ashore Aug. 28 and dumped large amounts of rain in south Mississippi, causing flooding in Hancock, Jackson and Pearl River counties. But it was a much smaller storm than Katrina, which struck on Aug. 29, 2005, and left a wide path of destruction across the coast and more than 200 miles inland. Officials say there will be much less federal money pumped into Mississippi for Isaac recovery than there was for Katrina.
Katrina hit less than two months after the state’s 2006 budget year started. Revenue collections that fiscal year grew 12.8 percent — the first double-digit increase since 1994, when casino gambling was getting started in the state. In 2007, Mississippi experienced another double-digit growth in revenue.
By 2008 as the national economic slowdown hit, state revenue collections were only growing 3.1 percent, followed by two years of negative growth.
After those two years where collections were less than the previous year, the state is again experiencing modest revenue growth. But Webb said not to expect too much from Isaac.
“You will recall that last year we saw arguably greater flooding and yet we did not really notice a revenue bounce,” Webb said, referring to the 2011 flooding of the Mississippi River. “If there is a bump this year, my guess is we will not be able to identify it in the data.”
— Northeast Mississippi Daily Journal
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