That spring dip in both the national and Mississippi economy lingered in the Magnolia State through the summer, causing Mississippians to slow their retail spending.
September spending showed a slight rise but still fell short of estimates.
The state Department of Revenue reports sales tax revenues for July and August dropped below the same months of the previous year and that September collections fell $5.6 million short of projections.
Sales tax receipts ended the fiscal year June 30 on a slightly positive note, coming in at $1.79 billion, a figure $3.76 million over projections.
Individual income tax also exceeded projections, though only slightly, ending the fiscal year at $1.38 billion compared to a $1.35 billion estimate.
The levels of revenue collection point up the tightrope state budget makers must walk. When the state’s Revenue Estimating Committee meets next month to set estimates on state collections of taxes and fees, its members will be confronted by sales tax numbers that indicate a slide, said Dr. Marianne Hill, senior economist for the State Institutions of Higher Learning.
On the brighter side, the committee made up of a representative from the state budget office, the state economist and the commissioner of the Department of Revenue should be able to count on continued growth in personal income (currently up 3.2 percent) and increases in corporate income taxes (currently up 11 percent).
Overall state revenues have climbed 2.9 percent in recent months, Hill said at an Oct. 4 economic conference organized by her agency.
The increase aside, the truth is state revenues are essentially flat, she said.
“The Department of Revenue is not flush, shall we say.”
Collections across the board “are not that much above year ago numbers,” she said.
While the state ended its fiscal year with overall revenue growth of 3 percent, the key money generator – the sales tax – grew by only a half percent, Hill reported.
“That is very worrying.”
Also missing is the boost that came from the federal Economic Recovery Act of a couple years ago. “The stimulus funds are gone which is hurting the state budget, and we are not able to deal with some long-term challenges that are facing the state,” Hill said.
Spring showed promise, based on the Index of Leading Indicators heralding an upturn in Mississippi’s economy, Hill said. But since spring the indicators have trended downward and by July they hit negative territory, she added.
The “strong upswing” Mississippi saw over the previous summer compounds the disappointment of that return to the negative, she said.
“It looked like we were starting to come out of the downturn but it has been flat and we expect it to stay flat for some time.”
At the moment, manufacturing in Mississippi is lagging the rest of the country, building permits show no upward motion and “negative numbers” are dominating median housing prices, she added. Banks are showing some improvement in return-on-assets but still are below 1 percent, Hill said.
Hill did note some positive developments: The new Toyota plant, a natural gas pipeline. the success of the Mississippi Clean Energy Initiative, the Port of Gulfport’s expansion and the growth of solar panel companies.
The state’s successes should allow its projected economic output of 1.1 percent to surpass a national output projected at .7 percent, according to Hill.
But that won’t keep employment growth from below the national level, said Hill, who said her agency projects job growth of only 1.5 percent. “If you look back to 2000 you can see a gap” in job growth compared to the rest of the nation.
“Our employment growth has not been growing as quickly and it will take us longer to get back to 2000 employment levels, Hill noted, and put the state’s arrival at sometime around 2016.