Mississippi’s revenue buoyed by corporate tax collections

Stethoscope-on-MoneyBy Bobby Harrison

JACKSON, Mississippi – State revenue collections continue to be strong, outpacing by 7.6 percent what was collected during the same time period last year, thanks in large part to a surge in corporate tax collections.

Strong collections for the current year come on the heels of the previous two years where tax collections grew by more than 5 percent annually.

Through October, the state has collected $73.2 million or 80 percent more in corporate taxes than was collected during the same period a year ago.

State Economist Darrin Webb said recently during a meeting with legislative leaders and Gov. Phil Bryant that he attributed the strong corporate tax collections to strong corporate profits.

New technology has helped the Department of Revenue increase collection of back taxes. During the last fiscal year, which ended June 30, personal income tax revenue was up 10.8 percent, in part because of that back-tax collection effort.

For the current fiscal year, personal income tax revenue is actually down .9 percent or $5 million, in part because there are fewer back taxes to be found.

Still, the increase in corporate tax collections for the current year is helping offset the modest drop in income taxes.

Webb said the state economy “continues to expand and may be growing slightly faster than the nation. Through August, the state has gained an average of 18,700 jobs in 2013 over 2012. We expect job growth for 2013 to reach 1.7 percent.

“This would be the strongest growth since 1999. This says more about the slow growth since 1999 than it does about the speed of growth in the past year.”

Webb did point out he believes much of the growth is part-time and temporary construction jobs, such as the new power plant in Kemper County.

For October, revenue collections are $7.7 million or 1.7 percent above the estimate. For the year, collections are $54.5 million or 3.6 above the estimate.

The estimate by legislative leaders and the governor represents the amount of money to be appropriated by the Legislature. If revenue does not meet the estimate, state agencies could be forced to absorb budget cuts.

Last week, because of the recommendation of Webb and other state financial experts, legislative leaders raised the estimate for the current fiscal year $139.8 million. Those funds will be available for the 2014 Legislature to appropriate.

The legislative leaders and Gov. Phil Bryant are currently working independently on budget proposals to submit to the 2014 Legislature.

 

bobby.harrison@journalinc.com

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