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State revenues down 10 percent in September

State Economist Dr. Phil Pepper told the Joint Legislative Budget Committee a week ago today that the long-term revenue outlook for the state was not very good.

The short-term forecast looks positively dreadful.

September tax collection numbers surfaced today, and they aren’t pretty. Overall, the state brought in $404.9 million last month, 10 percent under revenue estimates officials made only three months ago. The total shortfall for the month was just short of $45 million.

August offered a sliver of hope that the trend of monthly revenue shortages could be coming to an end. Gov. Haley Barbour said then the Cash for Clunkers program probably had a lot to do with August revenue falling only about 2 percent short of estimates.

September’s sales tax figures were $13.6 million, or almost 9 percent, under estimates, bolstering Barbour’s argument that Cash for Clunkers artificially inflated August sales tax collections. Individual income tax collections in September were almost 14 percent, or $22.7 million, short of what the Revenue Estimating Group, of which Pepper is a member, thought they would be.

Barbour has already made cuts to the fiscal year 2010 budget, slashing $172 million from K-12 education spending on Sept. 3. Barbour, who is in the middle of a two and a half week economic development trip to Asia, has said since then that more cuts are almost a guarantee. For the first quarter of FY10, revenue is already $77 million (more than 7.5 percent) shy of expectations. Judging from September’s revenue, trimming the budget will be at the top of Barbour’s to-do list when he returns home.

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