Mississippi revenue collections through April are on near-record pace for the largest percentage year over year increase in the modern era.
Through 10 months of the fiscal year, the state has collected $5.35 billion in general fund revenue — a $756.9 million or 16.5% increase over the amount collected during the same time period last year, according to the April revenue report recently released by the Legislative Budget Committee staff.
Factors surrounding the ongoing COVID-19 pandemic could be playing a strong role in the revenue collections. Those factors include:
- Unprecedented federal assistance to individuals and to Mississippi governmental entities. For instance, during the current fiscal year, most Mississippians have received at least $3,200 in federal stimulus checks that economists say have helped fuel the state economy.
- Last year the filing deadline for state income taxes was postponed from April 15 to July 15, meaning that about $230 million in income taxes that would have been collected in the prior fiscal year were pushed into the current fiscal year.
- Revenue collections in the past fiscal year were down as a result of the onset of the pandemic and other circumstances, such as the postponement of the income tax filing deadline. The 2.5 drop in revenue collections during the last fiscal year helps inflate percentage increases in the current fiscal year.
Still, if the 16.5% increase holds for the next two months, that means it would be the strongest year-over-year increase since 1981, which also saw a 16.5% increase.
It is not clear what fueled the large increase in fiscal year 1981. Revenue collections could be impacted by multiple factors, including the economy, rebuilding in the aftermath of a natural disaster like Hurricane Katrina, tax cuts or tax increases or even circumstances surrounding a pandemic.
“Revenues continue to be good. We are grateful for that… This has allowed us to fund what cuts we made last year,” House Speaker Philip Gunn, R-Clinton, said earlier this year.
There are two key numbers to assess in the monthly Budget Committee revenue reports. One is how revenue collections look year over year, which is generally viewed as an economic indicator. The second is whether revenue collections are meeting the official estimate, which is the number the Legislature used in making its budget. If collections do not meet the estimate, the governor or Legislature could be forced to make mid-year budget cuts.
For the month of April, collections continue to be strong — $212.1 million or 28.5% above the estimate. For the year, collections are 17.7% or $804.2 million above the estimate. Much of the excess money will be directed to the Capital Expense Fund at the end of the fiscal year. Money in that fund often is used by legislators to fund various projects throughout the state.
Not surprisingly, most sources of state revenue have increased significantly year over year. Sales tax revenue, the largest single source of state revenue, is $124,2 or 8% above the amount collected during the same time period last year while use tax revenue, which is essentially the sales tax levied on internet purchases, is up $75 million or 28.5% year over year. Income tax collections are up $291.1 million or 20.1%, but that includes the revenue that was collected after the tax filing deadline was pushed back to July.
Casino revenue collections have been strong during the pandemic, up $204 million or 20.2%.
-- Article credit to Bobby Harrison of Mississippi Today --