Despite the slowdown in the economy caused by the COVID-19 epidemic, the state appears to have collected sufficient revenue, primarily through tax collections, so that the fiscal year ended on June 30 with an excess. A report released recently by the Legislative Budget Committee states that the state had a surplus of $55.9million at the end of the fiscal year. However, this number may be adjusted over the next two months. The surplus does not mean that Gov. Tate Reeves, and/or the Legislature, will not have to dip into state reserves funds in order to balance the budget for the just-ended fiscal year. About $680 million is available in the state’s Working Cash Stabilization Fund, or rainy-day fund. It was likely that the rainy-day fund would be required to balance the budget after a sharp drop in April tax collections. According to the Legislative Budget Committee staff report, collections recovered in the last two months of fiscal year despite the pandemic. The fiscal year’s total revenue collection was $5.82 billion, while the total appropriations reached $5.76 billion. The state still collected less revenue in the last fiscal year than it had in the previous fiscal year, which is only the fifth such occasion since 1970. The state received $151 million, or 2.5 percent less in the most recent fiscal year. Surprisingly the state’s largest source for revenue, the 7.5% sales tax on most retail products, increased $18.1 million, or.85%. Darrin Webb, the state economist, said that Mississippi imposes a full sales tax on groceries. It also collects the largest state-imposed sales taxes on food items. Despite some retailers experiencing difficulties during the pandemic it doesn’t appear that grocery sales have decreased or increased. Many argue that the tax on food is a retrogressive tax that puts a greater burden on the poor. Webb stated that the tax was a revenue source for the state during the coronavirus pandemic. Webb recently stated that the sales tax stabilizes your revenue source. “And again, my heart is not in it. I don’t look at the data, I only look at forecasting. The elimination of the food tax increases instability in your revenue source.” Webb speculated that during the pandemic, the grocery tax helped small towns as people who would normally travel to larger cities to buy groceries were more likely than ever to shop locally. Webb stated that the grocery tax has been a vital source of revenue for many small communities. “It has been a lifesaver for many small communities…I believe it has helped small communities greatly and has also helped the overall state’s revenue stream.” Personal income tax, which is the state’s second-largest source of revenue, fell $78.5 million, or 4.1 percent. This number could be misleading as the state Department of Revenue extended tax filing and payment deadlines from April 15 to July 15 of the previous fiscal year. This could lead to July revenue collections being higher than usual. The internet sales tax of 7 percent, which is imposed on internet sales, increased 4.1 percent to $13.5 million, while the liquor tax rose $7.3 million to 9 percent. Other sources of revenue declined for the year.