/Legislative leaders expect modest revenue growth next fiscal year

Legislative leaders expect modest revenue growth next fiscal year

Bryant and the Legislative Budget Committee, which consists of 14 members, adopted the estimate Thursday morning ahead of the 2019 legislative session. Before the work on the budget for next year’s fiscal year can start, the revenue estimate must be approved. If the growth rate reaches 2.6 per cent, which is expected, legislators will have $5.8billion in general fund revenue to support various state programs. These include education, health care, and law enforcement. Officials project that the next fiscal year will see $146 million more in general fund revenue than the 2.6 percent. Lt. Governor Philip Gunn is part of the Budget Committee. The budget committee, which includes Lt. Gov. Philip Gunn, Tate Reeves and the governor, adopted the estimate based upon the recommendations of state financial experts including Treasurer Lynn Fitch and Darrin Webb, the state Economist, and Herb Frierson, the Revenue Commissioner. The release of the October revenue report by the Legislative Budget Committee coincided with the release. Revenue collections for October were $31million less than the estimate. The year ended July 1st with collections $13.7 million higher than the estimate. The governor and/or legislators can make budget cuts mid-year if collections fall below the estimate. The year’s collections are 1.26 percentage points higher than the amount collected in the same period last year. The governor and the Budget Committee project that revenue will grow by 2.6 percent in the next fiscal year. This would be a much greater increase than the previous years. Recent years have seen collections stagnant, or even non-existent for some years. Bryant and Legislature had to make several rounds of cuts in 2016-17. Some agencies saw their appropriations reduced by more than 10%. Corporate tax collections continue to be the largest drain on revenue collection. Corporate tax collections for the year are down 5.5% or $5.5million. This is due to the phase-in of 2016 legislation, which reduced corporate tax collections by over $300 million. The use tax collection, including the 7.5% levy on online purchases, has increased 19.2 percent to $15.3 million. The state’s two biggest sources of revenue are the sales tax on retail goods, which is now up 2.5 percent, or $14.1million. However, the personal income tax is basically level at $3.1 million, or 0.5 percent.