/Revenue collections drop entering final quarter of fiscal year

Revenue collections drop entering final quarter of fiscal year

The largest shortfall was in corporate income tax collections, which fell $22 million (22 percent) below projections. According to the Legislative Budget Office’s monthly income report, sales tax collections and individual income taxes collections fell below projections. The state is now facing the last three months of fiscal year with slightly lower collections than projected. The state has so far collected $73million less than it did last year. The state has historically collected more individual income tax revenue in April than expected, because Mississippians file tax returns to meet the April 15 deadline. The general fund is funded by tax collections. It pays for government services such as public education and Medicaid reimbursements. If revenues fall below projections officials will need to authorize dips in reserve funds or budget cuts mid-year. In late March, lawmakers approved a budget of $6.1 billion for the next fiscal year. This is a 0.37 percent increase over the current fiscal-year’s budget. Although the budget for this fiscal year was lower than that of last year, legislative leaders expressed optimism about revenue growth. Revenue collections are expected to rise for the first time in the current fiscal year, which is also the first in which a cut to corporate franchise taxes is being implemented. Misti Munroe is chief revenue officer at the Legislative Budget Office. She said that corporate franchise tax collections are not monitored during fiscal year. Instead, they are tracked on the annual tax returns of corporations. The revenue collection for Mississippi is expected to drop at least $415 Million annually over the next ten year following the 2016 state tax cut that was the biggest in history. According to Department of Revenue projections Mississippi will lose $46.5 million due to the tax cuts in fiscal 2019. The tax cuts will reduce the state’s revenue by $70.8million each fiscal year, according to projections. The state will lose $415 million in annual revenue by fiscal year 2028.