/State revenues slide to recession levels, but leaders aren’t panicking

State revenues slide to recession levels, but leaders aren’t panicking

Recent forecast reports showed that revenues stood at $1.13 billion. This was $26.3 million less (or 2.27%) than analysts had estimated in March. It also corresponds to the quarter which began July 1st 2017. Governor Phil Bryant said, “I hope and feel fairly confident that we will be in a position to sustain our current revenue numbers, even if they aren’t as good as should be, into January.” Last week, Phil Bryant spoke to Mississippi Today. “Then, I’ll work closely with the legislative leadership to make any adjustments that we need to make during the second half of the budget year.” Sales, individual income, and corporate income taxes make up the majority of revenue collected by the state in any given month. Revenues also come from other sources, such as auto tag fees, tobacco, beer, and wine taxes, and even car tags. Many factors influence how tax collections change from month to month, including many that have little to do the economy’s health. According to economists, the unanticipated Department of Revenue expenses are the reason for the slowing quarter’s revenue. The August and July adjustments of $10.8 million are the main factors in this estimate. In July, $10.2 million was paid in film-industry rebates. $20.3 million was also paid in individual and corporate income taxes refunds. “Revenue is down. Darrin Webb the state economist stated that the numbers are what they are. But what interests me is if the data shows something about the economy. Is there an economic explanation for this? Is there something wrong with the economy when you notice a decline in the first quarter? This is not the case. Accounting is a part of their downfall.” Predicting revenue collection is not an exact science. Tate Reeves’ favorite line is: “There’s a 100 percent chance the revenue estimate is going to be wrong.” Tate Reeves’ favorite line is “There’s always a chance that the revenue estimate is wrong.” Tate Reeves was the state treasurer for eight years. The Revenue Estimating Group, which includes the state treasurer, state economist, and the heads of the Department of Revenue and Department of Finance and Administration, as well as the Legislative Budget Office, bases their estimate on economic trends. The estimates will be reassessed at their next meeting in November, and again in spring. Through a spokeswoman, Herb Frierson, Revenue Commissioner, stated that it was not possible to predict the future state of the economy in the next months. Frierson was asked if budget estimates would need to be updated in the future.