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Mississippi sees massive increases in tax collections as economy awakens, stimulus funds flow



(Credit: PublicDomainPictures from Pixabay)

State tax collections increased by $924 million, or nearly 16%, year-over-year for the fiscal 2021 year that ended in June, a state report released Tuesday showed, as Mississippi’s economy recovers from the COVID-19 pandemic and percolates from billions in federal government spending.

The largest increase for fiscal year 2021 was in corporate income taxes, up $296 million or 54% year over year. Individual income taxes, use taxes (from online sales) and casino taxes also saw large percentage increases for the year, while sales taxes saw a modest increase of $88 million, or 4%.

Total state tax collections increased from about $5.8 billion to $6.7 billion year-over-year. This comes after the state ended last fiscal year at $151 million, or 2.5% below collections for the prior year amid the pandemic economic downturn. Over the last decade or so, state revenue growth has averaged around 3%.

Lt. Gov. Delbert Hosemann on Tuesday said he is “pleasantly surprised” by the fiscal year-end numbers.

“We are particularly pleased that the numbers are strong across the board,” Hosemann said. “The revenue strength is there with corporate and individual income taxes and sales taxes — hitting on all cylinders and that shows we have a healthy economy.”

Economists have also cited multiple federal stimulus packages passed by Congress to address the pandemic for fueling the Mississippi economy and revenue collections. Mississippi received more than $1.25 from the first round of federal pandemic spending and will be receiving around $6 billion all told from the most recent measures.

“Some of this obviously is the federal government pouring money in, with the CARES Act, and that is continuing with the RESCUE Act, so that’s good in that it is continuing and should help, although how we ever pay all that back as a country, I’m not sure,” Hosemann said. “But as long as we spend it well, it should help. I’ve been visiting with over 50 boards of supervisors and cities, and emphasizing the thing we need to do is look at how to spend this so it doesn’t just help and last for one or two years, but in ways that help for at least one or two generations.

“None of us ever predicted this kind of arrangement — this kind of ability to fund projects the state couldn’t have otherwise, water, sewer, broadband — so the real discussion now needs to turn to how we make the best use of these taxpayer dollars.”

The collections for fiscal year 2021 that ended in June also saw a large increase — about $230 million — from taxes that would have normally been collected in the prior year but were delayed because of pandemic extensions to pay.

Source FY2020 FY2021 Over/under prior year % Change
Sales tax $2,156,122,116 $2,244,361,161 $88,239,045 4.09%
Individual income 1,819,610,333 2,226,159,994 406,549,661 22.34%
Corporate income 548,728,829 845,133,396 296,404,567 54.02%
Use tax 339,863,553 408,776,281 68,912,728 20.28%
Insurance premium tax 312,762,228 339,282,412 26,520,184 8.48%
Tobacco/alcohol 255,556,568 283,667,815 28,111,247 11%
Oil/gas severance 22,988,510 18,183,004 (4,805,506) -20.90%
Gaming 110,694,305 153,724,705 43,030,400 38.87%
Other Dept. of Revenue 38,131,470 37,680,479 (450,991) -1.18%
Other than DOR 171,437,599 179,359,611 7,922,012 4.62%
Sub-total 5,775,895,511 6,736,328,858 960,433,347 16.63%
All other transfers/collections 40,050,689 4,113,440 (35,937,249) -89.73%
Total $5,815,946,200 $6,740,442,298 $924,496,098 15.90%
The data in this table comes from the Mississippi Joint Legislative Budget Committee.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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