Mississippi Today

Mississippi’s credit outlook lowered from stable to negative over weak economics, tax cuts, retirement system

Published

1 month ago

April 9, 2024

mississippitoday.org – Geoff Pender – 2024-04-09 17:00:04

S&P Global Ratings, one of the big three credit rating agencies, has lowered Mississippi's outlook from stable to negative, citing concerns about weak state economic trends, continuing tax cuts and the state's massive government pension plan.

S&P lowered the outlook — usually considered a fiscal warning shot to governments — in March, but did not lower the state's relatively good credit rating of AA on its general obligation debt or its ratings on other types of debt. But it said the outlook on all Mississippi's ratings is negative.

It appears neither Moody's Investor Services nor Fitch Ratings, the other two agencies, has recently lowered the state's outlook or bond ratings.

Lawmakers during Senate debate on Tuesday over the state's government employee retirement system obliquely referred to the lowered credit outlook.

“If you think our bond rating has issues now, that ain't going to help it,” said Sen. Hob Bryan, D-Amory, arguing against a move to strip the retirement system board of authority to require increased employer contributions to the plan.

A downgrade in credit ratings can cost taxpayers millions when the state refinances debt or borrows money. In 2016, with the state budget tanking from numerous tax cuts and a flagging economy, Fitch downgraded the state's credit rating from AA+ to AA and Moody's lowered its outlook to negative.

S&P in a March statement about Mississippi said: “The outlook revision reflects our view of elevated credit risks stemming partly from persistently weak economic and demographic trends, which could result in an increasingly challenging budget environment as the state manages through its phased-in income tax reductions. The risk of future budgetary pressure is further elevated due to pension contributions falling short of their actuarially determined contribution amounts in each of the past three years and a relatively high level of unfunded pension liabilities. Finally, recurring delays in adopting the state's annual revenue forecasts or a reduced commitment to debt management policies could worsen our view of the state's budgetary performance and Financial Management Assessment.”

State Treasurer David McRae said he questions whether S&P is overreacting in its analysis and outlook downgrade, but said he takes all such reports seriously.

“While our credit rating remains strong and unchanged, this is a warning of where S&P may go if the issues they highlighted are not addressed,” McRae said. “S&P has always been an outlier and all too quick to assume the worst when other credit-rating agencies provide a more nuanced analysis of complex issues. That said, I take all recommendations seriously and encourage the Legislature to address the underlying issues without tax increases, whether direct or indirect on Mississippians.”

House Ways and Means Chairman Trey Lamar, R-Senatobia, questioned the outlook change, saying “we are in the best financial shape we've been in in our history.”

“Our rainy day account is full … and we haven't borrowed any money in three years,” Lamar said.

The S&P outlook references tax cuts passed the Legislature in 2022. This was the largest personal income tax cut in state history, which began being phased in 2023 and will continue through 2026, eventually reducing state revenue by an estimated $525 million a year.

Mississippi's revenue and state coffers, like those in many states, has seen huge increases from the federal government spending billions during and after the 2020 COVID-19 pandemic.

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

Post Views: 90

Related Topics:Featured Mississippi News Mississippi Today News

Up Next

On this day in 1967

Don't Miss

Judge rejects evidence of suicide in denying new trial for woman convicted of murder

Mississippi Today

On this day in 1925

Published

3 hours ago

May 19, 2024

Staff Editor

MAY 19, 1925

In this 1963 photo, civil rights leader Malcolm X speaks to reporters in Washington. Credit: Associated Press

Malcolm X was born Malcolm Little in Omaha, Nebraska. When he was 14, a teacher asked him what he wanted to be when he grew up and he answered that he wanted to be a lawyer. The teacher chided him, urging him to be realistic. “Why don't you plan on carpentry?”

In prison, he became a follower of Nation of Islam leader Elijah Muhammad. In his speeches, Malcolm X warned Black Americans against self-loathing: “Who taught you to hate the texture of your hair? Who taught you to hate the color of your skin? Who taught you to hate the shape of your nose and the shape of your lips? Who taught you to hate yourself from the top of your head to the soles of your feet? Who taught you to hate your own kind?”

Prior to a 1964 pilgrimage to Mecca, he split with Elijah Muhammad. As a result of that trip, Malcolm X began to accept followers of all races. In 1965, he was assassinated. Denzel Washington was nominated for an Oscar for his portrayal of the civil rights leader in Spike Lee's 1992 award-winning film.

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

Did you miss our previous article…
https://www.biloxinewsevents.com/?p=359877

Post Views: 7

Mississippi Today

On this day in 1896

Published

1 day ago

May 18, 2024

Staff Editor

MAY 18, 1896

The U.S. Supreme Court ruled 7-1 in Plessy v. Ferguson that racial segregation on railroads or similar public places was constitutional, forging the “separate but equal” doctrine that remained in place until 1954.

In his dissent that would foreshadow the ruling six decades later in Brown v. Board of Education, Justice John Marshall Harlan wrote that “separate but equal” rail cars were aimed at discriminating against Black Americans.

“In the view of the Constitution, in the eye of the law, there is in this country no superior, dominant, ruling class of citizens,” he wrote. “Our Constitution in color-blind and neither knows nor tolerates classes among citizens. In respect of civil rights, all citizens are equal before the law. The humblest is the peer of the most powerful. The law … takes no account of his surroundings or of his color when his civil rights as guaranteed by the supreme law of the land are involved.”

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

Did you miss our previous article…
https://www.biloxinewsevents.com/?p=359301

Post Views: 32

Mississippi Today

Renada Stovall, chemist and entrepreneur

Published

2 days ago

May 17, 2024

Staff Editor

mississippitoday.org – Vickie King – 2024-05-17 11:53:33

Renada Stovall sat on the back deck of her rural Arkansas home one evening, contemplating life when she had a life-altering epiphany…

“I gotta get out of these woods.”

She heard it as clear as lips to her ear and as deep as the trees surrounding her property. Stovall's job as a chemist had taken her all over the country. In addition to Arkansas, there were stints in Atlanta, Dallas and Reno. But she was missing home, her parents and friends. She also knew, she needed something else to do.

“I thought, what kind of business can I start for myself,” said Stovall, as she watered herbs growing in a garden behind her south Jackson home. Some of those herbs are used in her all-natural products. “I know when I lived in Reno, Nevada, where it's very hot and very dry, there really weren't products available that worked for me, my hair, and my skin suffered. I've got a chemistry degree from Spelman College. I took the plunge and decided to create products for myself.”

A variety of soaps created by Renada Stovall. Stovall is a chemist who creates all natural skin and hair care products using natural ingredients.

In 2018, Stovall's venture led to the creation of shea butter moisturizers and natural soaps. But she didn't stop there, and in December 2022, she moved home to Mississippi and got to work, expanding her product line to include body balms and butters, and shampoos infused with avocado and palm, mango butter, coconut and olive oils.

Nadabutter, which incorporates Renada's name, came to fruition.

Renada Stovall, owner of Nadabutter, selling her all-natural soaps and balms at the Clinton Main Street Market: Spring into Green, in April of this year.

Stovall sells her balms and moisturizers at what she calls, “pop-up markets,” across the state during the summer. She's available via social media and also creates products depending on what of her ingredients a customer chooses. “My turmeric and honey is really popular,” Stovall added.

“The all-natural ingredients I use are great for conditioning the skin and hair. All of my products make you feel soft and luscious. The shea butter I use comes from West Africa. It's my way of networking and supporting other women. And it's my wish that other women can be inspired to be self-sufficient in starting their own businesses.”