State revenue rebounds in December after sluggish November

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State revenue rebounds in December after sluggish November

Mississippi revenue collections rebounded in December after a sluggish November.

The collected $666.4 million during the month of December, up from the $610.1 million that was collected in December 2021.

Mississippi revenue collections have been on an uptick since basically the middle of 2020. But in November, revenue collections took a nosedive for the first time since July 2021 when tax collections were less than the amount collected a year earlier in July 2020. In November the state collected $518.8 million in taxes and other revenue to $531.9 million in November 2021.

The state revenue report, released monthly by the staff of the Legislative Budget Committee, will be watched closely during the ongoing 2023 session as legislators contemplate another tax cut or possibly a one-time rebate to state taxpayers.

In the 2022 session legislators put in place the phase in of the largest tax cut in state history — about a $525 million cut in the income tax. Gov. Tate Reeves and House Speaker Philip Gunn, among others, are advocating for adding on to the income tax cut during the 2023 session and possibly eliminating what has been the second largest source of state revenue. The income tax accounts for about one-third of state revenue.

According to the most recent revenue report, personal income tax collections were down from $173.8 million in December 2021 to $167 million last month.

The sales tax, a 7% tax on most retail items and the largest source of state revenue, was up from $217 million in December 2021 to $220.9 million last month.

The biggest jump, accounting for much of the growth in the most recent report, came in the corporate income tax collections — up from $129.7 million to $187.3 million when comparing December 2021 to 2022.

The state has been experiencing double digit growth in revenue in recent years. Revenue grew by 9.54% during the fiscal year that ended on June 30 and by an unprecedented 15.9% the previous year.

Through December of the current fiscal year, which ends June 30, the state’s growth rate is 9.9%. The state has collected $3.7 billion in revenue through the first six months of the year.

And collections are 13% or $424.8 million above the official estimate through the first six months of the fiscal year. The estimate represents the amount of money the appropriated for the current fiscal year.

Despite the skyrocketing revenue collections, legislative leaders have adopted conservative official estimates. Because of the conservative estimates, legislators are not spending a significant portion of the revenue collected each year. Those conservative estimates account for a part the nearly $4 billion in surplus funds legislators have as they begin work in the 2023 session.

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