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Are revenue collections already slowing as state leaders consider massive tax cut?

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Are revenue collections already slowing as state leaders consider massive tax cut?

Mississippi’s historic growth in state tax collections is slowing — at least for a month.

This past month the state collected $518.8 million in taxes and other revenue compared to $531.9 million in November 2021.

Does the November revenue report represent the start of a slowdown in Mississippi tax collections that have grown at an unprecedented rate for more than a year?

It is a fair question? After all, Gov. Tate Reeves, House Speaker Philip Gunn and others are citing the unprecedented growth in state revenue as a reason to enact a tax cut that will take about $2 billion yearly out of state coffers.

The November report recently released by the staff of the Legislature Budget Committee represents the first slowdown in monthly revenue collections for the state since July 2021 when tax collections were less than the amount collected a year earlier in July 2020.

Granted, folks who study Mississippi revenue collection trends are fond of saying that one month does not a trend make. The state saw increased collections for 16 months after that slowdown in July 2021. So, there is a good chance that the collections will bounce back in December.

But as sure as night follows day, the slowdown in Mississippi tax collections eventually will occur. History tells us that.

Revenue grew by 9.54% during the fiscal year that ended on June 30 and by an unprecedented 15.9% the previous year.

The result of the strong growth is that the state has a revenue surplus of $3.9 billion going into the 2023 legislative session that begins in early January. Having $4 billion in reserves is staggering considering the total state support budget, which consists primarily of general tax collections, such as the sales tax on retail items and the income tax, is $7.86 billion for the current fiscal year.

A small portion of those reserve funds, about $450 million, are COVID-19 federal relief funds and money from lawsuit settlements, but most of the funds are the result of a boon in state tax collections.

The net result of those large reserves is that state political leaders are feeling pretty good and bragging on their governance prowess.

“We are in a great financial position,” Gunn, R-Clinton, said recently, echoing similar comments of Reeves.

“We can’t neglect or ignore the fact that conservative spending led to this type of financial situation,” Gunn continued. “We have rejected the attempts to grow government over the last many years and this (revenue surplus) has been the result of that.”

That is all well and good except for the fact most states have had similar unprecedented surpluses. California, for example, a state that Mississippi politicians like to criticize for its liberal policies, had a whopping $98 billion surplus, though, it appears that the West Coast state’s tax collections already are slowing.

But before slowing, California provided one-time rebates of between $200 and $1,500 to individuals earning less than $250,000 and to households earning less than $500,000.

Multiple states, controlled by Republicans and Democrats, have provided rebates.

In Mississippi, the taxpayers have not yet reaped any direct cash benefits from the massive surplus. In the 2022 session, legislators approved the largest tax cut in state history – a $525 million cut to the income tax. But that tax cut will not be fully phased in until 2026. Taxpayers can receive a small monthly benefit from the tax cut starting in January if they change their payroll deductions. Otherwise, taxpayers will receive no benefit from the tax cut until they file their tax returns in early 2024.

Lt. Gov. Delbert Hosemann has proposed the Legislature provide a rebate in the 2023 session. Reeves and Gunn are proposing the complete elimination of the income tax. Such a cut will take an additional $2 billion out of the state treasury on top of the $525 million tax cut made last year.

During much of the 1990s, thanks to the start and incredibly rapid expansion of casino gambling, Mississippi experienced a prolonged period of historic revenue growth.

But by the early 2000s, as a recession hit the country that was especially bad in Mississippi, the Legislature and then-Gov. Ronnie Musgrove were having to cut budgets.

That is not to say that the Legislature and governor should not look for innovative ways to spend the surplus for the betterment of the state and its citizens.

A reasonable debate can be had on whether it is better to return funds to citizens or use the surplus to address the litany of problems facing the state. But it is safe to assume tax cuts that take more than $2.5 billion yearly out of state coffers will have a lasting impact, especially when revenue collections slow as they most assuredly will.

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

Mississippi Today

On this day in 1997

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mississippitoday.org – Jerry Mitchell – 2024-12-22 07:00:00

Dec. 22, 1997

Myrlie Evers and Reena Evers-Everette cheer the jury verdict of Feb. 5, 1994, when Byron De La Beckwith was found guilty of the 1963 murder of Mississippi NAACP leader Medgar Evers. Credit: AP/Rogelio Solis

The Mississippi Supreme Court upheld the conviction of white supremacist Byron De La Beckwith for the 1963 murder of Medgar Evers. 

In the court’s 4–2 decision, Justice Mike Mills praised efforts “to squeeze justice out of the harm caused by a furtive explosion which erupted from dark bushes on a June night in Jackson, Mississippi.” 

He wrote that Beckwith’s constitutional right to a speedy trial had not been denied. His “complicity with the Sovereignty Commission’s involvement in the prior trials contributed to the delay.” 

The decision did more than ensure that Beckwith would stay behind bars. The conviction helped clear the way for other prosecutions of unpunished killings from the Civil Rights Era.

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

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Mississippi Today

Medicaid expansion tracker approaches $1 billion loss for Mississippi

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mississippitoday.org – Bobby Harrison – 2024-12-22 06:00:00

About the time people ring in the new year next week, the digital tracker on Mississippi Today’s homepage tabulating the amount of money the state is losing by not expanding Medicaid will hit $1 billion.

The state has lost $1 billion not since the start of the quickly departing 2024 but since the beginning of the state’s fiscal year on July 1.

Some who oppose Medicaid expansion say the digital tracker is flawed.

During an October news conference, when state Auditor Shad White unveiled details of his $2 million study seeking ways to cut state government spending, he said he did not look at Medicaid expansion as a method to save money or grow state revenue.

“I think that (Mississippi Today) calculator is wrong,” White said. “… I don’t think that takes into account how many people are going to be moved off the federal health care exchange where their health care is paid for fully by the federal government and moved onto Medicaid.”

White is not the only Mississippi politician who has expressed concern that if Medicaid expansion were enacted, thousands of people would lose their insurance on the exchange and be forced to enroll in Medicaid for health care coverage.

Mississippi Today’s projections used for the tracker are based on studies conducted by the Institutions of Higher Learning University Research Center. Granted, there are a lot of variables in the study that are inexact. It is impossible to say, for example, how many people will get sick and need health care, thus increasing the cost of Medicaid expansion. But is reasonable that the projections of the University Research Center are in the ballpark of being accurate and close to other studies conducted by health care experts.

White and others are correct that Mississippi Today’s calculator does not take into account money flowing into the state for people covered on the health care exchange. But that money does not go to the state; it goes to insurance companies that, granted, use that money to reimburse Mississippians for providing health care. But at least a portion of the money goes to out-of-state insurance companies as profits.

Both Medicaid expansion and the health care exchange are part of the Affordable Care Act. Under Medicaid expansion people earning up to $20,120 annually can sign up for Medicaid and the federal government will pay the bulk of the cost. Mississippi is one of 10 states that have not opted into Medicaid expansion.

People making more than $14,580 annually can garner private insurance through the health insurance exchanges, and people below certain income levels can receive help from the federal government in paying for that coverage.

During the COVID-19 pandemic, legislation championed and signed into law by President Joe Biden significantly increased the federal subsidies provided to people receiving insurance on the exchange. Those increased subsidies led to many Mississippians — desperate for health care — turning to the exchange for help.

White, state Insurance Commissioner Mike Chaney, Gov. Tate Reeves and others have expressed concern that those people would lose their private health insurance and be forced to sign up for Medicaid if lawmakers vote to expand Medicaid.

They are correct.

But they do not mention that the enhanced benefits authored by the Biden administration are scheduled to expire in December 2025 unless they are reenacted by Congress. The incoming Donald Trump administration has given no indication it will continue the enhanced subsidies.

As a matter of fact, the Trump administration, led by billionaire Elon Musk, is looking for ways to cut federal spending.

Some have speculated that Medicaid expansion also could be on Musk’s chopping block.

That is possible. But remember congressional action is required to continue the enhanced subsidies. On the flip side, congressional action would most likely be required to end or cut Medicaid expansion.

Would the multiple U.S. senators and House members in the red states that have expanded Medicaid vote to end a program that is providing health care to thousands of their constituents?

If Congress does not continue Biden’s enhanced subsidies, the rates for Mississippians on the exchange will increase on average about $500 per year, according to a study by KFF, a national health advocacy nonprofit. If that occurs, it is likely that many of the 280,000 Mississippians on the exchange will drop their coverage.

The result will be that Mississippi’s rate of uninsured — already one of the highest in the nation – will rise further, putting additional pressure on hospitals and other providers who will be treating patients who have no ability to pay.

In the meantime, the Mississippi Today counter that tracks the amount of money Mississippi is losing by not expanding Medicaid keeps ticking up.

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

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Mississippi Today

On this day in 1911

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mississippitoday.org – Jerry Mitchell – 2024-12-21 07:00:00

Dec. 21, 1911

A colorized photograph of Josh Gibson, who was playing with the Homestead Grays Credit: Wikipedia

Josh Gibson, the Negro League’s “Home Run King,” was born in Buena Vista, Georgia. 

When the family’s farm suffered, they moved to Pittsburgh, and Gibson tried baseball at age 16. He eventually played for a semi-pro team in Pittsburgh and became known for his towering home runs. 

He was watching the Homestead Grays play on July 25, 1930, when the catcher injured his hand. Team members called for Gibson, sitting in the stands, to join them. He was such a talented catcher that base runners were more reluctant to steal. He hit the baseball so hard and so far (580 feet once at Yankee Stadium) that he became the second-highest paid player in the Negro Leagues behind Satchel Paige, with both of them entering the National Baseball Hame of Fame. 

The Hall estimated that Gibson hit nearly 800 homers in his 17-year career and had a lifetime batting average of .359. Gibson was portrayed in the 1996 TV movie, “Soul of the Game,” by Mykelti Williamson. Blair Underwood played Jackie Robinson, Delroy Lindo portrayed Satchel Paige, and Harvey Williams played “Cat” Mays, the father of the legendary Willie Mays. 

Gibson has now been honored with a statue outside the Washington Nationals’ ballpark.

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

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