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State revenue continues slide, but financial position remains strong

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While the state is still in a strong financial position, the downward trend in government revenue continued for May, according to a Legislative Budget Committee report.

Through May, the 11th month of the fiscal year, the state has collected $6.9 billion in revenue or $17.9 million (-0.26%) less than what was collected during the same period the previous fiscal year. It is rare for the state to collect less revenue than was collected in the previous year.

The collections would be much worse if not for a substantial spike in interest earnings due primarily to increased interest rates. Through May the state has collected $62 million or 96.7% more in interest earnings than it did during the same period last year.

The biggest reason for the drop in revenue is that the state is collecting $155.7 million or 7.2% less in personal income taxes than were collected during the same period last year. The slowdown in state income taxes is due largely to the $525 million cut in the personal income tax passed in the 2022 legislative session and that will be fully phased in by 2026.

Many of the supporters of the 2022 tax cut said the revenue lost would be offset by an increase in the sale tax on retail items. They reasoned an economic boon from reducing the income tax would generate more consumer spending that would result in increased sales tax collections. But increased sales tax collections have not made up for the loss of income taxes.

While personal income tax collections are down nearly $156 million million for the year, sales tax collections are up $78.2 million or 3.1% and use tax collections (the 7% sales tax on items purchased out of state primarily through the internet) are up $14.4 million or 4%.

Of the revenue collections, House Speaker Jason White, R-West, said, “We are watching. I would not say we are concerned.”

READ MORE: Speaker White eyes major cuts to Mississippi grocery, income taxes for 2025 session

White pointed out that in recent years the Legislature has collected significantly more revenue than it has budgeted. Because of conservative spending, the decline in revenue has not negatively impacted that state budget, though, many would argue that various needs have gone unmet because of the decision by politicians not to spend additional, available revenue.

White is hoping to pass during the upcoming session another major tax cut even as two past tax cuts are still being phased in. He wants to cut the 7% tax on groceries in half and to phase out the personal income tax, which still accounts for nearly one-third of total state revenue. The cuts would presumably be offset in part by increases in sales taxes on retail items other than groceries.

White said as long as the state is colleting “600 million or $700 million” more than is being appropriated, many Republicans will want to enact additional tax cuts.

The state has not collected less revenue than it did the previous year since fiscal year 2020 during the pandemic. Soon after that state revenue exploded thanks in part to unprecedented money from the federal government provided as part of COVID-19 relief efforts. Additionally, inflation has grown state revenues. Rising costs caused by inflation increase the amount of money the state received in sales taxes.

Other times the state collected less than the previous year include:

  • In fiscal year 2017 (presumably because of multiple tax cuts enacted over a period of years).
  • In 2009 and 2010 during the Great Recession.
  • In the early 2000s.

These prior slowdowns in revenue resulted in major budget cuts. But because collections have been so strong in recent years before the current slowdown began, budget cuts have not been needed thus far.

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 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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