State Revenues Under Estimate Again | Jackson Free Press | Jackson, MS

State Revenues Under Estimate Again

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Gov. Haley Barbour will give his annual State of the State address tonight.

State tax revenues were down again in November by 6.88 percent, making last month the 15th consecutive month in a row where the state's income fell below expectations. The Mississippi Tax Commission reported yesterday that revenue was down 7.38 percent for the first five months of fiscal year 2010, which began July 1, 2009, according to a release from Gov. Haley Barbour's office.

The governor's release stated that the revenue decline demonstrates "the necessity of major budget reforms and an overhaul of Mississippi government structure."

"November's revenue report is further confirmation of what we have known for months: Mississippi's state budget will not recover from this recession anytime soon," Barbour said in the release. "With every passing month, tax collections have fallen lower, and further cuts in the current fiscal year are unavoidable. It also shows we must take real action in the coming Legislative Session to control spending tightly. This is not business as usual, and budget savings, instead of tax increases, are the answer."

See November's State Revenue Report

Previous Comments

ID
153867
Comment

Why is the Corporate Income tax estimate and collection so low compared to individual income tax estimate and collection? Do individuals in MS make more than the actual corporations? Is that normal? Or, could we reasonably say that the state is missing out on a large portion of revenue due to coporate tax breaks?

Author
Renaldo Bryant
Date
2009-12-02T12:21:47-06:00
ID
153870
Comment

Question for the accountants out there ... do corporations have to pay income tax monthly or quarterly like some individuals? Or is our tax system really that skewed for businesses?

Author
Ronni_Mott
Date
2009-12-02T13:25:48-06:00
ID
153872
Comment

See, the issue here is that looking at the Corporate tax structure is something not even being talked about simply because Barbour has set the debate with his non-binding and un-necessary Budget proposal. What that did was take certain ideas out of the public consciousness, like corporate tax reform, and place other ideas, like consolidating HBCU's, squarely in the center of the public debate. The shame in this is that consolidating the HBCU's wouldn't save anything in the next fiscal year and would only be a one time savings of $35 million according to Barbour himself. Yet, the state shortfall from October alone was over $51 million, in just one month!!! Meanwhile, the corporate tax projection was less than 1/4 of the individual income tax projection, or $1.2 billion, which, if they were comparable, would more than make up for the deficit that we see. Barbour has said that everything has to be considered, and I heard a couple of bubbas...uh..or.. State Senators on the radio this morning exclaiming that education must be cut, and that we already do too much in public schools for kids. No one ever even broached the possibility of corporate tax reform. Wake up people!!!!!!

Author
Renaldo Bryant
Date
2009-12-02T13:45:54-06:00
ID
153878
Comment

So anyone know a legislator well enough to tap them on the shoulder about corporate tax reform? Its not raising taxes, its their fair share. Also, last I recall, its not tax subsidies or incentives (read legalized bribe) that get corporations, its education (specifically an educated workforce), quality of life and infrastructure. And we don't get any of that without getting the money somewhere.

Author
Pilgrim
Date
2009-12-02T14:08:19-06:00
ID
153884
Comment

Baquan, I have to disagree that the corporate tax breaks in MS have been "smart". In theory, a tax break to corporations would only be "smart" if the corporation provided so many jobs that the individual income tax revenue generated by the corporation being in MS would more than make up for the tax break givien the corporation to move here. It is obvious from the numbers that we see that isn't happening in MS. To stand by a say that corporate tax reform would drive companies away in light of the things you site (low number of highly skilled, educated members of the workforce among other factors) I think would be a moot point. The way it stands now, the economy in MS can't sustain the type of corporate welfare we see as evidenced by the numbers. Issues of quality of life, educational preparedness, and even the types of incentives the state could offer are all being effected by the relative poverty of this state. Cutting programs (especially educational programs) will ony exacerbate these issues. I think MS needs leaders who actually govern for the people, not the good 'ol boys.

Author
Renaldo Bryant
Date
2009-12-02T14:58:17-06:00
ID
153887
Comment

I think what you all are failing to realize is: the state collects taxes on economic activity, whether it be payroll taxes on wages earned, income taxes on business owners, sales taxes,corporate profits, etc... The reason the collected revenues are short of predictions is that economic activity has decreased and continues to do so ahead of the rosy projections that the recession is over. So if you think it's a good idea to raise taxes (what some would call a fair share is still an increase if it raises the cost to the business that it otherwise wouldn't have to bear) you have to remember that economic activity, e.g. sales, revenues, income, etc... are already down and hurting those same businesses and taxpayers you want to get more from. The way to get more activity is not to tax it more heavily. People are going to have get more creative than that and services need to be scaled back to what we can actually pay for. Although, I won't hold my breath waiting for people to understand that.

Author
WMartin
Date
2009-12-02T15:07:08-06:00
ID
153891
Comment

Well, if we cut education too much further, that gets into eating the seed corn. If we do that, might as well abolish worker protections, environmental laws and join the race to the bottom.

Author
Pilgrim
Date
2009-12-02T15:17:37-06:00
ID
153900
Comment

Exactly Pilgrim, Cutting education in an efort to "scale back spending" will only produce more poverty by further decreasing the already too low level of education in the workforce. I agree Wmartin that revenue is down because of the poor economy. But if revenue is down because of a poor economy, and the economy is known to go through these types of cycles, isn't this indicative of a temporary problem? Then why propose such permanent measures such as school consolidation and other things? Also, why is Barbour proposing measures that will not save any more money or produce any more revenues long term while not proposing corporate tax reform, that can do those things? If we are at dire straits like he would have everyone believe, then why isn't that even in the discussion? Also, why is raising revenue off the table but cutting education isn't? You argue that placing a heavier tax burden on business is no way to mitigate a budget shortfall, but cutting education isn't the way either, especially if economic development is already hampered in this state by the poor educational attainment by the workforce here in general? Things just aren't adding up.

Author
Renaldo Bryant
Date
2009-12-02T15:48:37-06:00
ID
153906
Comment

Baquan, email me again asap brother. time to get ya on the [email protected]

Author
Kamikaze
Date
2009-12-02T15:58:52-06:00
ID
153910
Comment

You argue that placing a heavier tax burden on business is no way to mitigate a budget shortfall I am not arguing that at all. Raising taxes can be a good way to increase revenues. I am arguing that in the middle of times like these, and I don't believe that this is just cyclical recession, it's a bad idea. I don't believe this will be temporary at all. This recession and crisis has been caused by poor decision making from the top all the way to the bottom. We have been pulling demand ahead through the easy access to credit that once existed as regulations were relaxed on lenders. Basically the bill came due on decades of gluttony and there have been NO meaningful reforms enacted. Only a huge bail out and slapping the bandaids of even more borrowed money on the wounded economy. That will also run out and the bill will come due for that at some time too. You can blame Republicans and you can blame Democrats and you can blame you and me and you would be right in all cases. We have a cultural crisis as much as a financial one. I would only argue that raising taxes should be done when people can afford to pay more during good economic times, the way President Clinton did. He raised taxes during a boom and caused a projected surplus.

Author
WMartin
Date
2009-12-02T16:04:13-06:00
ID
153917
Comment

"I don't believe that this is just cyclical recession...We have a cultural crisis as much as a financial one." I would agree about the Cultural crisis part (Market fundamentalism is the major cultural flaw in American society). But history tells us that we are not in a permanent recession. For all of the manufactured credit and wealth that broke down to form this crisis, the same could be said about the cause of the Great Depression in the 1930's, and the other Recessions in the 70's and 80's. It is generally understood by economists that mixed economies such as in the US experience these cycles. What mitigages the effects of recession and depression are interventions from the government (not cutting programs), the very interventions you preach spell doom and gloom (Check Keynesian economics). If Clinton raised taxes in time of economic boom, the only way the boom came was through government intervention in the market, exactly the thing that Reagan did in the 80's (by raiding the Social Security trust fund) and Bush I did in the 90's (by regulating the S&L industry). Obama has done the same thing with stimulus spending now. It is only a matter of time before the economy turns around. With that in mind and learning from history, why then does Barbour propose such drastic permanent changes like consolidating HBCU's that address neither (comparatively measurable)spending cuts nor revenue generation? I think he is doing what State Rep. Buck noted, using this budgetary fear tactic to push through ideological reforms that have very little to do with the budget.

Author
Renaldo Bryant
Date
2009-12-02T16:22:50-06:00
ID
153919
Comment

You can certainly believe if you wish that the tech boom in the 90's was generated by the government if you want to. I suppose you mean Al Gore's invention of the internet. And yes, I do believe that eventually the economy will turn around. The great depression only lasted a little more than a decade. So it is really only a matter of time, but the longer it lasts the more pain will be inflicted. Raising taxes, however, on already struggling taxpayers and businesses will not speed things up. At the same time you should also realize that you are looking at raising an additional half billion dollars at the state level just to be able to keep spending at previously budgeted levels that's before talking about any new interventions by the government. Which of course doesn't take into account any of the new taxes, fees, penalties and requirements currently being dreamt up at the Federal level. Don't get me wrong I am not an anarchist. I do believe the government should provide services and should collect taxes to provide them. I also believe education should be our number one priority. And that is what it comes down to. We need to set our priorities in a way that reflects our values and budget what we have accordingly. From the government down to you and me, we need to learn that we only have finite resources and we must be able to pay for what we promise. To your question about Barbour's budget recommendations, I have no idea. When he proposed the mergers it made no sense to me. I knew when I saw the news there would be a huge fight over it and it would have no chance. So it seemed to me like a diversion to get something else through while everyone was screaming over that. That being said, I don't know why all state universities have to have separate administrations. There could be some cost savings to be had there but not enough to make enough difference to be worth the fight.

Author
WMartin
Date
2009-12-02T17:07:14-06:00

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