State tax collections increased by $924 million, or nearly 16%, year-over-year for the fiscal 2021 year that ended in June, a state report released Tuesday showed, as Mississippi’s economy recovers from the COVID-19 pandemic and percolates from billions in federal government spending.
The largest increase for fiscal year 2021 was in corporate income taxes, up $296 million or 54% year over year. Individual income taxes, use taxes (from online sales) and casino taxes also saw large percentage increases for the year, while sales taxes saw a modest increase of $88 million, or 4%.
Total state tax collections increased from about $5.8 billion to $6.7 billion year-over-year. This comes after the state ended last fiscal year at $151 million, or 2.5% below collections for the prior year amid the pandemic economic downturn. Over the last decade or so, state revenue growth has averaged around 3%.
Lt. Gov. Delbert Hosemann on Tuesday said he is “pleasantly surprised” by the fiscal year-end numbers.
“We are particularly pleased that the numbers are strong across the board,” Hosemann said. “The revenue strength is there with corporate and individual income taxes and sales taxes — hitting on all cylinders and that shows we have a healthy economy.”
Economists have also cited multiple federal stimulus packages passed by Congress to address the pandemic for fueling the Mississippi economy and revenue collections. Mississippi received more than $1.25 from the first round of federal pandemic spending and will be receiving around $6 billion all told from the most recent measures.
“Some of this obviously is the federal government pouring money in, with the CARES Act, and that is continuing with the RESCUE Act, so that’s good in that it is continuing and should help, although how we ever pay all that back as a country, I’m not sure,” Hosemann said. “But as long as we spend it well, it should help. I’ve been visiting with over 50 boards of supervisors and cities, and emphasizing the thing we need to do is look at how to spend this so it doesn’t just help and last for one or two years, but in ways that help for at least one or two generations.
“None of us ever predicted this kind of arrangement — this kind of ability to fund projects the state couldn’t have otherwise, water, sewer, broadband — so the real discussion now needs to turn to how we make the best use of these taxpayer dollars.”
The collections for fiscal year 2021 that ended in June also saw a large increase — about $230 million — from taxes that would have normally been collected in the prior year but were delayed because of pandemic extensions to pay.
|Source||FY2020||FY2021||Over/under prior year||% Change|
|Insurance premium tax||312,762,228||339,282,412||26,520,184||8.48%|
|Other Dept. of Revenue||38,131,470||37,680,479||(450,991)||-1.18%|
|Other than DOR||171,437,599||179,359,611||7,922,012||4.62%|
|All other transfers/collections||40,050,689||4,113,440||(35,937,249)||-89.73%|
The post Mississippi sees massive increases in tax collections as economy awakens, stimulus funds flow appeared first on Mississippi Today.
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