Revenue Estimate for FY 2013 Released, Another Tight Budget Year Forecast

November 17th, 2011

This week, Dr. Darrin Webb presented the State General Fund Revenue Estimates for FY 2012 and 2013 to the Joint Legislative Budget Committee.  Webb also provided a brief review of the economic considerations underlying these estimates.

Neither the State nor the Nation has fully recovered from the recession ending in June 2009.  In Mississippi, economic growth is nearly at a standstill.  Employment for the first nine months of 2011 was only 0.6 percent above the 2010 level.  After adjusting for inflation, income tax withholdings were essentially flat compared with last year’s level.

Dr. Webb also noted that current events in Europe could easily result in a national recession before the fiscal year ends.  Closer to home, Mississippi’s slow growth makes the risk of recession substantial.

In spite of the bleak economic forecast, estimated general fund revenue for FY 2012 (the current fiscal year) was adjusted upward by $60,000,000 from the last estimate provided at the end of the 2011 legislative session.  FY 2013 revenue is projected to be slightly higher than current year revenue.  However, revenues are still projected to be $244 million lower than FY 2008 general fund revenue.

Mississippi General Fund Revenue Actual and Estimates FY 2008 through FY 2013

Lawmakers have responded to the diminishing revenue with year after year of budget cuts to vital public services.  The cuts only approach to the state’s revenue problem has meant, among other things, fewer teachers, decreased access to mental health programs, and tuition increases at state universities.

A balanced approach that includes updating the state’s revenue systems is necessary to fund the public structures that provide the foundation for creating jobs and building a strong economy.   Employers and workers alike need quality and accessible K-12 and higher education systems, strong infrastructure, and safe communities in order to prosper.

Co-authored by:
Francinia D. McKeithan, Policy Analyst/ SFAI Policy Fellow
and Sara Miller, Senior Policy Analyst
Source: Mississippi Revenue Estimating Committee