Mississippi tax collections down for 1st quarter of year

By Emily Wagster Pettus 
Associated Press Writer

JACKSON, MS (AP) - Mississippi tax collections are lagging this year as the national economy sputters. Yet in a poor state with relatively modest spending, budget writers say they're not worried that they'll be forced to cut services.

The chairman of the House Appropriations Committee, Democrat Johnny Stringer of Montrose, said he is accustomed to cycles of good and bad economic times.

"I've farmed for close to 30 years. I've been through dry weather and rain and hail," Stringer, who grows wheat and soybeans, said in an interview Thursday from his home.

"The budget seems to be the same way as farming. I'm concerned, but I can deal with it."

State revenues were lower than expected during the first quarter of the budget year, primarily because of a drop in corporate tax collections. Businesses in parts of Mississippi, Louisiana and Texas were given extensions to file their taxes because of hurricanes Gustav and Ike. Mississippi officials say there could be uncertainty about corporate collections until early January, when the filing extension ends.

State Tax Commission spokeswoman Kathy Waterbury says Mississippi revenues were 2.3 percent behind estimates from July 1 through Sept. 30. That's a $24.8 million shortfall in the first quarter of the fiscal year. Mississippi's current budget is about $5.5 billion.

Darrin Webb, a senior economist for state Institutions of Higher Learning, said Thursday that looking at the first nine months of the calendar year gives a better indication of how Mississippi is faring. Webb said that from January through September 2008, there was growth of about 1.5 percent in tax collections for the general fund - the largest part of the state budget. During the same period in 2007, growth was about 7.9 percent.

"There's no doubt that the economy is slowing in Mississippi," Webb said. "We've seen that throughout the year. That has an impact on tax revenues. We can see that even as we look at the growth over the prior year."

Senate Appropriations Committee Chairman Alan Nunnelee, R-Tupelo, said the revenue figures are "ugly" but "incomplete." He hopes to have a clearer idea about corporate tax collections when the regular legislative session starts in January. Lawmakers will work until late March or early April to set the budget for fiscal 2010, which starts July 1.

Nunnelee said with a shaky national economy, it will be difficult for lawmakers to predict how much money the state could collect through June 30, 2010.

"The state's not operating in isolation here," Nunnelee said. "If you ask any small business to make a prediction about what their revenues are going to be for a period of six to 18 months from now, they would have difficulty."

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