Personal income growth expected to see largest increase in 40 years

(The Center Square) – Mississippi’s estimated revenues for FY 2023 are $6.49 billion, according to figures presented to the Joint Legislative Budget Committee and adopted this week.

The numbers are 0.06%, or $40.8 million, higher than FY 2022 estimates, according to figures presented by state economist Corey Miller. The state’s fiscal years run from July 1 through June 30.

Miller said the numbers include an estimated $3 billion Mississippi will receive from the Infrastructure Investment and Jobs Act passed by Congress last week.

The numbers show how Mississippi is rebounding from pandemic losses.

Wages and salaries are projected to grow 4.7% during the calendar year, Miller said. Personal income is expected to grow 9.7%, which will be the largest annual increase since 1981, he said.

Sales tax revenues were up 4.1% in FY 2021 when compared to FY 2020. Miller said during the first four months of FY 2022, the figures were 7.7% higher than the same period in the previous year.

Individual income tax revenues are up 16.9%, according to Miller.

The state saw a “relatively smaller decline” in employment than the rest of the U.S. during 2020, according to Miller. The latest figures show Mississippi has recovered 83.5% of the jobs lost in March and April of 2020.

Corporate income tax revenues in October were up 94.1% over current estimates, Miller said.

“Officials in other states speculate these increases may be the result in part of firms accelerating income reporting to head off potential federal corporate tax increases,” Miller said.

The state mirrored the U.S. as the gross domestic product increased by 2% during the first quarter and 4.5% during the second quarter. But growth has slowed and Miller predicts the final numbers for 2021 will show a 3.9% increase.

Even though growth is slowing, the number represents the largest annual expansion since 2003, Miller said.

“We anticipate growth will return to its pre-pandemic trend next year,” Miller told the committee.

The 14-member committee meets again in December to discuss their recommendations for the FY 2023 budget.

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