Sales taxes up 21% since 2019
A recent report on the Magnolia Tribune website noted a four-year trend of higher sales tax receipts in Mississippi.
This is a sign that the state’s economy is proving itself to be resilient. Even after accounting for the extra pandemic relief money given to individuals and businesses, and even after factoring in the higher prices brought on by inflation, business appears to be going well.
To put a few numbers to the trend:
• Gross sales in Mississippi exceeded $61 billion in the fiscal year that ended on June 30. That is a 20% increase of $10.5 billion since 2019.
• The amount of sales taxes collected by the state is up 21% over those four years. That’s an increase of about $680 million, from $3.26 billion in 2019 to $3.94 billion this year.
• The number of businesses that are reporting monthly sales tax collections to the state has increased by nearly 3,800 during the four-year period. For the long term, that may be the best sign of Mississippi’s prospects, as it means that more businesses are operating today.
There is a second way to look at all of these positive statistics, and that is to consider the possibility that Mississippi’s sales tax revenue has become so excessive that it may be time to return some of that money to the people by reducing the state’s 7% tax rate.
For the past several years, advocates of eliminating the state income tax have made such an argument, along with noting that three of the South’s successful states — Texas, Florida and Tennessee — do not tax individual income.
The state income tax is still around, but the Legislature has whittled away at it, and there’s no doubt a significant number of lawmakers would eliminate it if they had the votes.
One argument against getting rid of the income tax is that it would remove one of the state’s largest revenue generators — and there has to be some way to raise money to pay for the services that residents expect.
A second argument is that as many residents and businesses as possible should have a little skin in the game; meaning that everyone needs to pay their share of taxes.
As for the sales tax, there’s no movement to reduce it. But there should be, given that the 7% tax hits hardest at people who have less money. If we believe that people know how to spend their money better than government, why not give those on the bottom half of the income ladder a boost through a reduced sales tax?
Other politics would come into play if Mississippi ever discussed this. Cities get 18.5% of the sales taxes their businesses generate. That accounts for a big chunk of their annual budgets, and they won’t want to give up any of it.
Cities shouldn’t have to. The state is willing to give up the revenue on reduced income taxes, and it should do the same if the sales tax ever got cut to 6% or 5%. With sales tax revenue healthy, now’s the time to review this topic.
Jack Ryan
Enterprise-Journal
Response slow to hospital emergency
The Mississippi Legislature’s desire to spend $103 million to soften the state’s hospital crisis has so far been a case of mostly good intentions.
Almost six months after Gov. Tate Reeves signed the legislation authorizing the expenditure, not a single penny of the supposed “emergency” money has been disbursed to the state’s financially ailing hospitals.
That’s because the Legislature, despite sitting on a surplus of about $3.6 billion, messed up by trying to be too miserly with the state’s money.
Rather than cover the expenditure with unfettered state money, lawmakers opted to be clever and fund the program with federal American Rescue Plan Act funds. They should have known that source came with many more strings attached.
One of those, according to the Mississippi State Health Department, is that the hospitals cannot be reimbursed for expenditures or losses for which they’ve already received federal pandemic relief funds. Or as State Health Office Dr. Daniel Edney put it, “You can’t double-dip.”
The Health Department, the agency in charge of evaluating the hospitals’ grant applications and disbursing the money, says that half of the hospitals that have applied so far are ineligible for the money because of the ARPA constraints.
Greenwood Leflore Hospital is not among the disqualified, according to Gary Marchand, the hospital’s interim CEO. But it still hasn’t gotten its million-dollar check, apparently because Edney is uncertain what the legislative leadership wants him to do. Does he wait until the funding problem is fixed, as legislative leaders say they will tend to when the Legislature convenes again in January? Or does he disburse what he can now?
If you ask us, that’s an easy call. Disburse now.
Some of these struggling hospitals are scraping now to make payroll. They need all the cash flow they can get.
It makes no sense to ask everyone to unduly wait because legislators picked the wrong pot of money, or because Edney and his aides didn’t sound the alarm loudly enough when lawmakers were crafting the bill or when Gov. Tate Reeves waited to sign it.
Help whatever hospitals can legally be funded now, and hope that those put on hold have enough reserves to wait until someone figures out a workaround or the Legislature returns to Jackson in a few months.
Other than calling a special session, which Reeves has not been asked to do, there’s not much other choice.
Tim Kalich
Greenwood Commonwealth
