The initial estimate for FY 2022 was $5.927 billion. April report shows lawmakers’ increase well founded.
During this year’s legislative session, the Joint Legislative Budget Committee revised its Fiscal Year 2022 state revenue estimates by nearly $1 billion dollars to more accurately reflect the state’s fiscal position.
Now, the April collections report from the Legislative Budget Office shows that Mississippi state revenues are on pace to meet and perhaps exceed those increased estimates, as state revenues could approach the $7 billion mark.
The FY 2022 Sine Die Revenue Estimate adopted in 2021 was $5,927,000,000. On March 25, 2022, the Joint Legislative Budget Committee revised the FY 2022 revenue estimate upward from $5,927,000,000 to $6,875,200,000, an increase of $948.2 million.
According to their April report, the FY 2022 year-to-date actual collections are $251 million above the year-to-date FY 2022 revised revenue estimate.
Total revenue collections for the month of April FY 2022 were $229,133,983 or 28.66% above the sine die revenue estimate. Fiscal year-to-date revenue collections through April 2022 are $1,120,028,593 or 23.23% above the sine die estimate. Fiscal year-to-date total revenue collections through April 2022 are $590,213,736 or 11.03% above the prior year’s collections.
The graph above compares the actual revenue collections to the sine die revenue estimate for each of the main tax revenue sources. The figures reflect the amount of the actual collections for Sales, Individual, Corporate, Use and Gaming taxes, showing where those categories fell above or below the estimate for the month and fiscal year-to-date. The graph also compares fiscal year-to-date actual collections to prior year actual collections, as of April 30, 2022.
The change by the Joint Legislative Budget Committee during the 2022 Session to increase the revenue estimate was a large factor when considering a full income tax elimination proposed by Speaker of the House Philip Gunn and supported by Governor Tate Reeves. Another proposal was presented by the Senate, but it took a more stepped down approach.
Ultimately, a compromise was reached, and the largest income tax cut in state history was passed by both chambers. As noted in the graphs, the individual income tax encompasses a large portion of the state’s budget, around one third.
Highlights of the income tax cut compromise plan:
- Eliminates the 4% tax bracket by 2023
- Single income taxpayers do not pay taxes on first $18,300 of income
- Married filers do not pay taxes on first $36,600 of income
- 5% bracket cut to 4.7% by 2024, 4.4% by 2025 and 4.0% by 2026
- Provides tax relief of $525 million per year by 2026
The plan was ultimately signed by Governor Reeves and became law.
You can read the full report below: