Mississippi currently has a record budget surplus. As the Magnolia Tribune recently reported, total March 2023 state revenue collections were 16.84% over the sine-die revenue estimate for the fiscal year. Total year-to-date collections came in at $601,866,349 or 12.86% over estimates.
When revenues are far higher than expected there is always a danger that politicians will find new ways to spend it. To try to prevent that from happening, the Mississippi Center for Public Policy published a Responsible 2024 Budget for our state at the start of this year’s legislative session.
Overall, we are pleased to see that although spending increased it did so broadly at the rate we proposed.
The Mississippi Legislature officially set the Fiscal Year 2024 state general fund at $6.63 million. While this is the largest operating budget in state history, it was not as large an increase as we had feared.
In our Responsible Budget for Mississippi, we called for the state’s general fund to have an appropriations limit of $6.75 billion. It seems that lawmakers heeded our advice, spending well below the cap.
The FY2023 estimated state revenue collection is set at $6.987 billion. That leaves our state with at least a $600 million surplus just for this fiscal year alone since the budget for 2023 is only $6.3 billion. Mississippi already has a $3.9 billion surplus in the bank, and with the additional $6.3 million from this year, will have well over $4 billion.
Our report projects revenue collections for FY2024 to be $7.5 billion, according to Mississippi’s Joint Legislative Budget Committee, allowing for an even bigger surplus than the one we already possess. If the legislature continues to follow our responsible budget and caps spending each year at $6.75 billion, the state will see a $0.8 billion surplus each year.
What do we do with the surplus?
A large portion of the approximate $0.8 billion in yearly surplus could be used to further cut the state personal income tax. The data shows we can afford to do so.
The result would be more companies organizing in Mississippi, increased individual liberty and a booming economy.
While it is good news that we have both a budget surplus and room for future tax cuts, we should not lose sight of the fact that overall our state is heavily subsidized by federal spending. Ultimately, for our state to prosper we not only use our surplus to reduce taxes. We need state leadership willing to reduce our dependence on federal handouts as well.