Mississippi’s government spending (general fund appropriations) for the fiscal year 2024 should be no higher than $6.75 billion, according to a new budget report published today.
Any spending increased over and above $6.75 billion would expand the size of government in our state and reduce the scope of future tax cuts.
The Responsible Budget for Mississippi, authored by former White House economist, Vance Ginn Ph.D., applies a simple fiscal rule to determine how much spending should increase:
a) The level of spending (general fund appropriations) in 2023, plus
b) The rate of population growth and inflation.
“Conservatives serious about limiting the growth of government in Mississippi should not raise spending faster than inflation and population growth,” said Douglas Carswell, President & CEO. “To do so would be to expand the size of government and to limit the freedom for further tax cuts”.
When preparing the Responsible Budget, Ginn looked at how Mississippi government spending had grown over the past decade. He found that between 2014 and 2019, state government spending grew faster than population change plus inflation, meaning that the relative size of the state government in Mississippi increased. More encouragingly, however, since 2020 the expansion of the state government in Mississippi has slowed relative to inflation and population changes.
With projected general fund revenue collections of $7.5 billion for the FY 2024, a Responsible Mississippi Budget would result in an estimated surplus of $0.8 billion.
"Our Responsible Budget suggests that much of Mississippi’s budget surplus is structural, rather than cyclical. That means that provided we keep control of spending, the surplus will not simply disappear as and when the economy slows," Carswell said. "That means that there is room for tax cuts if we keep spending under control."
With a potential $0.8 billion surplus, Mississippi can afford to further reduce the state’s personal income tax rate as much as possible (e.g., from 4 percent as expected over time from recent tax cuts to 3 percent). The state could also reduce corporate income taxes.
A link to the Responsible Budget can be found here.