The economic shutdown and related stay at home orders to slow the spread of the coronavirus pandemic will impact the budgets of every city in Mississippi, as sales and gaming taxes are often a big chunk of tax revenues.
According to analysis of data by the Mississippi Center for Public Policy, Tunica will likely feel the effects the most from the revenue downturn, as 84 percent of the revenue in the small city in north Mississippi comes from gaming.
Among the cities without gaming, Tupelo’s budget will take the biggest hit since the sales tax accounts for nearly 60 percent of its tax revenues.
Last year, the Department of Revenue transferred $448 million in sales tax revenues to cities and $87 million in gaming fees and taxes to municipalities and counties with casinos. Any reduction in those revenues, even for a month, could put municipal budgets in a serious squeeze.
Four other cities with casinos —Biloxi, D’Iberville, Greenville, Gulfport, Vicksburg and Natchez — will feel the effects of the casino closures to varying degrees.
Casinos in Mississippi were closed on March 16 by the order of the Mississippi Gaming Commission, which regulates the state’s casino industry.
According to data from the state auditor’s office, Tunica had $2.4 million in total revenues in 2018 (the latest data available), with only $402,462 coming from sales tax (16.75 percent) and the majority (more than $2 million) from gaming revenues.
Biloxi received about 32 percent of its tax revenues from gaming, while 21.65 percent came from sales tax receipts. Vicksburg received about 22 percent of its revenues from gaming fees and taxes, while the sales tax accounted for 36 percent of the city’s revenue.
For those cities without casino gaming, the COVID-19 economic shutdown will hit Tupelo hardest as 58 percent of its tax revenues came from the sales tax. Businesses considered non-essential, such as most clothing stores, were shut down earlier than most in the state by the city.
Hattiesburg will also be hit hard by the shutdown, as 48 percent of its tax proceeds came from sales tax. Pearl will also be severely affected, as 46 percent of its revenues come from sales tax receipts.
Mississippi levies a 7 percent sales tax statewide and 18 percent of those proceeds are sent by the state Department of Revenue back to the municipality where the sale was performed.
Cities that are more dependent on property tax revenues, such as Southaven (more than 60 percent of total tax revenues) and Jackson (47 percent), will weather the economic storm in much better shape.
The longer the shutdown continues, the worse it will be, both for state revenues and cities. A study from the Mercatus Center at George Mason University estimates that real growth in the U.S. gross domestic product will decline 5 percent for each month of partial economic shutdown.
|City||Total||Sales||% of total||Property||% of total||Gaming||% of total|
|Jackson||$ 132,222,944||$ 28,348,681||21.44%||$ 62,492,546||47.26%||$ –||0.00%|
|Gulfport||$ 109,870,709||$ 22,960,000||20.90%||$ 25,200,000||22.94%||$ 4,117,335||3.75%|
|Southaven||$ 43,751,332||$ 14,846,481||33.93%||$ 26,520,649||60.62%||$ –||0.00%|
|Hattiesburg||$ 49,154,030||$ 22,685,867||46.15%||$ 17,000,696||34.59%||$ –||0.00%|
|Biloxi||$ 57,976,511||$ 12,550,000||21.65%||$ 10,523,353||18.15%||$ 18,750,000||32.34%|
|Meridian||$ 35,471,000||$ 13,975,000||39.40%||$ 15,499,000||43.69%||$ –||0.00%|
|Tupelo||$ 49,916,511||$ 29,064,458||58.23%||$ 15,986,808||32.03%||$ –||0.00%|
|Greenville||$ 26,227,926||$ 6,900,460||26.31%||$ 12,588,175||48.00%||$ 1,030,217||3.93%|
|Olive Branch||$ 33,164,063||$ 10,695,432||32.25%||$ 18,442,970||55.61%||$ –||0.00%|
|Horn Lake||$ 15,216,481||$ 4,829,511||31.74%||$ 7,289,946||47.91%||$ –||0.00%|
|Clinton||$ 17,755,858||$ 4,812,181||27.10%||$ 9,626,065||54.21%||$ –||0.00%|
|Pearl||$ 22,315,325||$ 9,791,689||43.88%||$ 6,910,003||30.97%||$ –||0.00%|
Data from city websites and the Office of State Auditor’s reports.