State's economy going nowhere fast
Jan. 7, 2002
Tax collections in Mississippi continued to lag behind expectations in the first half of the state's fiscal year, another disappointing sign that our economy is going nowhere fast. Tax collections fell $113.4 million behind expectations from July 1 to Dec. 31, nearly 6.5 percent below an estimate set last spring.
Who sets these estimates anyway, and why can't they be more accurate?
State economist Dr. Phil Pepper, who works for the Institutions of Higher Learning, is the person most responsible for these projections, although others in his office assist. But the state's budget cycle forces him to make estimates so far in advance that they can be, practically speaking, useless.
Pepper is a skilled professional who has watched, monitored and analyzed an endless stream of economic data over a distinguished career in state government. His projections form the basis of the state budget because they give lawmakers an idea of how much money they'll have to spend in a given year.
The fact is no one really knows where the economy is headed. The state's $3 billion-plus budget is based on a guess. The irony is that some states are worse off than ours.
Even so, the political dealing has begun as lawmakers prepare to convene for the 2002 session. Appropriations Chairman Charlie Capps, D-Cleveland, one of the House's most astute representatives, sees reason for optimism in the fact that sales tax collections were less than 1 percent under expectations for the month of December.
Positive-thinkers, as we all should be, may take some consolation in using tax collection statistics from the heaviest buying season of the year, but many observers still believe cuts can be made in the state budget.
Count us among them. Positively.