Thursday, May 4, 2017

MS Truth Journal: Flagging revenues are a myth.

The Mississippi Truth Journal issued the following statement on Facebook.


Overview: MS Truth Journal found that since Fiscal Year 2011, the State of Mississippi’s tax revenues have increased by over $1 billion, growing by more than 20% of projected revenues in that period of time. Most of the money is already being spent on Medicaid budget growth and Education. Below are the details.***

Here at MS Truth Journal, our goal is to shine the light of truth. We offer factual information, not opinion, and we trust Mississippians to review the facts and make their own decisions about what those facts mean. Since the adoption of the State budget at the end of the 2017 legislative session, and even before the session began, many articles have been written lamenting the State's "sluggish revenues," with the stated reason by many journalists as tax cuts passed by the Legislature in recent years. For example, way back in October the Daily Journal reported “State revenue remains sluggish.” http://djournal.com/news/state-revenue-remains-sluggish/

The sluggish narrative has continued in the press until now. One recent example picked up nationally by U.S. News and World Report was this March 25, 2017 Associated Press article https://www.usnews.com/…/mississippi-lawmakers-face-lower-r… . One paragraph in the article boldly asserted:

Mississippi is struggling with flagging revenue, a result of a slow economy and hundreds of millions in tax cuts that the GOP-led Legislature has passed since 2012. Gov. Phil Bryant has cut this year's budget by more than $170 million to offset shortfalls.

Aside from the fact that the "more than $170 million" cut is roughly 3% of the 2017 State budget, MS Truth Journal felt these bold claims were worth fact-checking. What we found was while the sluggish, flagging revenue sentiment may make for a good talking point, the facts just don't support it.
Today MS Truth Journal places in evidence a chart of detailed revenue data from FY 2011 to present: https://www.scribd.com/…/Estimated-Sine-Die-v-Actual-Genera… ; a document we've titled "Estimated Sine Die v. Actual General Fund Revenue Collection by Fiscal Year." The one page of data includes two columns for each year: 1) the end-of-session "sine die" revenue estimates, or "projections" made each year; and 2) the actual revenue collections for that same year. To the knowledge of MS Truth Journal, no other publication has ever assembled or reported this type of information to the public. But we believe in breaking the mold, so today we are providing it free of charge as a service to the people of Mississippi.

The revenue data is based on Dept. of Finance and Administration and Dept. of Revenue reports reviewed and compiled by the nonpartisan Legislative Budget Office, LBO. The level of detail is broken down in rows by the actual type of tax revenue, which may well reveal trends beyond the scope of this article. Much can be analyzed and deduced from the data, and we invite further analysis, but for now let's keep it simple. Each year the Joint Legislative Budget Committee adopts an estimate of how much tax revenue is expected to come into the State coffers for the coming year. This means that budget decisions made each year during a January-April legislative session are made based on revenue predictions for a fiscal year ending on June 30 the following year, nearly 15 months in the future.

It is noteworthy that these experts have historically done an outstanding job in "projecting" State revenues. In each year since FY 2011, the projections for "Total General Fund Collections" (see sixth row from bottom) have been on target. In fact, until FY 2016, overall the actual revenue collections exceeded projections. A review of the revenue sources for FY 2016 reveals that sales and income tax were modestly down, and not surprisingly oil and severance taxes were down sharply, while several other categories such as gaming revenue and insurance premium tax were up. Overall, for FY 2016 actual collected revenues were down by some $210 million, totaling less than 3.7 percent from anticipated revenues for that year.

But the revenue data gives more context than a one-year snapshot focused on by so many in the press. Contrary to the sluggish/flagging revenue theory, the evidence shows the State of Mississippi actually is receiving much more tax revenue today than only five or six years ago. How much? Well, the revenue chart shows from FY 2011 to FY 2015, revenue actual collections exceeded projections each year by $215.7 million on average each year. In total, from FY 2011 to FY 2015, actual revenue collections exceeded revenue projections by over a billion dollars - $1.1 billion to be exact. In other words, from FY 2011 to FY 2015, real dollar State tax collections grew by over 20 percent. Even for FY 2016, the actual collections had grown to exceed 2011 estimates by $986.8 million - hardly the sign of a "sluggish" or "flagging" economy, and certainly no negative effects of “hundreds of millions in tax cuts” since 2012. Even with the 2017 3% budget cuts, right now Mississippi has a whole lot more revenue coming in than was anticipated just a few years ago.

But these facts should cause Mississippians to ask the logical question: "Where has all that extra tax money been going?" The primary answer is Medicaid, and as evidence we refer the reader back to the pie charts of our March 22, 2017 piece "Truth on Budget Cuts, Medicaid, and Your Tax Dollars" http://yallpolitics.com/index.php/yp/post/46627 The truth is, the State of Mississippi's increased spending on Medicaid, and legislative decisions to increase spending in public education have eaten up the bulk of any new revenue - so much so, that as of the FY 2017 budget, Social Welfare including Medicaid, and All Education combined are a whopping 71.08% of the entire $5.8 billion State budget. That means 100 percent of the rest of State government - judiciary, executive, public safety, corrections, debt service, etc. must be funded on roughly 28.92% of general revenue collections, or $1.68 billion as of FY 2017.

It really is no different than if you got a 5% pay raise each year, but decided to spend the full pay raise each year on an annual health or education priority for your family. The extra income is there, it's just already being spent. If this year you had a slight 3% decrease in income, priorities have to be made.

"Flagging revenue?" "Slow economy?" "Result of hundreds of millions in tax cuts that the GOP-led Legislature has passed since 2012?" At MS Truth Journal, we know Mississippians are smart enough to read the numbers for themselves. They are smart enough to see that the "sluggish,flagging revenue" claims don't add up, with a billion dollars of new tax revenue since 2011.

-- The Editor, MS Truth Journal. “The Truth, the Whole Truth, and Nothing But the Truth”
P.S. - The final tale of FY 2017 actual collections, and the 2018 budget is yet to be told, so stay tuned to MS Truth Journal for our next report.

The Mississippi Truth Journal is published by Mississippi State Representative Andy Gipson (R-Mt. Sinai). 



33 comments:

Anonymous said...

I don't believe anything that comes out of this guy's mouth. He is part of the problem not the solution. Smite him oh Lord!

Plain ol' Catfish said...

Let me guess, the jump in revenues was an accounting error on the LBO's part or DFA?

and since we have more money than we originally thought, is the Governor and Triple Cheese Tater Thot still going to lay off all those people from mental health - whom so happen to be working Mississippians and contribute to their local economies?

Anonymous said...

Thank you Rep. Gipson for speaking the truth. Someone has to call out this BS media narrative perpetrated by the Clarion Ledger and Jackson Free Press and echoed by the other liberal editors around the state.

Anonymous said...

10:00 - other than noting your prayer, can I ask you to refute the article point by point?

Anonymous said...

You know when a publication has "truth" in the title, its BS

Anonymous said...

nobody reads anything longer than two sentences anymore. I hope he got a lot of personal satisfaction writing all of that.

it takes talent to convey a point concisely.

Anonymous said...

I've known Andy many years. You may disagree with him (I do at times), but you can trust his earnestness and his word.

Anonymous said...

Working Mississippians? Being a government worker does not entitle one to a job or to keep that job. Mental Health us so vastly overstaffed, this tearful so called situation is nothing but a good start. Yes, some folks might actually have to go find a new job. But if you read th he medua story below the headline you Wil see that many are being moved to the COMMUNITY health services, another program operated by the state. Others still being combined with programs in Whitfield rather than Newton.

Cry me a river over the state trying to live within its means and stop this growth. Dept of Mental Health will still have over 7000 employees - more than twice the size of ANY other state agency.

Anonymous said...

Its funny that he chose 2011 as the benchmark year, considering the revenues were still severely depressed by the recession, which is why there is such dramatic growth in between 2011-2013. Also remove the settlement monies, and you see the actual growth.The fact that he tries to explain the budget with one piece of paper is embarrassing. Notice the severe drop in corporate income taxes collections, while personal income tax collections rise. A good indicator are auto tags, notice they have actually shrunk since 2011.

PittPanther said...

What's the point of this press release? Does he want to cut spending on education and Medicare? Good, go for it. After all, our graduates rival those from Connecticut and Massachusettes. And our citizens are healthier than those of Colorado and Washington State. Cut away!

Anonymous said...

The state has more money now than six years ago? Wow! Things are great!
But then:
Why are the Health Dept., UMMC, and Mental Health laying off employees?
Why has the governor ordered $171 million of budget cuts this fiscal year? https://mississippitoday.org/2017/03/24/bryant-orders-fourth-mid-year-budget-cut/
Why is it that through March actual collections are $81 less than the FY 17 estimate? https://www.usnews.com/news/best-states/mississippi/articles/2017-04-06/mississippi-revenue-up-in-march-but-still-short-since-july
Why are 75 out of 82 agencies taking budget cuts in FY 18? And over half of those cuts are double digit reductions? https://www.scribd.com/document/343132752/Fiscal-Year-2018-Budget
Why does the chart referenced in the article show FY 17 sine die estimate is almost $60 million less than FY 16?
https://www.scribd.com/document/345384985/Estimated-Sine-Die-v-Actual-General-Fund-Revenue-Collections-by-Fiscal-Year#download&from_embed
Why is it that FY 18 is $329 million less than FY 17? https://mississippitoday.org/2017/03/26/legislature-starts-slicing-fy-2018-budgets/

We have more than six years ago but revenue in FY 17 is less than FY 16 and FY 18 is less than FY 17. That would seem to qualify as “sluggish”.


Anonymous said...

How much of this includes Katrina and BP monies?

Anonymous said...

To 11:30
Tell us how you know Mental Health is so vastly overstaffed? What services, people, or programs would you cut?

In FY 2016 Mental Health provided services to almost 100,000 Mississippians. I guess they were just faking, huh?

http://www.dmh.ms.gov/wp-content/uploads/2016/11/DMH-FY16-Annual-Report.pdf
See page 17

Anonymous said...

The truth train went off the tracks in the first paragraph, when he said, "We offer factual information, not opinion"

Anonymous said...

Cut it all the bone then we'll figure out what needs to be restored and to what levels.

Anonymous said...

The juxtaposition of a rag calling itself the "Truth Journal" while using 6-7 year old data to spread a narrative about other media outlets being "dishonest" is really something.

Anonymous said...

People often forget that mental health is a medical/essential service, which means it operates 24/7 365 a year.

That means you need to cover 3-shifts - A-shift, B-shift, and C-shift

It's not a 9 to 5 operation, with the weekends off.

But people assume you can run Mental Health with bankers hours.

Anonymous said...

It continues to amaze me how people or so eager and willing to display obvious and open ignorance (even anonymously) just to be anti- to everything.

Hey dumbbutts, it says since Fiscal Year 2011, the State of Mississippi’s tax revenues have increased by over $1 billion

Anonymous said...

TO: 1:16

SPOT ON - "Truth Journal" - name says it all

Burke said...

Lies, damn lies, and statistics.

Anonymous said...

2:35, I read the article and looked over the tables. Is the Troof Journal making the argument that human capital investment should be cut, that the state's finances are actually fine, or that every media outlet is lying to the public? If the state is raking in a billion dollars in revenue over a 7 year period, what has happened to job growth over that time? Also, the year 2013 should be the baseline for Gipson's statistics, not 2010/11.

Excellent points, 11:35. Along with car tags, we should be looking at new home purchases as well.

Anonymous said...

Mental Health has been a 24/7/365 since forever. But the growth in employees from 2,200 to 9,000 has only been in this century. Over one third of all state employees are employed by DMH, an agency who's oversight is one conducted by its beneficiary group.

For those that don't like using 2011 as a baseline because of "coming out of the recession" go back and take 2010, or 2007, or you want to go before Katrina go to 2004. In '04, the budget was right at $4 billion. It is now $6 billion. I don't believe that anyone reading this blog today can claim that their personal annual income has increased by 50% during that time.

No matter where the money came from (which is easily determined) the fact is that it is being spent. Reducing the growth amount by single digit percentage points should not cause all this agony, except of course if you are one of those state employees or one receiving the benefits of the state programs.

And for those that like to pick at the details, corporate income taxes continue to decline because more and more businesses are choosing to use the LLC form of organization, causing the income to be taxed as individual taxes, not corporate. Factor that in to your calculation as you compare the sources.

The point is that government is not being starved. It is receiving many more dollars over the past few years than it did less than a decade ago, and the agencies have grown to fit the available dollars. Cutting back the sources and cutting back the expenditures is not a bad thing.

Anonymous said...

Thank you paid politician lackey at 8:07. Our tax dollars at work.

Anonymous said...

Thank you paid politician lackey at 8:07. Our tax dollars at work.

Noted that you are unable to refute.

Anonymous said...

"All the media folk lied about the economy. Everything is fine here."
"Mississippi's the only state in the southeast (the fastest-growing region in the country) to see its population decrease over the last two years? All the folks who left were gay and libtards. We don't need them."
"With a nearly a billion in revenue added to the state's economy since 2011, jobs are in abundance. People are lazy here and just don't want to work. Also, the Census is making us look bad."
"Tax cuts aren't hurting our state's sound finances. That's why all those Fortune 500 companies we've given tax breaks have all moved their home offices here. And who wouldn't pass up a chance to give someone a $126 million tax break to write off unused inventories? That's gonna pay off soon--just like our subsidized shopping centers. Just y'all wait."

See? When you look at it that way things are gonna be okay, you guys.

Anonymous said...

Say what you want about the numbers. The fact is this points out that the state, like the federal government, has a spending problem, not a revenue problem. Using one time funds such as money received from Tobacco, BP and Katrina to fund things is part of what created the problem for the state. Now the chickens come home to roost.

Anonymous said...

Thank you paid politician lackey at 8:07. Our tax dollars at work.

Noted that you are unable to refute.

May 4, 2017 at 8:52 PM

And, noted that you did not refute either.

Anonymous said...

I can refute most of the argument with the following:

Google News for the 2015-2016 Fiscal Year

If Sine Die estimates matched revenue, then there would not be any need for cuts.

Show me a spreadsheet all day long, that's great. But please, take a moment, and explain how we can cut the general fund... borrow against the rainy day... and still come out millions of dollars ahead. Your 'truth' seems to lack 'reality'.

Anonymous said...

i just love it when yall fight

Anonymous said...

Lackey says we should let the counties decide whether the budget is growing or shrinking.

Anonymous said...

Ok Andy get your notepad out. Mark this lesson, "stuff I need to understand before I talk about and admit what actually shoots me in the foot". So this guy doesn't like the state has no money and we've got to cut the budget so he starts up about how much money the state has coming in. Hey smart guy, don't you realize you've just admitted this leadership of clowns has got all this extra money and this thing is still a mess. I really never believed that once you guys started running things that the state would be worse off but heaven's, it is. Congratualations, you and your crowd are worse than the D's.

Anonymous said...

10:29pm

You need to take some all that extra money being paid for education in this state and apply it to reading comprehension.

This article, in no way, suggested that the writer "doesn't like the state has no money." It is refuting that very fact.

He succinctly states that MS has record income, well above what was projected. And he states that 70% of the income is paid out to Medicaid and Education.

If you have paid any attention, you would know that the Medicaid budget doubled (as a percentage of the state budget) when Obamacare was enacted.

This article points out that the media is complicit in the misinformation and obfuscation. The tax cuts did not hurt the state. In fact, the state has received more tax revenue than projected.

Anonymous said...

Ok Andy, oops I mean 9:30, whatever you say.



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