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Cyber Monday Not a Good Deal for State Revenue

November 28, 2011

Filed under: Uncategorized — Tags: Cyber Monday, State Revenue — admin @ 9:00 AM

Today is Cyber Monday, a day in which online retailers offer discounts to holiday shoppers. It began as online retailers observed significant increases in sales on the Monday after Thanksgiving. According to comScore, last year’s cyber Monday sales reached over $1 billion dollars and were up 16% over the previous year.

Cyber Monday also holds significance for the state budget. Why?

While some internet retailers remit sales tax to the state of Mississippi, they are not required to collect sales taxes. Federal tax law does not require an out of state retailer (whether online or mail-order) to collect sales tax unless it has a physical presence in the state. If Mississippians make purchases online and the retailer does not collect the sales tax, the state loses revenue that could have been used for the education of children, to keep college affordable or to create healthy families.

Does that mean that taxes are not owed on the items purchased? No.

If sales taxes are not collected on any item purchased via the internet or mail order, the consumer owes a use tax on that item equal to what the sales tax would have been if it were purchased at a “brick and mortar” store. Use taxes may be paid by filing with the Mississippi Department of Revenue.

Rising internet sales are a potential threat to the adequacy of Mississippi’s system of collecting revenue – a system that relies heavily on the sales tax. This growing imbalance also creates a playing field that is not level among local small businesses and out of state retailers. If out of state retailers can offer products similar to products sold by local businesses for lower prices because of the absence of a requirement to collect a use tax, then local businesses could be affected by the drop in demand for their goods.

Many states are looking at ways to take action to require online vendors to collect sales tax.

More information on internet sales and the sales tax will be available in MEPC’s upcoming report on threats to state revenue.

Author Sara Miller, Senior Policy Ananlyst

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Food Assistance Programs Provide Meals For Many Mississippi Families This Holiday Season

November 23, 2011

Filed under: Food Insecurity,SNAP — Tags: Federal Poverty Line, food insecure, Food Stamps, Fresh Food Finance, Fresh Food Retailers, Gross Domestic Product (GDP), nutrition assistance, SNAP — admin @ 9:07 AM

Earlier this week, we looked at the importance of SNAP, formerly Food Stamps, in lifting family incomes above the poverty level. And while SNAP supports low-income families in acquiring sufficient meals, many families in poverty will still struggle over the course of a year to consistently provide adequate, healthy meals for their household. In fact, 19.4 percent of Mississippi’s households were food insecure in 2010.¹

If a household is food secure, all members of the household have access to enough food for an active, healthy life throughout the year. In 2010, 80.6 percent of Mississippi households were food secure throughout the year. The remaining 19.4 percent were food insecure. Texas, Arkansas and Alabama all experienced rates of food insecurity that were above the national rate of 14.5 percent.

The USDA’s annual report on household food security found that “rates of food insecurity were substantially higher than the national average for households with incomes near or below the Federal Poverty Line, households with children headed by single women or single men, and Black and Hispanic households.”

SNAP ENROLLMENT IN MISSISSIPPI

The number of Mississippi families that rely on SNAP to buy groceries continues to rise in the state. In September 2011, 642,476 Mississippians received some level of allocation through the national SNAP program for nutrition assistance- up by 40,990 recipients since last September. SNAP remains a critical program for 1 in 5 residents and is particularly critical for families with children.

Spending through SNAP substantially benefits Mississippi’s economy. For every $1 in increased spending SNAP benefits, real Gross Domestic Product (GDP), a measure of the nation’s economy, increases by $1.73. Last month alone $79 million worth of food were purchased from food retailers in Mississippi through SNAP. As the state with the largest portion of residents in need of the program, any national decisions to limit funding for SNAP will impact the state’s residents and food retailers more drastically than other areas across the country

ACCESS TO HEALTHY FOODS

Ensuring children and families can afford and access nutritious meals often requires programs like SNAP to be buttressed with efforts taking place on a regional and local level. For example, many communities across the Mid-South experience barriers to accessing a quality grocery store near their neighborhood.

Efforts like the Fresh Food Retailers Initiative expand access to quality produce and foods in underserved communities. The initiative provides financing for the food retail infrastructure, increasing grocery stores that sell healthy foods. HOPE Enterprise Corporation participates in the initiative and is providing financing in underserved communities in Louisiana’s Orleans Parish. Strengthening investments in efforts like Fresh Food Finance can help build the number of families that have the opportunity to access quality foods regardless of the community in which they live.

As family and friends gather for the Thanksgiving holiday, many Mississippians also take the opportunity to make donations to those that need support to provide nutritious meals for their families. While that support is invaluable to many families, public programs like SNAP, WIC and The Emergency Food Assistance Program are equally critical for meeting family needs and should be protected.

Author: Sarah Welker, Policy Analyst
¹U.S. Department of Agriculture. Household Food Security in the United States in 2010.

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New Poverty Measure Shows Public Programs Reduce the Number of Americans Living in Poverty

November 21, 2011

Filed under: Poverty — Tags: Earned Income Tax Credit, EITC, Federal Poverty Level, Food Stamps, Mississippi, Poverty, Revenue Options, SNAP — admin @ 10:22 AM

While a recent article focuses on the impact of poverty on the lives of individuals here in Mississippi, the Federal Poverty Level is a measure of economic well-being that reaches across America.

This month, the Census Bureau released a new Supplemental Poverty Measure that is intended to better incorporate the expenses and benefits individuals encounter in today’s economy. While the supplemental measure will not replace the official Federal Poverty Level, it does provide valuable insights about programs and expenses that affect families in extreme financial hardship.

The new supplemental measure shows a slightly lower poverty rate in the south last year- 16.3 percent under the new measure compared to 17 percent under the official poverty level. The south’s poverty rate under the new measure was not statistically different from the nation’s poverty rate. The West and Northeast both had upticks in poverty using the new measure.

To determine a family’s poverty status, the new measure takes a family’s income and subtracts the cost of necessary expenses related to work, out of pocket medical expenses and child care. In addition, the measure adds in-kind benefits to a family’s income like tax credits, nutrition assistance and school lunch.

THE NEW POVERTY MEASURE, EITC & SNAP

The new measure demonstrates that SNAP (previously Food Stamps) and the Earned Income Tax Credit both helped substantially reduce the number of Americans living in poverty in 2010. The U.S. Census Bureau found that without the Earned Income Tax Credit, poverty levels would have reached 18% in 2010 compared to the actual rate of 16%. In the absence of SNAP, poverty levels would have risen to 17.7%. The chart below shows these differences and underscores the importance of both programs in insulating families from poverty.

On the national level, decisions made over the next few months will substantially impact funds available for many critical programs including SNAP/Food Stamps and the Earned Income Tax Credit. Both initiatives have been demonstrated to lift families out of poverty and need to be preserved.

More broadly, Mississippi and U.S. leaders are making important decisions about funding public programs and structures that impact economic opportunity for the state’s residents. The risk of continued cuts to key programs that are proven to support Mississippi’s working poor families necessitates a balanced approach that includes raising revenue.

See more from the Census Bureau’s presentation on the Supplemental Poverty Measure here.

Author: Sarah Welker, Policy Analyst

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Revenue Estimate for FY 2013 Released, Another Tight Budget Year Forecast

November 17, 2011

Filed under: Balanced Approach,Budget & Tax,General Fund Revenue,Revenue — Tags: Balanced Approach, Budget & Tax, General Fund Revenue, Revenue — admin @ 1:37 PM

This week, Dr. Darrin Webb presented the State General Fund Revenue Estimates for FY 2012 and 2013 to the Joint Legislative Budget Committee. Webb also provided a brief review of the economic considerations underlying these estimates.

Neither the State nor the Nation has fully recovered from the recession ending in June 2009. In Mississippi, economic growth is nearly at a standstill. Employment for the first nine months of 2011 was only 0.6 percent above the 2010 level. After adjusting for inflation, income tax withholdings were essentially flat compared with last year’s level.

Dr. Webb also noted that current events in Europe could easily result in a national recession before the fiscal year ends. Closer to home, Mississippi’s slow growth makes the risk of recession substantial.

In spite of the bleak economic forecast, estimated general fund revenue for FY 2012 (the current fiscal year) was adjusted upward by $60,000,000 from the last estimate provided at the end of the 2011 legislative session. FY 2013 revenue is projected to be slightly higher than current year revenue. However, revenues are still projected to be $244 million lower than FY 2008 general fund revenue.

Mississippi General Fund Revenue Actual and Estimates FY 2008 through FY 2013

Lawmakers have responded to the diminishing revenue with year after year of budget cuts to vital public services. The cuts only approach to the state’s revenue problem has meant, among other things, fewer teachers, decreased access to mental health programs, and tuition increases at state universities.

A balanced approach that includes updating the state’s revenue systems is necessary to fund the public structures that provide the foundation for creating jobs and building a strong economy. Employers and workers alike need quality and accessible K-12 and higher education systems, strong infrastructure, and safe communities in order to prosper.

Co-authored by:
Francinia D. McKeithan, Policy Analyst/ SFAI Policy Fellow
and Sara Miller, Senior Policy Analyst
Source: Mississippi Revenue Estimating Committee

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From the 2011 Policy Link Equity Summit: Equity is the Superior Growth Model

November 15, 2011

Filed under: 2011 Equity Summit,65 and Older,Census Data,Change in Mississippi,Demographics,Race — admin @ 7:01 AM

Last week, I attended the Policy Link Equity Summit and came home both with some of our approaches affirmed and some new thought provoking concepts. In August, I blogged about some of the changing demographics in Mississippi and lifted up the evolution that there are now more children of color in Mississippi than there are white children. At the same, time, the two sets of children start life from two very different starting places when one considers child poverty rates by race.

Another interesting way to analyze the shifting demographics that were shared at the conference includes looking at generational differences by race. The chart below illustrates the generation gap among the races in Mississippi.

What is noteworthy about the chart is that there is essentially a difference of an entire generation between the median age of people of color and the median age of whites in Mississippi.

In a report released at the conference, “America’s Tomorrow: Equity is the Superior Growth Model,” the authors state that “today’s elders and decision makers do not see themselves reflected in the faces of the next generation.” One result of the demographic shift is less investment in things like infrastructure and education. In fact, a state by state comparison revealed that states with the largest generation gap by race have the lowest per pupil public school expenditures.

The chart illustrates Mississippi’s racial generation gap. As new elected leadership moves into office, it is imperative that we all work together to create an environment that debunks the findings of the report. Mississippi has the opportunity to demonstrate to the nation that there is another way. To do so, we will need to work together to make and preserve investments in early childhood education, in K-12 education, in the community colleges, in our four year universities, in our health care system and in our roads and bridges.

Regardless of color, Mississippi’s future, our future, hinges on our ability and willingness to give all of Mississippi’s children the advantage of investments in the public structures that lead to advancement, opportunity and growth.

Author : Ed Sivak, MEPC Director
Source: U.S. Census American Community Survey 2008-2010 Estimates

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November Job Watch

November 4, 2011

Filed under: Jobs,November Job Watch,Unemployment — admin @ 2:43 PM

The November jobs report from the Department of Labor revealed that the United States added 80,000 in October. National unemployment slightly decreased from 9.1 to 9.0%. The number of jobs added is a positive sign, but also slightly less than the 158,000 added in September.

Mississippi’s unemployment rate rose from August to September to10.6%.The state’s unemployment rate remains well above the national rate of 9.1% in September. The rise in Mississippi’s rate means that 1 in 10 Mississippi workers continue to be unemployed and looking for work.

Unemployment rates continue to be higher than this time last year, but Mississippi did add jobs in September after employment fell the previous two months. As the graphic below shows, Mississippi continues to be over 60,000 jobs below the employment peak in February 2008. And projections indicate that, in the absence of intervention, it could be 2016 before the state regains pre-recession employment.

As jobs are added and working adults find employment after a period of job loss, low-wage jobs without benefits are often not enough for true economic security. As seen from last week’s release of the Basic Economic Security Tables, a single worker in Mississippi needs $26,664 per year to cover basic expenses and save for emergencies and retirement. However, if that individual does not receive employment-based benefits like unemployment insurance, health insurance and retirement, the amount one worker needs rises to $31,416.

As the election nears, the state’s leaders face the challenge of building up the state’s economy and creating jobs for the thousands of families that still face economic insecurity because of periods of unemployment. Creating jobs that have pathways to economic security should be a priority, so many of Mississippi’s working families can advance beyond living pay check to pay check and can save for long-term security.

Author: Sarah Welker, Policy Analyst
Sources: Economic Policy Institute. Job Watch. Mississippi Department of Employment Security Labor Market Information.

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What Can Data Do?

November 1, 2011

Filed under: Childhood Advisory Council,College,Data System,Department of Education,Department of Human Services,Education,Income & Working Families,Institutions of Higher Learning,Longitudinal Data System,State Board for Community and Junior Colleges,Training,Workforce — admin @ 8:56 AM

A recent MEPC post raises concerns that the state’s future economic prosperity may be limited by persistently disparate outcomes between residents by poverty status and race. Moving towards many of the goals outlined in the post –job creation, quality schools and strong post-secondary and workforce training- will require more in-depth knowledge of how our education systems connect and support students of all ages.

In an effort to build that knowledge, the state recently passed legislation that will eventually provide the state’s leaders and policymakers with data on student and workforce outcomes across all education systems- elementary school to employment. Through the recently passed Mississippi State Longitudinal Data System, Mississippi will now begin to build the capacity to link information together from key state entities and eventually make data driven decisions for investment in policies and programs that move the state forward.

The figure below shows the agencies that will potentially be included in the new state system:

In particular, the recent authorization could develop a system that provides a resource for looking at the wage and employment outcomes of adults that exit training programs across the state. The system can also help determine which programs are successfully preparing low-income, low-skill adults to move into jobs with advancement opportunities and higher wages.

Using the SLDS gives leaders a resource for strengthening the state’s education and training, so more adults are equipped with the skills they need to open the doors to higher wage employment. Opening these doors remains a key avenue for increasing the economic security of families and one solution for closing income and educational disparities across the state.

Want to learn more?

Read more on the State Workforce Investment Board’s goals for the State Longitudinal Data System.
Read more on how data systems can be used to strengthen Mississippi’s education and training systems.
Read the SLDS legislation passed by Mississippi during the last legislative session.

Author: Sarah Welker, Policy Analyst

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