Mississippi Economic Recovery Resources

Share |

INTRODUCING THE STATE OF WORKING MISSISSIPPI 2012

January 25, 2012

Many communities across Mississippi continued to experience persistently high unemployment and underemployment, stagnant wages and economic insecurity. However, the state’s workforce remains resilient and continues to be one of the state’s greatest assets. Understanding how workers, industries and families have been affected over the last decade can lay a foundation for building up the workforce in the years ahead.

MEPC’s latest report, State of Working Mississippi 2012 is a comprehensive piece that looks at key aspects of the economy affecting Mississippi’s workforce from 2000 to the present. Specifically the report:

Inspects changes in critical areas of Mississippi’s economy since 2000 including: jobs, the workforce, wages, income, and state revenue.
Compares information in these areas with trends nationally and among Mid South states.
Examines each of these areas through the lens of race, gender and educational attainment.
Summarizes key takeaways and makes recommendations in each chapter for advancing working Mississippians and their families.

SELECT FINDINGS FROM STATE OF WORKING MISSISSIPPI 2012

TWO RECESSIONS RESULT IN JOB LOSS OVER THE DECADE

In Mississippi, employment peaked in February 2008 and then steeply declined until February 2010. In total, Mississippi lost 76,800 jobs over the two-year period. Mississippi’s job losses in the 2000s appear particularly harsh when compared to the prosperity of the 1990s. Mississippi’s employment grew by almost 25% during the 1990s, in contrast to a 5.5% decline in the 2000s. The Southern region and the United States experienced similar job growth during the 1990s; however, neither the South nor the nation experienced the same level of overall decline in employment in the 2000s.

MISSISSIPPI WORKERS EXPERIENCE LITTLE CHANGE IN WAGES

Many members of the state’s workforce have not seen an improvement in their wages since 2000, as companies were hit hard by two economic downturns, and state and local budgets tightened. The inflation-adjusted median wage in Mississippi grew marginally from 2000 to 2010, from $13.13 to $13.45. The gap between men’s and women’s wages narrowed over the decade, while the wage gap between white and African American workers persisted from 2000 to 2010.

WORKFORCE ADVANCES IN EDUCATIONAL ATTAINMENT

Mississippi’s workforce advanced in educational attainment over the decade, but needs to raise skill levels further to reach national norms. In 2000, 20.8% of the workforce received a bachelor’s degree or higher compared to 22.8% in 2010. Overall 57.1% of the state’s workforce has taken at least some college classes. However, over 350,000 working-age adults still lack a high school degree, and the share of workers without high school equivalency is larger in Mississippi than in the U.S.

Over the next several days we will take a closer look at the key findings and recommendations from each chapter of the report.

Author: Sarah Welker, Policy Analyst

Comments (1)

DAY 2 OF BUDGET HEARINGS: State’s Fragile Economic Recovery is Slowing, State Economist Reports

September 21, 2011

Filed under: Budget Hearings FY 2013,FY 2013,Jobs,Mississippi Economic Recovery Resources — admin @ 7:46 AM

Tuesday at the Joint Legislative Budget Committee budget hearings, the committee heard from Dr. Darrin Webb, the State Economist from the Institutions of Higher Learning’s University Research Center.

He reported that while the state and nation are still technically in a recovery (not a recession), growth has slowed. Growth in the economy has especially deteriorated over the last six months with employment falling in four of the last five months. Prominent economic forecasting analysts say the chance that the nation will see another recession in the near future is about 40%.

While the state is seeing slight economic growth, factors such as employment numbers and the stagnation in consumer confidence are making it “feel like” we are still in a recession. In Mississippi, jobs are still down by 69,000 from the peak in February 2008.

Average growth in state GDP over the last 20 years in Mississippi, during periods of expansion, has been 2.7 percent. The growth for 2011 is expected to be a modest 0.7 percent which is below the 1.5 percent growth expected for national growth. The state is not expected to meet the state’s 20 year average until at least 2014.

Estimated State Gross Domestic Product Growth Compared to MS Average Growth

All of these economic indicators (and more) will be taken into account as the State Economist and others prepare the Revenue Estimate that will serve as the basis for the creation of a balanced state budget for FY 2013. By all accounts, FY 2013 is expected to be another lean budget year for the state as the fledgling recovery is slowing and federal stimulus funds have ended.

During the remainder of the budget hearings we will likely hear how the cuts-only approach to the state’s revenue problem has threatened vital public services. A balanced approach that includes raising new revenue is required to maintain our investments like education, public safety, and workforce development that ensure our future economic growth.

Author: Sara Miler, Senior Policy Analyst
Source: Joint Legislative Budget Committee, Revenue Discussion, presentation from Dr. Darrin Webb, State Economist, September 20, 2011.

Comments (1)

Combined Reporting would Address Corporate Income Tax Loopholes and Level the Playing Field for Local Businesses

July 8, 2011

Filed under: Budget & Tax,Income & Working Families,Making Mississippi Competitive: Solutions For Building Assets In Low-Wealth Communities,Mississippi Economic Recovery Resources,Tax Expenditures,Taxes — admin @ 8:00 AM

A news report this week brought new attention to research released earlier this year from the PEER Committee on corporate participation in the state’s corporate income tax. The research shows that approximately 80% of all corporations operating in Mississippi do not pay state corporate income tax. The PEER data also shows that 70% of the largest corporations (as measured by payroll withholding) do not pay corporate income taxes. The PEER Committee examined tax data from 2006 – 2009. The large number of corporations paying no corporate income tax is striking, especially in the years of prosperity before the recession affected corporate profits.

Corporations Operating in Mississippi Paying Zero State Income Tax 2006-2009

Corporate profits are subject to Mississippi state income taxes at the same rates and brackets as individual income taxes. The rates are 3% on the first $5,000, 4% on the next $5,000 and 5% on profits over $10,000. Possible reasons for not paying corporate income tax include operating at a loss or shifting profits to related corporations in other states. One way to end the practice of shifting Mississippi profits to other states would be to require related multi-state corporations to report their income together – a practice known as combined reporting.

Most large corporations that span multiple states are made up of a parent corporations and a number of subsidiaries. Without combined reporting, such a corporation may be able to only file income taxes for one subsidiary in the state which has transferred much of its income to the parent or other subsidiary to avoid taxation. Combined reporting requires such a company to report all of their income together from all subsidiaries in all states. Then, the share of income attributable to company’s activity in the state is calculated and the state’s corporate income tax rate is applied.

Combined reporting is not a tax raising measure. It is a measure that disallows tax avoidance methods that are not available to all taxpayers. Small businesses operating in Mississippi for the most part do not have the means to take advantage of transferring income out of state to avoid taxation. Combined reporting would level the playing field for the large multi-state corporations and local small businesses.

Author: Sara Miller, Senior Policy Analyst

Comments (0)

JUNE JOB WATCH

June 30, 2011

Filed under: Income & Working Families,Jobs,Mississippi Economic Recovery Resources — admin @ 10:19 AM

While a previous post focuses on many different measures of Mississippi’s economic growth after the recession, today’s post takes a closer look at employment in particular. Mississippi has gained 8,900 jobs since the state’s employment level reached a low point in February 2010. Incremental increases in private sector employment are a positive sign for the state’s workforce and economy. However, over the last year, slow job growth in the private sector paired with net job loss in the public sector has not produced jobs at the pace needed to replace jobs lost in the recession. The state still has 66,400 fewer jobs than it did when the recession began in late 2007.

To regain pre-recession levels of employment, Mississippi’s economy also needs to add jobs to meet the state’s population growth. The state’s population has growth 1.9% over the three and a half years. Combining jobs lost in the recession and the jobs needed to keep up with population growth means Mississippi’s would need to gain the 66,400 jobs lost in the recession and gain another 21,800 jobs keep up with the growing population, a total of 88,200 jobs according to the Economic Policy Institute.¹

The chart below illustrates Mississippi’s job deficit throughout the economic downturn.

Throughout the spring, storms and severe flooding negatively affected many communities across Mississippi and their local economies; however, rebuilding efforts should provide a lift to impacted regions. Mississippi has also benefitted from the growth of the national economy and projections are that economic growth will pick up slightly in the second half of 2011.²

Looking ahead, leaders should look to rebuild public investments in our state that declined during the recession. Strategies that build revenue and support greater investments in local communities contribute to a stronger economy and support job growth.

Author: Sarah Welker, Policy Analyst

¹Economic Policy Institute. Economic Analysis & Research Network. June JobWatch Data.
²Mississippi Institutions of Higher Learning. University Research Center. Mississippi’s Business. June 2011.

Comments (0)

Mississippi’s Economic Potential is Being Limited by Long-Standing Disparities

June 28, 2011

Filed under: Education,Making Mississippi Competitive: Solutions For Building Assets In Low-Wealth Communities,Mississippi Economic Recovery Resources,Poverty,Self-Sufficiency,Unemployment — admin @ 1:43 PM

On Sunday, June 26, The Clarion-Ledger ran a perspective piece penned by Bill Bynum, the CEO of the Hope Enterprise Corporation (the sponsoring entity of the Mississippi Economic Policy Center). The piece highlighted the changing demographics of Mississippi’s youth and the implications for future development. You can read “Capitalizing Diversity” and an additional editorial on investments needed in our region on the HOPE website.

Notably, for the first time since census records were being kept, Mississippi now has more children of color than white children. Chart 1 illustrates the breakout.

At the same time, most children of color are born into and grow up in a socio-economic environment that is vastly different from their white counterparts. Nearly one out of two African American children – the largest group of non-white children in Mississippi – lives in poverty. The chart below shows the disparities between black and white children’s poverty status in MS.

The disparities are particularly disturbing given the relationship between growing up in poverty and dropping out of school, receiving public assistance as an adult, incarceration, low-wage employment, and teen pregnancy. Also of concern, unless we act as a state to address the long standing disparities, the economic potential of the state is limited.

Moving forward, we must work together to create jobs by investing in the systems that foster employment – good schools, quality health care, smooth roads and safe communities. Policies that support entrepreneurship, homeownership and asset development also serve as important bricks on the road to prosperity.

Author: Ed Sivak, MEPC Director

Comments (0)

Tax Expenditures Part 3: How Mississippi’s Tax Expenditure Report Could Be Enhanced

May 26, 2011

Filed under: Budget & Tax,Income & Working Families,Mississippi Economic Recovery Resources,Tax Expenditures,Taxes — admin @ 6:55 AM

In the final installment in our series on Tax Expenditures we will look at how Mississippi’s Annual Tax Expenditure Report could be enhanced. In Part 1, we looked at some basics about tax expenditures, and in Part 2 we looked at how much state revenue is not realized as a result of tax expenditures

By law, Mississippi publishes a Tax Expenditure Report annually. It is prepared by the Institutions of Higher Learning Center for Policy Research and Planning. Mississippi’s tax expenditure report provides a list of tax expenditures by type and a detailed description of the tax expenditure and, in some cases, its purpose.

A recent report from the Center on Budget and Policy Priorities evaluated each state’s tax expenditure report and found that Mississippi’s report does some things w ell and that it could be enhanced by including some additional information. One area in which Mississippi’s report excels is that it attempts to capture expenditures from all of the major tax areas. Some of the areas that could benefit from the enhancements are highlighted below.

Forward estimates

Each year’s report only provides cost estimates for the current fiscal year. Estimates for future years would give lawmakers an idea of how tax expenditures, like the income tax exemption for dependents, will affect the budget in future years.

Data on services exempt from the sales tax

One set of tax expenditures that is not included in the state’s report is the exclusion of many services from the sales tax. Our sales tax law is structured so that all goods are subject to the tax unless exempt, and services are only subject to the sale tax if specifically listed. Thus, the exclusion of many services from the sales tax is not technically considered a tax expenditure for purposes of the Tax Expenditure Report. However, the exclusion of many services from the sales tax, like pet grooming and tanning, represents a loss of revenue to the state, especially as the economy largely shifts from goods to services.

The number and description of recipients and other evaluations of the tax expenditures

Inclusion of data on the number of persons and businesses that benefit from a tax expenditure and how they benefit would go a long way toward helping lawmakers and the public evaluate tax expenditures. For example, for the Jobs Tax Credit, the tax expenditure report provides an estimate of the costs ($5 million for FY 2011), but does not include the number of jobs, the types of jobs created by the credit or the number of businesses assisted. Such data are important for lawmakers and the public to see whether the tax expenditure is accomplishing the goal it was created to achieve.

Distribution of tax expenditure benefits by income level

In addition to providing information on the number of persons who benefit from a tax expenditure, some states are also able to estimate how the benefits of a tax expenditure are distributed by income group. Such analysis allows lawmakers and the public evaluate whether the tax expenditure is achieving the intended results for each income group. For example, a distributional analysis would be able to show not only how much the state’s sales tax exemption for residential utilities costs in total, but how much the exemption is benefiting persons at each income level.

Cost Estimates for More Tax Expenditures

The state’s tax expenditure report lists 27 tax expenditures for which cost estimate data is not available. While some of these expenditures are complicated and difficult to estimate, others should be available from individual and corporate tax returns. The state should not have tax expenditures for which cost data is not available to lawmakers and the public. These areas should be addressed through the planned upgrades to the Department of Revenue’s Integrated Tax Management System.

More data on tax expenditures, including an evaluation of their effectiveness and who benefits from the programs, should be included in the state’s Tax Expenditure Report. Also, laws including tax expenditures should be subject to periodic renewal or repeal to encourage such substantive review by lawmakers. These practices would make the process of state budgeting more efficient, effective and ultimately more accountable to the people of Mississippi.

Author: Sara Miller, Senior Policy Analyst

Comments (0)

Tax Expenditure Series Part 2: How Much Does Mississippi Spend on Tax Expenditures?

May 25, 2011

Filed under: Budget & Tax,Mississippi Economic Recovery Resources,Taxes — admin @ 6:26 AM

As we discussed in Part 1 of the Tax expenditure Series, tax expenditures are exceptions to the general tax code like deductions, exemptions, and credits that reduce state revenue. Like state programs, they are often enacted for a public purpose like promoting economic development or reducing the costs of caring for children. However, unlike other types of state spending, they are not subject to regular review or budget constraints.

The annual Tax Expenditure Report provides data on most of the state’s tax expenditures. The table below sums the estimates provided in the state report by tax source and lists some examples of each type of tax expenditure. It is provided here for reference only and should not be considered a comprehensive look at how much tax expenditures are costing the state. It does not include 27 tax expenditures for which insufficient data is available to provide an estimate.

Tax Expenditure Estimates by Type FY 2011

The estimates provided above total more than $2.5 billion, however total tax expenditures are likely greater. Some of the areas for which there are no data in the report include all corporate income tax deductions, installment loan tax exemptions, auto privilege tax exemptions, and a few sales tax exemptions.

By listing the tax expenditures by type in Mississippi, one should note that this post does not advocate for or against tax expenditures. The most important takeaway is that information on tax expenditures is often less transparent than information about appropriations resulting in programs that are less accountable to taxpayers.

In some cases, the state does not report on the effectiveness of expenditures that cost millions of dollars (for example, there is no public record of the number of jobs supported by the Jobs Tax Credit) or how much certain expenditures cost.

Tomorrow, we wrap up our Tax Expenditure series by focusing on how Mississippi’s report can be improved to make tax expenditures more transparent and accountable

Author: Sara Miller, Senior Policy Analyst
Source: The Annual Tax Expenditure Report, IHL Center for Policy Research and Planning, November 2010

Comments (0)

Tax Expenditure Series Part 1: What is a Tax Expenditure?

May 24, 2011

Filed under: Budget & Tax,Income & Working Families,Mississippi Economic Recovery Resources,Taxes — admin @ 6:36 AM

A new report by the Center on Budget and Policy Priorities examines the role that Tax Expenditure Reports play in the improvement of state budget accountability and evaluates state Tax Expenditure Report practices. Tax Expenditures are exceptions to the general tax code like deductions, exemptions, and credits that reduce state revenue. Like state programs, they are often enacted for a public purpose like promoting economic development or reducing the costs of caring for children. However, unlike other types of state spending, they are not subject to regular review or budget constraints.

Once enacted, tax expenditures are not subject to annual scrutiny through the appropriation process. Not only are tax expenditures not subject to regular review, they are also not limited to a total dollar amount like direct state spending. The Center on Budget of Policy Priorities report provides one example of a tax expenditure that cost a state 10,000% more than was estimated.

In order to provide some regular review and cost estimates, most states (44) compile a Tax Expenditure Report that provides data on the purpose and cost of each tax expenditure. Mississippi law requires an annual Tax Expenditure Report that is prepared by the Institutions of Higher Learning Center for Policy Research and Planning. It provides information, including some cost estimates on the state’s tax expenditures. Mississippi’s report meets many of the criteria set forth by the Center on Budget and Policy Priorities, but can still improve in many ways.

Over the course of the week, we will provide a snapshot of Mississippi’s tax expenditures and offer recommendations for how the Mississippi Tax Expenditure Report could be enhanced. Stay tuned for:

Part 2: What Tax Expenditures look like in Mississippi

Part 3: How Mississippi’s Tax Expenditure Report could be improved

Author: Sara Miller, Senior Policy Analyst

Comments (0)

Mississippi’s Economic Momentum Score Below National Average

May 20, 2011

Filed under: Budget & Tax,Income & Working Families,Mississippi Economic Recovery Resources,Taxes — admin @ 8:45 AM

State Policy Reports recently released its index of economic momentum—a ranking that takes into account three key economic factors, including personal income growth, employment growth, and population growth.

State economic activity as a whole is improving since the recession, but that growth is not occurring evenly among states. Mississippi’s economic momentum score was below the national average and ranked 35^th among states. The table below shows the components of the index and how Mississippi fared compared with the national data.

Economic Momentum Index Components

In personal income growth, the state fared slightly better than average ranking 21^st among states. However, our overall rank was brought down by lower than average employment and population growth.

The unemployment rate for Mississippi was not a part of the index, but was reported in conjunction with the data above. The state’s unemployment rate in March 2011 was 10.2%, compared with a national average of 8.8%.

In total these data show that the state’s recovery is lagging behind. Employment for families and state revenues for the services that we depend on have not recovered yet and may not fully recover for many years to come. Current employment numbers in Mississippi are still below 1996 levels.

Long-term workforce development and a balanced approach that includes raising revenues is required get us through the recovery and beyond.

Author: Sara Miller, Senior Policy Analyst
Source: State Policy Reports, Federal Funds Information for the States Vol. 29, Issue 5

Comments (1)