JACKSON – Mississippi’s economy continues to lag that of the nation and will do so for the foreseeable future, state Economist Darrin Webb told legislative leaders Thursday.
“I believe the only thing we can do for Mississippi to be more competitive is for our people to be more competitive,” Webb told members of the Legislative Budget Committee. To do that, Webb said, would take long-term efforts to improve health care, education and in some instances the culture of Mississippians.
“Mississippi’s growth will not catch the national growth” in the near term, he said. “That is not likely to happen.”
Webb, as is tradition, gives an update on the state’s economic outlook to the 14 members of the Legislative Budget Committee before they hear budget requests every September from agency heads.
Lt. Gov. Tate Reeves and other legislators lamented the low work force participation rate in the state. Webb told the legislators there were a number of factors contributing to the lowest work force participation rate in the nation and it will take a prolonged effort by policymakers to correct.
Those factors contributing to the low work force participation include the high number of Mississippians who are disabled.
“As you know, the state has struggled to gain momentum since the recession of 2008,” Webb told the legislative leaders. “It seems we take one step forward and two steps back.”
He said the state’s “real” gross domestic product, the total of everything produced in the state, is lower now than it was in 2008 before the so-called Great Recession.
Between 2009, in “the bottom of the recession” and 2016 the state economy grew 1.7 percent compared to 15.9 percent nationally and the state’s job growth was 5.3 percent compared to 11.8 nationally. He said income growth statistics are similar.
The slow growth, Webb said, is one of the primary reasons state tax collections have been sluggish in recent years, resulting in double digit budget cuts for most state agencies.
Herb Frierson, executive director of the Department of Revenue, who appeared before the legislative leaders after Webb, said, “I am optimistic about revenue being a little better than in the past. But we will know better once the first quarter is over” at the end of September.
Frierson did tell the legislative leaders that with additional funding he could hire more auditors and recoup as much as an additional $200 million in taxes owed the state, but not being paid.
“We owe it to the 90 percent of Mississippians paying” their taxes to collect the back taxes, Frierson said. “And we think the government needs it to sustain the level of government that you think we need.”