MDR Commissioner says tax revenues continue to show growth

Grant McLaughlin, Mississippi Clarion Ledger
Updated ·2 min read

The Mississippi Department of Revenue has seen major increases in state general fund contributions over the past four years, MDR officials told lawmakers Tuesday.

During a Senate Finance Committee meeting Tuesday, MDR Commissioner Chris Graham told senators the agency collected and distributed a total of $10,808,857,965 to the state’s general fund, state agencies, and local governments, among others, representing a nearly $2.5 billion jump from 2019.

Graham said that rise in collections was due, in part, to a rise in sales tax, going from 3.26 billion in 2019 to just more than $4 billion in FY 2023, as well as other tax collections such corporate income tax, which collected more than $1 billion this past fiscal year.

“The revenues have continued to be strong this fiscal year,” Graham said.

Chris Graham, Commissioner of the Mississippi Department of Revenue, updates members of the Mississippi State Senate Finance Committee on his agency's progress during the 2023 fiscal year, Tuesday, Jan. 23, 2024, at the Mississippi State Capitol in Jackson, Miss.
Chris Graham, Commissioner of the Mississippi Department of Revenue, updates members of the Mississippi State Senate Finance Committee on his agency's progress during the 2023 fiscal year, Tuesday, Jan. 23, 2024, at the Mississippi State Capitol in Jackson, Miss.

MDR collects taxes from Mississippi residents, businesses and other organizations and then diverts those monies to the state general fund, other funds and state agencies, Graham said.

A few of the senators also asked Graham whether that growth in sales tax revenues would continue over the next few years, and if it could supplement losses in income tax, which will reduce from 5% to 4% over the next few years because of legislation passed in 2022.

“We’re not economists, so we haven't tried to compute what that might look like in sales tax,” Graham said. “But as you reduce income tax, theoretically, your sales tax would generate a little bit more.”

Graham later told the Clarion Ledger that despite State Economist Corey Miller telling a joint-budget committee in December that the state economy is expected to slow down in the future, he believes sales tax, as well as other funding sources could pick up some lost income tax revenues.

However, the general fund will lose $611 million in income tax revenues over the next few years because of the tax decrease, according to Graham.

Sen. Josh Harkins, R, who serves as chair of the Finance Committee, said Graham’s presentation was done to provide lawmakers with useful information as tax legislation comes to the committee.

“We want to let our new committee members hear from MDR and kind of get an idea of what some of our priorities are, see some of the things MDR oversees and the issues they handle,” Harkins said.

Harkins said information presented to the committee could be used to gauge the viability of future tax cuts.

“That tax cut is implemented over time, not in (a) foul swoop,” he said. “How that income tax rate comes down is something we watch every year and is why we get updates like this on collections. I think as you lower the income tax rate, you are giving citizens more money they can use to spend on items they need.”

Grant McLaughlin covers state government for the Clarion Ledger. He can be reached at gmclaughlin@gannett.com or 972-571-2335.

This article originally appeared on Mississippi Clarion Ledger: Mississippi income tax cuts could be supplemented by other tax funds