State Treasurer Tate Reeves Says: 'Federal Stimulus Money Allows State to Leave the Rainy Day Fund Alone'
'Revenue Outlook Will Get Worse Before It Gets Better'
(Jackson, Mississippi) - State Treasurer Tate Reeves today addressed attendees at the Stennis-Capitol Press luncheon to discuss how Mississippi's budget is faring in the current recession.
"We are in a time of tremendous economic uncertainty," said Reeves. "Although sales tax revenues were slightly down in February and personal income estimates are slightly up, my biggest concern is that corporate income tax revenues are down 71%. As small businesses earn less, pressure will be put on total employment numbers and, ultimately wages."
Year-to-date, the state of Mississippi is almost $100 million short of its revenue estimate and corporate income tax is down $51 million. The Treasurer explained that lawmakers must lower the barriers to private sector job creation efforts as quickly as possible, and he challenged them to ask this question each time they vote on a bill - "Will this decision help private businesses grow?"
Reeves explained that instead of an efficient law to jumpstart the economy with tax cuts and infrastructure spending - the policies that put people to work right away - the Federal Stimulus Package is creating even more roadblocks to job creation and building a bigger, more onerous government.
"The Governor is right to be prudent and not accept every part of the federal stimulus package," said Reeves. "We can't accept policies that require us to change state law, which in turn, could require future tax increases on small businesses. To stimulate the economy, we need tax cuts to encourage the private sector to invest."
Because of the uncertainty of the recession, Governor Barbour has previously stated that the state should use one-fourth of the Rainy Day Fund in fiscal year 2010. "Now that the Federal Stimulus package is a reality, Mississippi should not use any of the monies in the Rainy Day Fund to balance the '09 or '10 budget," Reeves added.
Treasurer Reeves made it clear that in these challenging economic times, taxes should not be raised. "The worst thing lawmakers can do in times of economic uncertainty is ask hard working Mississippi families to give more of their money to the government."
"Let's not be a state that makes short-sighted decisions that will do irreparable harm to our citizens and their job creators in the long-term. When America pulls out of this recession, Mississippi needs to be poised and ready for growth."
