State Fiscal Briefs

November 2021

Looking for Mississippi data related to the pandemic? We have health, economic, and fiscal data on our new tool, How the COVID-19 Pandemic is Transforming State Budgets.

Mississippi’s budget basics

According to the National Association of State Budget Officers (NASBO), Mississippi’s total expenditures in fiscal year (FY) 2020 were $21.7 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2020 were $2.3 trillion, ranging from $4.7 billion in Wyoming to $337.7 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Mississippi’s combined state and local direct general expenditures were $26.1 billion in FY 2018 (the most recent year census data were available), or $8,768 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $9,801.

Mississippi’s largest spending areas per capita were public welfare ($2,110) and elementary and secondary education ($1,549). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Mississippi’s combined state and local general revenues were $27.0 billion in FY 2018, or $9,056 per capita. National per capita general revenues were $10,071. Mississippi uses all major state and local taxes. After federal transfers, Mississippi’s largest sources of per capita revenue were charges ($2,034), such as state university tuition and highway tolls, and general sales taxes ($1,193).

Mississippi’s politics

Governor Tate Reeves, a Republican, was elected in 2019 with 52 percent of the vote. The next gubernatorial election is in 2023.

Republicans control both the House of Representatives (75 Republicans to 46 Democrats and 1 independent) and Senate (36 Republicans to 16 Democrats). Control of the governor’s mansion and each house of the legislature gives Republicans a trifecta in Mississippi. The entire legislature is up for election in 2023 because both representatives and senators serve four-year terms.

Mississippi’s budget institutions, rules, and constraints

Mississippi uses an annual budget. The legislature must pass a balanced budget and is prohibited from carrying a deficit over into the following year. Mississippi further limits both spending and revenue growth with binding rules that require a legislative supermajority or vote of the people to override. A three-fifths supermajority is also required for legislation that raises taxes or revenue. The state also limits total authorized debt incurred by the state.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Mississippi’s recent fiscal debates

  • In 2018, Mississippi approved a state lottery. At the time, Mississippi was one of only six states without a lottery. The legislation did not have a fiscal note, but supporters claimed the lottery would raise $40 to $80 million annually. Although Mississippi was one of the last states to approve lottery gambling, it was one of the first states to accept legal sports betting. In 2017, the legislature passed legislation meant to regulate fantasy sports games, but the language used was so broad that when the Supreme Court allowed sports betting, the state’s casinos were able to create legal sports books. The state collected only a few million dollars in its first year of legal sports betting.
  • In 2016, Mississippi passed what a local paper described as the largest tax cut in state history. The legislation phases out Mississippi’s franchise tax, a tax on a corporation’s value of capital employed or assessed property values in the state, until the tax is eliminated in 2028; it also increased the amount of income exempt from the state’s individual income tax. The legislation did not have a fiscal note, but Mississippi collected $260 million a year from the franchise tax before the phase-out began.
  • Mississippi is one of 14 states that have not accepted federal funds to expand Medicaid eligibility under the Affordable Care Act. The Urban Institute estimates that if Mississippi had accepted Medicaid expansion, it would have received 29.6 percent more federal Medicaid funds ($1.3 billion) and increased its state spending on Medicaid 6.5 percent ($93 million). As with other states, Urban estimates that savings from Medicaid expansion (e.g., lower spending on uncompensated care) would fully or largely offset the additional direct state spending. Governor Reeves opposed all versions of Medicaid expansion during the 2019 campaign.

Mississippi’s current budget

Governor Reeves released his FY 2021 budget proposal in January 2020. The governor proposed $6.4 billion in state spending, a 2 percent increase over FY 2020.

Mississippi enacted its FY 2021 budget in August 2020. The enacted budget totaled $6.3 billion in state spending, slightly below what the governor proposed and a 1.3 percent decrease from enacted FY 2020 spending. Most state agencies, including K–12 education, saw budget cuts.

Governor Reeves released his FY 2022 budget in November 2020 and gave his State of the State address in January 2021. The governor’s proposed state spending was $6.2 billion, or about 1 percent less than enacted FY 2021 spending and 3 percent lower than what the governor proposed for that fiscal year before the pandemic. Governor Reeve’s top priority in the budget is eliminating the state’s income tax by lowering the state’s tax rates annually until the entire tax is gone in 2030. Eliminating one tax bracket would cost roughly $300 million a year; fully eliminating the tax would reduce annual tax revenue by nearly $2 billion. Legislators on the Budget Committee also put out a FY 2022 budget plan in December 2020. The legislators’ plan does not eliminate the income tax (though some Republican legislators say they are open to the idea), but it proposes slightly less spending ($6.1 billion) than the governor’s.

For more on Mississippi’s budget, see