(The Center Square) – A new budget recommends that Mississippi should cap its spending in fiscal year 2024 to prevent government expansion.
The Mississippi Center for Public Policy released its government spending budget recommendation and said the state should not spend more than $6.75 billion in the coming fiscal year in an effort to prevent expansion of state government while also not reducing future tax cuts.
The budget recommendation shows that with the $800 million surplus, the state can “afford to further reduce” the state’s income tax “as much as possible.” The fiscal document said the 4% expected tax reduction over time could be 3% and that the state could reduce corporate income taxes.
The Responsible Budget for Mississippi, according to the release, was penned by former White House economist Vance Ginn. The document recommends the state apply a fiscal rule that would determine how much spending should increase when considering the state’s level of spending last year and taking population growth and inflation into consideration.
“Conservatives serious about limiting the growth of government in Mississippi should not raise spending faster than inflation and population growth,” Douglas Carswell, president and chief executive officer of the Mississippi Center for Public Policy, said in a release. “To do so would be to expand the size of government and to limit the freedom for further tax cuts”.
Ginn, in the report, viewed how state spending in Mississippi grew over the past decade. Between 2014 and 2019, he found state spending grew faster than population change and inflation.
The two factors combined to grow the size of Mississippi’s government over that time period, Ginn wrote. But, since 2020, that expansion slowed and is a direct correlation to population changes and inflation.
According to the release, general fund revenue collections are topping $7.5 billion in fiscal year 2024, and with a responsible budget it would result in a surplus of $800 million.
"Our Responsible Budget suggests that much of Mississippi’s budget surplus is structural, rather than cyclical,” Carswell said in a release. “That means that provided we keep control of spending, the surplus will not simply disappear as and when the economy slows. That means that there is room for tax cuts if we keep spending under control."