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Mississippi economy 'feeble' but slowly recovering

 

The Associated Press

 

BY EMILY WAGSTER PETTUS 

 

Associated Press 

 

JACKSON -- Mississippi's economy is slowly recovering but remains "feeble," an expert told lawmakers Thursday. 

 

House and Senate leaders said they'll keep that in mind as they write a budget over the coming months. 

 

State economist Darrin Webb said Mississippi ended 2011 on a strong note, with 3.4 percent growth in the final quarter. That was the strongest three-month period since the second quarter of 2010. 

 

"We've seen gains in employment the past three months, but as you can see the recovery has really been pretty feeble," Webb said during an economic briefing at the Capitol. 

 

Webb said he expects slow economic growth in 2012. He also said he expects the state to meet its anticipated level of revenue collections for the fiscal year that ends June 30. 

 

State Treasurer Lynn Fitch, who also spoke during the briefing, said Mississippi maintains a strong bond rating and is well below is constitutional debt limit -- two positive bits of news. 

 

"We've been very good at paying our debt," Fitch said. 

 

However, she said the state ranks higher than she'd like on two measures. In both measures, Fitch said it's best to be ranked 50th and worst to be first. 

 

n Mississippi is 16th in the amount of tax-supported debt per capita. In 2010, the most recent year available, Mississippi had $1,534 in debt per person compared to the U.S. median state debt of $1,066 per person. 

 

n Mississippi is 14th in tax-supported state debt as a percentage of personal income. In 2010, Mississippi's level was 5.1 percent, while the U.S. median level was 2.8 percent. 

 

Webb told lawmakers that Mississippi began to lose manufacturing jobs starting around 1994, after enactment of the North American Free Trade Agreement. The manufacturing job losses in the late 1990s were offset by growth in casinos that were new to the state. 

 

"Throughout entire decade through the 2000s, the economy really struggled," Webb said. "We think this has to do with our lower human capital. We have less educated people than other states, we have less healthy people than other states, we have a very high rate of unwed motherhood. We think all that plays a role in this." 

 

He said employment in Mississippi peaked in May 2000, declined through June 2004 and then improved modestly until February 2008. After that, Mississippi steadily lost jobs until February 2010; at that point, there were 76,800 fewer jobs in the state than there had been in February 2008. 

 

Job growth has been slow since then. In November 2011, there were 55,400 fewer jobs than there had been in February 2008. 

 

Webb said it could be 2014 before Mississippi returns to a pre-recession level of annual economic growth. 

 

Lt. Gov. Tate Reeves and House Speaker Philip Gunn, both Republicans and both new in their leadership jobs this year, said that because of the sluggish economy, lawmakers need to be cautious while writing a budget for the fiscal year that begins July 1. They face a May 1 deadline. 

 

"The budget negotiations this year are going to be very difficult, as we're going to be dealing with significantly less money this year than we had last year, and that's a trend that's certainly occurred over the last several years, and it looks like it's going to continue," said Reeves, who presides over the Senate. 

 

Gunn said House budget writers are going to be "very frugal." 

 

"We're going to be very careful not to overextend ourselves," Gunn said. "We have had a practice in the House over the last few years, in my opinion, of projecting expenditures greater than the amount of money that we have. We're just going to be very sure that what we put in the budget is money that we actually have, not money that we hope we have." 

 

Copyright 2012 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

 

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