Mississippi Republicans who are determined to eliminate the state income tax are not thinking far enough outside the box. The guidepost for fiscal creativity is coming from the Mississippi Lottery Corp., which collected millions of dollars from people who were eager to pay it.
The lottery people sent out a press release Tuesday. In its first full fiscal year of operation that ended June 30, lotteries, scratch-off tickets and draw-style games totalled $510 million in sales. This in turn produced nearly $139 million for the state treasury, with $80 million going to highways and the remaining $59 million for education.
That’s a pretty hefty haul for any operation’s first year — even one that admittedly takes advantage of its customers’ weaknesses and willingness to spend money on the infinitely small possibility of winning a life-changing fortune.
The lottery press release attributed its sizable contribution to the state treasury to new draw-style games, several high jackpots and “an expanding array of scratch-off tickets.” All true, but a key role in this spending had to be the multiple federal stimulus payments that most people received during the past 15 months.
Let’s face it: When the government drops a $2,000 check on the doorstep, the first place that a certain percentage of people are going is to the convenience store for some Powerball tickets or scratch-off cards.
Taxes from the lottery games aren’t anywhere close to the jaw-dropping revenue produced by Mississippi casinos in the 1990s. But it’s a good start. While it may take a couple of years before we know exactly how much the stimulus payments boosted the 2021 lottery revenue, the sales data clearly indicates that — no surprise — a lot of people enjoy the games.
Which leads to another revenue idea offered somewhat in jest, but also with the knowledge that casinos, sports betting and now lotteries have a proven market in Mississippi.
Many Republican leaders are adamant that Mississippi should phase out its income tax as part of an effort to attract residents and jobs, the way Texas, Florida and Tennessee have successfully done. This bad case of Texas Envy could be modified to apply successful lottery principles for the benefit of the people who pay the taxes. The idea is to make them more willing participants in tax revenue generation instead of grumbling about it every year.
The state Department of Revenue, given permission by the Legislature, could offer “income tax lotteries” for people who pay on time and in full, with winners getting a total refund, an income tax holiday the following year, a large cash prize or just about any other prize imaginable. The rewards the state could offer are only limited by creativity.
Maybe this sounds silly, especially to those determined to get rid of the state income tax. Well, some people who pay attention to state finances think the idea of eliminating Mississippi’s single-biggest tax revenue producer is silly, too. The point is that we do have options.
