Where are your tax dollars going?

By Shad White

“We certainly pay a lot in taxes, Shad, and I hope all that money is being spent well!” is something I hear all the time as State Auditor. It’s an important point. You work hard for your income. You want to be sure it’s spent wisely. 

With our state beginning a new fiscal year on July 1, it is a good time to review 2019, look at the revenue our state brought in, and provide an answer to that question—how does your state government spend your tax dollars? 

First, let’s look at revenue: in 2019, Mississippi brought in $16,881,667,000.00—almost $17 billion. This number comes from a variety of different taxes, fees, licenses, and also the federal government. For example, the Mississippi sales tax and the state income tax dollars combine for a total of nearly $5.5 billion. Another massive chunk of this money, over $7.5 billion, comes from the federal government to assist us with running certain federal programs. 

That’s a lot of money, and I’m sure you wonder how that one “big pot” gets to places where it can actually benefit me and my family. 

After the revenue is calculated, money is appropriated by the legislature to state agencies, commissions, programs, and other state entities. The lion’s share of that money goes to just five agencies: The Mississippi Division of Medicaid, the Mississippi Department of Education, the Institutions of Higher Learning (our universities), the Department of Human Services, and the Department of Transportation. Those five agencies alone account for 75% of the entire budget.

To be more specific, a good bit of our money goes to three purposes: health and social services, education, and debt service. These all require big-dollar appropriations and affect almost every single Mississippian in one way or another, so I believe they deserve a little closer inspection.

Of those purposes, Mississippi spends far and away the most money each year on health and social services—over $7.7 billion. That’s about 46% of the state’s entire revenue stream. The Division of Medicaid spends nearly $5.9 billion of that money. Medicaid is intended to provide health coverage to over 750,000 low-income Mississippians. A small portion of the Medicaid money comes from state revenue, about 25%, while the rest is covered by the federal government. 

For social services, the Department of Human Services (DHS) also spent a considerable amount, nearly $1.2 billion. DHS oversees early childhood care and development programs as well as several welfare programs like the Supplemental Nutrition Assistance Program (SNAP) and the Temporary Assistance for Needy Families (TANF) program. 

Of the nearly $17 billion in state and federal revenue, $3.6 billion, or twenty-one percent, was spent on education. Included in that number is the funding for the often-discussed Mississippi Adequate Education Program (MAEP), which goes to the K-12 school system and accounted for roughly $2.2 billion of that $3.5 billion. 

Lastly, Mississippi is required to pay every year a percentage of the state’s debt. We must use state dollars, not federal dollars, to pay that bill. In 2019, that amount came out to roughly $585 million, or about seven percent of our state tax revenue.

My view is that, as taxpayers, you shouldn’t have to jump through multiple hoops to find out where your taxes are being spent. As State Auditor, my job, first and foremost, is to ensure that your money is not used fraudulently. But, I also believe that I can help shed light on where the legislature has spent your money. Transparency, after all, is a great tool to prevent fraud in the first place. When taxpayers know how their money should, under the law, be spent, they can help us in the Auditor’s office spot places where that money is being stolen. DBJ

Shad White is the 42nd State Auditor of Mississippi.