Mississippi’s current budget

Governor Tate Reeves released his FY 2026 budget proposal in November 2024 and gave the state of state address in January 2025. The FY 2026 budget was enacted in June 2025.

Mississippi enacted its FY 2025 budget in May 2024. The budget reported $7.0 billion in general fund spending, a 5 percent increase over the previously enacted budget. In 2025, Mississippi passed a bill that allows it to begin phasing out its state income tax in forthcoming years; the state is also reducing its sales tax on groceries. Mississippi had also approved a large individual income tax cut in 2022.

Under the American Rescue Plan, Mississippi received $1.8 billion in direct state fiscal aid and $679 million in local government aid from the federal government. As of January 2025, Mississippi had fully allocated its state ARP. States must spend the funds by Dec. 31, 2026.

According to the National Association of State Budget Officers (NASBO), Mississippi’s total expenditures in fiscal year FY 2025 were $23.7 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2025 were $2.9 trillion, ranging from $5.4 billion in Wyoming to $413.8 billion in California.

According to NASBO, Mississippi’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

• FY 2025: $7.0 billion/$32.0 billion
• FY 2024: $6.6 billion/$25.6 billion
• FY 2023: $6.3 billion/$23.7 billion
• FY 2022: $5.8 billion/$23.1 billion
• FY 2021: $5.6 billion/$22.2 billion
• FY 2020: $5.7 billion/$20.3 billion
• FY 2019: $5.5 billion/$19.2 billion

For more on Mississippi’s budget, see

• the Mississippi Department of Finance and Administration,
  
• Transparency Mississippi, and
  
• the Mississippi Legislative Budget Office.

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.)

Overview of Mississippi’s state and local expenditure and revenue sources

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 $29.6 billion in FY 2022 (the most recent year census data were available), or $10,065 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 $12,083.

Mississippi’s largest spending areas per capita were public welfare ($2,329) and elementary and secondary education ($1,821). 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 $34.5 billion in FY 2022, or $11,729 per capita. National per capita general revenues were $13,619. Mississippi uses all major state and local taxes. After federal transfers, Mississippi’s largest sources of per capita revenue were charges ($2,282), such as state university tuition and highway tolls, and general sales taxes ($1,623).

Mississippi’s economic trends

Mississippi’s per capita income (per the Bureau of Economic Analysis) was $52,017 in 2024, ranking 50th among the states. It was below both the national average of $72,425 and the Southeast regional average of $61,546. The state’s median household income (five-year estimate) was $56,447 in 2024, ranking 50th among the states and below the national average of $80,734. Mississippi’s poverty rate was 18.9 percent in 2024 (five-year estimate), above the national rate of 12.5 percent.

Although Mississippi’s averages tell a story about the entire state, Mississippi is composed of diverse localities. For example, the city of Meridian’s median household income was $36,562, and its poverty rate was 34.3 percent; the city of Madison’s median household income was $119,338, and its poverty rate was 4.8 percent.

Mississippi’s unemployment rate has historically been above the national average and particularly spiked following Hurricane Katrina. In recent years, Mississippi’s unemployment rate has been among the highest in the country.

Unemployment rates (like other economic indicators) often vary significantly by race and ethnicity. In Mississippi, the average unemployment rate in 2024 was 2.3 percent for white residents and 4.2 percent for Black residents.

The major industries that contributed the most to Mississippi’s gross domestic product (GDP) in 2024 were finance, government, manufacturing, retail, and social services (i.e. health and education). Government, manufacturing, and retail contributed more to Mississippi’s GDP than they did to the nation’s and region’s GDP, while finance and social services were less important to Mississippi than they were to the nation and region in 2024.

Looking at more specific industries, among those that accounted for at least 1 percent of Mississippi’s GDP in 2023, state and local government produced more for the state than for the nation, contributing 11.2 percent to Mississippi’s GDP and 7.6 percent to the nation’s. Other industries that overperformed in Mississippi relative to national averages in 2023 were retail, petroleum and coal manufacturing, utilities, and wood manufacturing.

Mississippi’s politics

Governor Tate Reeves, a Republican, was elected in 2023 with 51 percent of the vote. The next gubernatorial election is in 2027.

Republicans control both the House of Representatives (78 Republicans to 41 Democrats and 2 independents) 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 2027 because both representatives and senators serve four-year terms.

Mississippi’s demographics

As of July 2024, Mississippi’s population was 2,943,045. That was down 0.9 percent from 2010. For comparison, the nation’s population experienced 9.9 percent growth over the same period. The Urban Institute estimates the state’s population will increase 5.4 percent between 2010 and 2030, less than the nation’s estimated growth rate of 16 percent.

Additional resources

• The State and Local Finance Initiative’s Backgrounders explain the tax and spending issues highlighted in these briefs.
  
• The State Economic Monitor presents updated data and customized visualizations of state economic indicators.
  
• State and Local Finance Data: Exploring the Census of Governments allow users to sort, customize, and download the Census of Governments State and Local Finance series data featured in these summaries.
  
• The State Tax and Economic Review series provides quarterly reports on state tax collections and underlying economic trends in all 50 states.
  
• The Urban Institute’s State Tax Data Subscriptions provide access to up-to-date revenue data in all 50 states.