Mississippi USA'S timber severance tax apportionments and their economic contributions

Abstract

Eighty percent of Mississippi's timber severance tax collections were authorized by the state legislature in 1984 to fund the Forest Resource Development Program (FRDP), which is a cost share program through which landowners can receive up to 75% reimbursement for their forest management expenses. The remaining 20% is apportioned on shares to counties where timber was harvested. The regional economic contributions of the Mississippi timber severance tax funding spending for FRDP and county governments were determined. Social accounting matrixes (SAMs) were constructed and customized using 2019 data collected by Mississippi State University, IMPLAN, and Lightcast. The modified SAMs were rebalanced to ultimately obtain the total requirements matrix. Funds expended for FRDP and counties in 2019 were run as exogenous final demands. The total possible impact was estimated to be $6.00 million in industrial output and 222 full-time and part-time employment. Because actual expenses were only 72.8% of FRDP funds available that year, this lessened the actual contribution by $1.80 million in output, $1.39 million in value added, and 80 jobs. Regional output contributions correlated moderately with tax collections and forest inventory statistics. Evidence pointed to an inequality of economic flows regarding what South Mississippi paid in tax and the contributions it received in return via industrial activities.