There’s a blindside hit coming at Mississippi’s economy next month. It will be in the form of high utility bills brought about by unexpected cold weather, now known as the “Arctic Blast.” Instead of spending money on spring fashions, spring travel, and consumer goods in general, Mississippians, like every other American hit by cold weather, will be spending a significant amount of their money on utility bills instead of consumer goods and services.
Let’s do the math. There are 1,046,434 households in Mississippi, according to the latest numbers from the Census Bureau. If the average household has a $200 increase in its utility bill next month there will be $209,286,800 not spent on other things. If those other things are subject to the state sales tax, unlike electricity and residential fuels, then the state will collect $12,557,208 less, and municipalities will receive $2,092,860 less.
Add to that, average gasoline prices in Mississippi are at $2.60 per gallon today. Since June 1, 2009, those average prices have been as low as $2.31 per gallon and as high as $2.60 per gallon, according to the AAA Fuel Guage Report. Although gasoline prices are not expected to rise dramatically in the next 30 days, it should be noted that on February 1, 2009 the average gasoline price in Mississippi was $1.32 per gallon.
As policymakers deal with ways to stimulate the economy it should be remembered that energy costs have a significant and IMMEDIATE effect on the economy at every level.