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Miss. economist predicts lasting benefit from Katrina

An economist predicts that the recovery from Hurricane Katrina will help Mississippi’s state budget for years to come.

“We are going to see the recovery go on for another decade,” state economist Phil Pepper said Tuesday at a luncheon hosted by the Mississippi Economic Council.

Pepper said rebuilding from the Aug. 29 storm would produce “a more tourism-oriented Gulf Coast” and make south Mississippi a stronger force in the state’s political arena.

Pepper’s prediction runs counter to what Gov. Haley Barbour and many legislative leaders have been warning in recent months — that tax collections are one-time money that will not last.

Pepper said tax collections will slow, but that the impact of Katrina will continue. He agreed that sales tax collections will not continue to increase by more than 15 percent.

Pepper said the Katrina recovery might offset what otherwise might have been stagnant tax collections, slower than the national average

Those stagnant collections, Pepper said, would have been caused by the state’s long-term problems, specifically in education and a work force whose education level is below the national average.

Pepper said Mississippi must change “the culture” to place more value on education, especially on earning a college diploma.

To meet that goal, he said, “we have to get involved … in early childhood education.”

Pepper said education leaders from the kindergarten level to the university level are willing to consider changes to improve the state’s education level.

Education and political leaders, Pepper said, are responding to a “crisis” caused by low-paying manufacturing jobs leaving the state for cheaper foreign labor.