Mississippi state budget (2008-2009)
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Despite several states still waiting for news on the exact details of the federal stimulus package, Mississippi lawmakers are moving ahead with discussions about FY 2010's budget. For FY 2009 Mississippi is facing a $175 million deficit that the Center on Budget and Policy Priorities projects say will decline to $87 million for FY 2010.[1]
Gov. Haley Barbour has already cut approximately $87.8 million from elementary and secondary schools — approximately 3 percent of the budget for the fiscal year that ends June 30.[2] In the Governor's FY 2010 budget recommendations he noted that the state's revenue is declining. "Some of our counter-cyclical sectors, like energy and defense contracting, appear less healthy than a few months ago," said Barbour. The gaming industry too has seen a decline in revenue as has commodities which state officials anticipate to affect farmers, incomes and state oil and gas severance tax collections.[3] In light of declining revenues the Governor said that agencies, including higher education, will see a 5 percent cut to funding. "The news is not as bad as it could be," he said. "Just as the legislature has been prudent in filling the Rainy Day Fund, our school districts have done a great job of setting aside their own Rainy Day Funds."[4]
[edit] Impact of budget woes
- Main article: State budget crisis, 2009-2010
- Mississippi has lost 26,200 jobs or approximately 2 percent in the last six months of 2008. By comparison, total non-farm employment in the U.S. fell by 1.87 percent over the same period. Losses were heaviest in manufacturing, 10,400 jobs lost, followed by the leisure and hospitality sector, 6,500 jobs lost, and professional and business services, 4,600 jobs lost. Together these three sectors account for 82 percent of the job losses through December.[5]
- Construction employment in the national economy caused approximately 24 percent of job losses in 2008 compared to only slightly more than 2 percent of the job losses in Mississippi.[5]
- Mississippi Valley State University faces a potential 10%, $1.5 million state budget cut for the FY 2010. According to university officials 69 percent of spending goes towards salaries which means that layoffs may be in the near future for university employees. In order to lessen unnecessary expenses officials have held off on hiring new employees for current open positions.[6]
- Most state agencies have already made 5 percent budget cuts. The funding formula for elementary and secondary schools in Mississippi were cut by $76 million, 3.49 percent. Education officials said that they are still finding ways to replace the funds.[7]
[edit] Budget background
The budget process in the state of Mississippi is a year long evolution. Officially beginning in May state agencies prepare requests before submitting them to the Governor for consideration in October. But before submitting a recommended budget the Governor first consults a group composed of the state economist, the state fiscal officer, the state treasurer, the chairman of the state tax commission, and the director of the legislative budget office. The group provides an estimated revenue forecast for the upcoming fiscal year based on current economic indicators and the economy's growth.
On December 15 the legislative budget committee submits the balanced budget recommendation to the Legislature. After a series of meetings and votes are made on individual bills the both the House and the Senate must approve the reports on the appropriation bills by the close of the legislative session, April 1. Once signed the Governor signs the bill into law.[8]
Mississippi's fiscal year begins July 1 and ends June 30.[3]
[edit] Budget figures
The following table provides a history of Mississippi's expenditures and gross domestic product (GDP).
| Fiscal Year | Expenditures (billions) | GDP (billions) |
|---|---|---|
| 2000 | $15.4 [9] | $64.3 [9] |
| 2001 | $16.3 [9] | $66.0[9] |
| 2002 | $17.3[9] | $68.1 [9] |
| 2003 | $18.4 [9] | $72.3 [9] |
| 2004 | $19.5 [9] | $76.5 [9] |
| 2005 | $20.0 [9] | $79.5 [9] |
| 2006 | $22.1 [9] | $84.6 [9] |
| 2007 | $24.4 [9] | $88.5 [9] |
| 2008 | $26.9 [9] | $92.7 [9] |
| 2009 | $29.8* [9] | $97.0* [9] |
- NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
[edit] Ideas about why the crisis exists
- Collections for the general fund in January 2009 were approximately $25 million or 6.5 percent lower than expected. According to state officials the total state budget is $90.8 million below estimates for the current fiscal year. In December revenues were $65 million below estimates.[7]
- General fund collections for January were $23.8 million below what was collected for the same month in 2008, according to a legislative budget report issued in February.[7]
- Most of the state's revenue stems from sales taxes and in February the collected revenue was closer to estimates than prior months - only 1.18 percent below estimates.[10]
- Mississippi gaming revenue dropped to $2.72 billion in 2008, a 5.9 percent drop from 2007. According to the American Gaming Association, casinos had reported earnings down 3.6 percent in the first 11 months of 2008 compared to 2007.[11]
- In January 2009 a bill passed the state House that would require the Governor to sell his nearly $4 million dollar plane and costs $1,900 per hour to use. The state currently owes $500,000 on the jet. Should the jet be sold the Governor and state officials have three other aircraft for use. The bill gained support from 76 lawmakers; 42 opposed it. State Rep. John Moore tried unsuccessfully to change the bill to get rid of all state planes.[12]
[edit] Proposed actions
[edit] Governor Haley Barbour
In the Governor's state of the state address he announced that due to the hundred million dollar deficit that the state is facing a 5 percent cut will be made across the board in all state agencies.[3] State lawmakers, in an attempt to raise the state's revenue, have suggested increasing the cigarette tax. Barbour, once an opponent of the legislation, said that he supports a modest increase. Barbour is recommending an increase of 24 cents a pack for premium cigarettes and 43 cents a pack on cigarettes produced by companies that didn't participate in the state's 1997 settlement of a lawsuit against the tobacco industry. However, Barbour warned lawmakers in estimating how much revenue a tax increase might generate, particularly since cigarette sales might decline because of the higher federal tax. He also warned that smokers might cross state lines thus not increasing state revenue after all. [13]
Mississippi is expected to receive approximately $2.8 billion from the federal economic stimulus package however, Barbour said that he is planning on rejecting some of the money, primarily the unemployment funds. The state is expected to receive $58.3 million for unemployment benefits however, the state would first have to change its laws to allow more unemployment compensation and expand the qualification of applicants.[14]
[edit] Republicans
Despite the Governor's 5 percent cuts throughout the state's agencies, including higher education, some Republicans are pushing a $410 billion omnibus spending bill that would pay for the government's operations through September 2009. Although the bill is rife with earmarks and not all Republicans are content with the large amount of small local projects others believe that the bill is just what Mississippi needs.[15][16] "The ... funding that will be directed to Mississippi will do much to help our state recover from the economic downturn we face," said Senator Thad Cochran. The top-ranking Republican on the Senate Appropriations Committee, Cochran inserted tens of millions of dollars in university grants, Army Corps of Engineers projects and dozens of other earmarks.[16] However, like the Governor Republicans said that they are wary of the federal stimulus package that some lawmakers say will "rescue" Mississippi. Senator Roger Wicker said,"I'm afraid that a lot of the spending programs the president is proposing - and it's been a spending spree - will require higher taxes on small businesses."[17] Republicans throughout the state question not only the stimulus' budget but also it's ability to work. Cochran said,"I disagreed with the amount of spending proposed and the failure to provide incentives to stimulate the economy."[18]
[edit] Democrats
Democrats across the state said that it is important that the state's infrastructure is rebuilt and maintained because this, said Rep. Brandon Jones, will bring and maintain jobs in Mississippi. However, the Governor has expressed that cuts across all state agencies is necessary but Democrats disagree. "We will not dig our way out of bad times by de-funding education; we will only dig ourselves a deeper hole. That is why when over 17 million dollars were cut from our state’s community and senior colleges, Democrats in the House led a bipartisan effort to restore these funds to our Institutions of Higher Learning," said Jones.[19] Additionally, Democrats said that Mississippi simply cannot afford to reject the federal stimulus package. "It is appalling to me Governor Haley Barbour would be ambivalent to receiving funds from the stimulus package being debated before Congress now," said Jamie Franks, Chairman of the Mississippi Democratic Party. "The deficit is rising each month because of drops in tax collections and Governor Barbour is neither joining Democratic nor Republican Governors in their support of passage of the stimulus package."[20]
[edit] Economic Stimulus Package
Mississippi is expected to receive approximately $2.8 billion from the $787 billion economic stimulus package. The estimated total impact of the funds is totaled at $5.2 billion.According to White House officials the stimulus bill is estimated to create or save 30,000 jobs.[21]
However, Gov. Haley Barbour said he'll refuse about $56 million in unemployment compensation because it would require Mississippi to expand benefits to part-time workers.[22] Barbour added that accepting the money would mean increased taxes for businesses that would have to cover the cost of the extra unemployment benefits in the future. "We want more jobs. You don't get more jobs by putting an extra tax on creating jobs," Barbour said.[23]
According to preliminary reports Mississippi is expected to receive:[24] [25]
- $56 million for unemployment benefits
- $350 million for highways and bridges
- $480 million in block grants for education
- $790 million for Medicaid
[edit] Budget transparency
Mississippi has a new statewide, official spending database online. The Mississippi House Bill 101 (2008), Mississippi Accountability and Transparency Act mandated the creation of such a website.[26] The state has also launched the State of Mississippi Management and Reporting System.
[edit] Legislation
- Mississippi House Bill 101 (2008), Mississippi Accountability and Transparency Act[27]
[edit] Government tools
The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:
| State Database | Searchability | Grants | Contracts | Line Item Expenditures | Dept/Agency Budgets | Public Employee Salary |
|---|---|---|---|---|---|---|
| MS Management and Reporting System |  |  | | | | |
[edit] Limitations and Suggestions
This site does not enable users to search for particular employees to find out their specific salaries.
[edit] Support for creation of the database
The National Taxpayers Union supported the passage of Mississippi's Mississippi House Bill 101 (2008), Mississippi Accountability and Transparency Act, and issued a press release describing the bill's passage.[28]
[edit] Public employee salary information
State of Mississippi Management and Reporting System shows information on the State Budget, State Property, Revenues, Vendors, and State Employees.
[edit] Economic Stimulus Transparency
- The Economic Recovery and Reinvestment Act of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.[29]
- Mississippi will receive an estimated $1,606,249,181 [30]
- The economic recovery website to show how legislators and government officials in Mississippi are being done by the state auditor who is tracking an ARRA that come into the state.
[edit] See Also
Mississippi taxpayer-funded lobbying
[edit] External links
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
- Mississippi Center for Public Policy
- Mississippi government spending
- Mississippi Forward
- State of Mississippi Management and Reporting System
[edit] References
- ↑ Center on Budget and Policy Priorities,"State budget troubles worsen," February 10,2009
- ↑ Associated Press,"State budgets being delayed by stimulus debate," February 10,2009
- ↑ 3.0 3.1 3.2 State of Mississippi,"FY 2010 Executive budget recommendation," November 17, 2008
- ↑ The Reflector,"Barbour budget cuts limit agencies," February 10,2009
- ↑ 5.0 5.1 Hattiesburg American,"Mississippi will continue to feel recession's effects," March 1,2009
- ↑ Associated Press,"MVSU faces possible 10% budget cut," March 2,2009
- ↑ 7.0 7.1 7.2 Clarion Ledger,"Miss. tax revenue off $90M," February 5,2009
- ↑ Mississippi Economic Policy Center,"How is the state’s budget created?," retrieved March 2,2009
- ↑ 9.00 9.01 9.02 9.03 9.04 9.05 9.06 9.07 9.08 9.09 9.10 9.11 9.12 9.13 9.14 9.15 9.16 9.17 9.18 9.19 US Government Spending,"Mississippi State and Local spending," retrieved February 27,2009
- ↑ Clarion Ledger,"Miss. sales tax revenue down in Feb.," March 2,2009
- ↑ Associated Press,"Mississippi records drop in revenue in 2008," January 21,2009
- ↑ Clarion Ledger,"State plane could be sold on eBay," January 30,2009
- ↑ Associated Press,"Miss. lawmakers still pushing cigarette tax hike," February 26,2009
- ↑ Jackson Free Press,"Federal Stimulus: ‘We Need to be Ready’," February 26,2009
- ↑ Hattiesburg American,"House approves $410B in spending," February 26,2009
- ↑ 16.0 16.1 Clarion Ledger,"Spending bill may give Miss. millions," March 2,2009
- ↑ Clarion Ledger,"Miss. leaders split on Obama speech," February 26,2009
- ↑ The Mississippi Press,"Both Mississippi senators vote against stimulus," February 11,2009
- ↑ Mississippi Democrats,"State Rep. Brandon Jones gives Democratic response to state of the state," January 13,2009
- ↑ Mississippi Democrats,"Mississippi can't afford to say no!," February 5,2009
- ↑ WLBT3,"Jobs could be biggest part of Mississippi's stimulus benefits," February 17,2009
- ↑ Associated Press,"Skirting governors to get stimulus may not be easy," February 27,2009
- ↑ NPR,"Governors to Obama:'Thanks, but no thanks'," February 25,2009
- ↑ MSNBC,"Barbour wants more stimulus money for construction," February 27,2009
- ↑ WLOX-TV,"State leaders promise stimulus money will be well spent," February 26,2009
- ↑ National Taxpayers Union, "Nation's Largest Taxpayer Group Applauds Mississippi for Passing Spending Transparency Legislation," April 17, 2008
- ↑ Department of Finance and Administration, "Mississippi Management and Reporting System," June 20, 2008
- ↑ National Taxpayers Union, "Nation's Largest Taxpayer Group Applauds Mississippi for Passing Spending Transparency Legislation," April 17, 2008
- ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- ↑ Wall Street Journal,"Stimulus Spending by State," March 12,2009
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