In Mississippi, Governor Wants to Tap Rainy Day Fund to Balance the Budget

by | January 27, 2016

By Bobby Harrison

Gov. Phil Bryant, facing the specter of sluggish revenue collections throughout the current fiscal year, announced cuts to various state agencies totaling $39.8 million.

Under the plan Bryant announced late Wednesday, no agency would be cut more than 1.5 percent and various entities, such as Medicaid, the Mississippi Adequate Eduction Program, student financial aid, public safety, the Division of Children Services and others would be exempt from the cuts.

The Adequate Education Program is the mechanism used to provide the state's share of funds for the operation of local school districts.

In addition, the Republican governor is dipping into the state's rainy day fund, which is currently at its statutory cap of about $400 million, to direct $35.2 million to state agencies to alleviate the need for additional cuts.

"It has become clear that revenue is not adequate to support budgeted expenditures for the current fiscal year," Bryant said in a letter to the state's fiscal officer outlining the cuts. "Unfortunately, cuts in state government are necessary to meet the requirements of state law to balance Mississippi's budget."

Cuts of the size announced by Bryant Wednesday are not expected to result in layoffs of any state employees.

For the current fiscal year, which began on July 1, revenue collections are $54 million below the projection that was used to build the state budget. And revenue collections are $23 million below the amount collected during the same time period last year.

It is unusual for the state to collect less in revenue than in the previous year. In recent meetings, various state financial experts expressed optimism revenue collections would rebound during the second half of the fiscal year.

But in December, the final month of the first half of the fiscal year, collections again were sluggish -- $21.6 million below the estimate.

Bryant said making the cut now would give agencies more months to absorb the decrease in funding.

Rep. David Baria, D-Bay St. Louis, said the slowdown in revenue should be expected, considering tax cuts given by the Legislature during the past four years.

"When you keep cutting taxes and giving tax credits, there will not be enough money to pay for the things you have to pay for," said Rep. Jay Hughes, D-Oxford, adding if the Republican majority continues with its plan to cut taxes, additional budget cuts will be needed.

The two presiding officers, Lt. Gov. Tate Reeves in the Senate and Speaker Philip Gunn in the House, sent out a joint statement in support of Bryant's decision and announced a cut in the legislative budget.

By law, the governor cannot cut the budget for the Legislature.

(c)2016 the Northeast Mississippi Daily Journal (Tupelo, Miss.)