Crawford: Balanced budget really isn’t.

Truth is, the Legislature does not know if the overall state budget and agency sub-budgets will balance or not. That’s why the state maintains a “rainy day fund.” That’s also why the Governor has authority to slash agency budgets should revenues fall substantially below target.

The revenue side of the budget comes from best-guess projections provided by economic experts. State leaders use that input to set a revenue target. Sometimes targets are reasonably accurate, as this year’s seems to have been, sometimes not. When revenue fell short in 2009, Governor Haley Barbour had to slash budgets 9.5 percent. Next year the unknown impact of new tax credits could short revenues.

Then there are agency deficits arising from programs with uncontrollable costs such as Medicaid, corrections, and emergency management. The Legislature usually covers these deficits during its next session.

There are also tricks used by legislators to make budgets seem in balance. The dominant one is to use “one-time money” to fund recurring costs. This practice is what dried up the billion dollar tobacco settlement trust fund; the Legislature kept drawing down those funds to cover recurring expenses. Over $400 million in recurring expense is covered by one-time money in the current budget.

“My goal is to get the one-time money down to about $250 million,” said House Appropriations Chairman Herb Frierson. Frierson recognizes that such practices should be eliminated but he will have to try and wean his colleagues off that udder over time.

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Budget estimate revision could happen before House-Senate negotiations.

It is not uncommon for the Legislative Budget Committee to meet late in the session to change the estimate before the House-Senate negotiations, where final decisions on the budget are normally hammered out.

It will be up to House Speaker Philip Gunn, R-Clinton, who is chair of the Budget Committee this year, to decide whether to ask the state’s financial experts to look at the revenue picture and whether to call a meeting of the Legislative Budget Committee to consider revising the estimate.

“I think that is an option that is open and obviously something he is looking into,” said Nathan Wells, Gunn’s chief of staff. “It is a definite possibility.”

If the estimate is changed it probably would be revised upward.

Through February, collections are $132.1 million above the estimate made in April 2012 to construct the budget for the current year. Collections for the current year include $35.2 million from the settlement of lawsuits by Attorney General Jim Hood not factored into the estimate.

Still, without those funds, collections are nearly $100 million above the estimate.

When asked about increasing the estimate in the coming weeks, Senate Appropriations Chair Buck Clarke, R-Hollandale, a member of the Budget Committee, said, “It is an option. I am hoping that revenues continue to improve.”

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Tupelo Schools unveil preliminary 2012-13 budget

The Tupelo Public School District will have a 3 percent reduction in spending this year, according to a draft of the district’s 2012-13 budget presented on Tuesday.

The district will not approve its budget until Aug. 14, but on Tuesday it held a public hearing to present a draft of that document. It could lead to a tax decrease.

The budget calls for the district to spend $82,525,076, or about $2.7 million, less than what it spent during the past year. That total does not include $11.3 million that will be transferred between different funds and $535,000 it will spend on the Hancock Learning Foundation – apartments the district owns. Counting that money, expenses total $94.4 million.

via djournal.com – Tupelo Schools unveil preliminary 2012 13 budget.

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Budget proposals not entertaining

Mississippi‘s budgeting process has drifted far, too far, from the bottom line. As a prime example, we cite the state Department of Health, which contends it needs at least $30 million to meet basic needs and an additional $6 million from the state to match a $13 million grant for life-saving medications.

Yet some members of the Legislature have countered with a proposed budget of less than $21 million.

That would be the smallest amount the Health Department has received from legislators since 1990.

State Sen. Terry Burton, R-Newton, vice chairman of the Senate Appropriations Committee, admits his colleagues probably will not slash their contribution to the Health Department by more than a third.

Burton anticipates an appropriation of about $28 million.

So why these pointless proposals and counter-proposals? Just so one side can scream while the other side squeezes?

via Budget proposals not entertaining | Hattiesburg American | hattiesburgamerican.com.

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Governor Bryant’s suggested budget cuts include sale of jet

Mississippi can save more than half a million dollars a year if the state sells one of its jets valued at more than $2 million, Gov. Phil Bryant said Tuesday.

The proposal to sell the state’s Cessna Citation, purchased in 2005 during Gov. Haley Barbour‘s administration, was one of the more unexpected recommendations to come from Bryant’s plan for the fiscal year that begins July 1.

The Legislature ultimately will dictate budget priorities, but the governor’s executive recommendation often serves as a starting point.

To shore up the state’s nearly $5.5 billion budget amid a revenue decline, Bryant is recommending average cuts of 5.53 percent to most state agencies.

“This is the most challenging budget I’ve ever seen for any governor or Legislature,” he said.

Bryant’s budget proposal recommends the state spend $26 million less than it did this year, while building $100 million in reserves.

via Suggested cuts include sale of jet | The Clarion-Ledger | clarionledger.com.

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Phil Bryant makes first budget recommendation as Governor: No New Taxes, No Deficits, Adopt Savings Plan

JACKSON – Gov. Phil Bryant unveiled his Executive Budget Recommendations for fiscal 2013, providing legislators with the framework for a balanced budget that has no new taxes, no planned deficits, reduces dependence on spending one-time monies for recurring expenses and sets aside two percent of the state’s revenue for the “rainy day” fund.

Bryant made the announcement Tuesday from the former Supreme Court Chamber inside the Capitol.

“Putting this budget recommendation together was no easy task, but it contains some sweeping changes to the way money has traditionally been budgeted in the past,” Gov. Bryant said.“This budget spends $168.4 million less in one-time money for recurring expenses than was used in fiscal ’12. Total state support spending is $26 million less than last year and I am committed to doing more with less, making necessary cuts before raising taxes.”

The budget recommendation calls for state agencies to be granted “lump sum” spending authority and to be exempted from State Personnel Board requirements for the next four years. Similar legislation was supported by Bryant as lieutenant governor and always passed the Senate but failed adoption by the House.

“These flexibility measures will allow agency heads to prioritize their budgets, instead of having spending arbitrarily dictated by the legislature,” Bryant said. “I see these measures as a way to build a more efficient state government and maximize our output.”

The budget recommendations are based on a $5.49 billion state budget for fiscal 2013 and include $4.56 billion in projected General Fund revenue. Bryant’s budget uses $274.3 million of the state’s available $280.7 million in cash reserves. If the Legislature agrees with setting aside the 2 percent, it is anticipated that the state would build more than $100 million available to weather fiscal ‘14.

Bryant’s budget recommendation calls for a 5.53 percent cut to all state agencies with the exception of court-ordered settlements, debt service, Mississippi Highway Patrol, Mississippi Law Enforcement Training Academy, Military Department, Veteran Affairs Board, District Attorneys, Mississippi Department of Corrections, Student Financial Aid, Board Certified Teacher Program and Mississippi Adequate Education Program. It also recommends a 6.5 percent cut to the Governor’s Office and the Legislature.

Bryant proposes smaller cuts to the Mississippi Development Authority and the Department of Human Services.

Some highlights from Gov. Bryant’s budget recommendation include:

• Level funding MAEP using $1.95 billion in state funds and $72.9 million in local reserve funds. (School districts had in excess of $615 million in reserves as of 06/30/11.)

Other education spending ($27 million):

• $6 million to Emergency Bridge Loan Fund.

• $3.7 million increase above FY2012 to Chickasaw Interest, as required by law.

• $12 million total to Teach for America and MS Teachers Corps.

• $5.7 million to fully fund high growth districts.

Community Colleges and IHL:

• Student Financial Aid level-funded ($26.9 million).

• Existing $27 million appropriation made to DOE for workforce development now goes directly to community colleges that administer programs.

Medicaid:

• Fiscal ‘13 appropriation is level to FY12 at $763 million.

• Center for Medicaid Services projects 36,000 new eligible enrollees this year.

• Without proposed reform the potential cost to Mississippi taxpayers in fiscal ’13 is over $100 million more than in fiscal 2012.

• Medicaid must have more flexibility to set reimbursement rates, or Mississippi must add more than $100 million to Medicaid’s General Fund appropriation.

• Adding more than $100 million without giving Medicaid more flexibility will result in drastic reductions to state agency appropriations.

Gov. Bryant also reiterated his frustration with the current budgeting process and called for the passage of the Smart Budget Act, a performance-based budgeting system that requires budget decisions to be made based on results.

“I am not a fan of the current antiquated budgeting system. Deciding how much to spend before we even know how much money we have is not a good practice, and the time for reforming the process is now. Confronting expenditures with a fact-based budgeting system that Mississippi addresses needs affordability.”

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Mississippi casino revenue continues downward spiral

Mississippi has just announced its casino gambling figures for November revealing a nearly 8% fall in revenue to $165.8 million, down from $179.6 million for the same month last year.

November’s revenue was the one of the worst recorded in almost 11 years. With the exception of Indian tribal casinos which are legally exempt from public scrutiny, the State’s gross revenue is currently down 7% to $2.05 billion for 2011.

http://www.onlinepoker.net/poker-news/casino-news/mississippi-casinos-8-1658m-november-2011/13519

Barbour to release final budget recommendations as Governor today.

Mississippi Gov. Haley Barbour on Tuesday is releasing his state spending plan for the coming budget year.

The Republican leaves office when his second term ends Jan. 10, nearly six months before fiscal 2013 begins on July 1. He will make recommendations that new Phil Bryant can use as they decide how to spend the state’s money.

Barbour is expected to urge officials to be cautious and to leave several million dollars in reserve, as he has in years past.

http://www.wxvt.com/Global/story.asp?S=16358799&config=H264

USM seeks $10M from Legislature for building | Hattiesburg American | hattiesburgamerican.com

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For the second year in a row, University of Southern Mississippi officials are hoping for a big funding boost from the Legislature for a new School of Nursing building.

And while legislators denied last year’s $15 million request, College of Health Dean Michael Forster said he believes this year’s $10 million request is more feasible now that the College of Business has received its needed funds.

“Last year, we would have loved to get $15 million for the nursing building, but our (the university’s) top funding priority was a final round of funding for the business building, not nursing,” said Forster. “This round, however, the nursing project is indeed the university’s top priority.”

Estimated to cost just under $30 million overall, the nursing project is also in the silent phase of a private fund-raising campaign designed to raise $8 million.

Forster said the campaign expects to go public in January with more than $4 million in private funds raised by that time.

School officials hope that the three-story, 75,000-square-foot structure will ease the space issues confronting the current 40,000-square-foot building on the Hattiesburg campus.

Within the last 10 years, the school has seen its enrollment double from admitting 80 new students annually to around 180.

via USM seeks $10M from Legislature for building | Hattiesburg American | hattiesburgamerican.com.

Mississippi retirees’ cost-of-living adjustments safe » The Commercial Appeal

In a rare move, members of the Joint Legislative Budget Committee voted Thursday to assure public employees that their 13th checks will remain untouched as legislators look for ways to fund the fiscal year 2013 budget that takes effect July 1.

“One thing is for sure, we have an agreement between current retirees and employees that represents a contract that should not be broken,” Lt. Gov. Phil Bryant said.

“I will not support any plan to eliminate the 13th check or change the arrangement current retirees and current employees have with (the Public Employees Retirement System).”

Legislators last year raised the amount of employee contributions to the retirement system from 7.25 to 9 percent of their salaries, and the amount could go up again this year, said PERS Executive Director Pat Robertson.

Budget-writing legislators said they were concerned about the prospect of having to pump more money into the system to help make it sustainable.

Employer contributions to PERS have risen from 9.75 percent in 2005 to 12.93 percent in January 2012.

The state-funded share of the PERS budget for 2013 would be about $26.4 million, noted Senate Appropriations Committee chairman Doug Davis, R-Hernando.

Meantime, employee contributions rose from 7.25 percent to 9 percent in 2010, according to PERS facts and figures, raising fears among employees that they may have to pay even more in the future and decreasing the amount of their take-home pay.

“These people have every right to be concerned. This is their livelihood,” said House Education Committee chairman Cecil Brown, a CPA.

Brown noted that the 3 percent COLA is a solid number since the average annual rate of inflation over the last 80 years has been 3.1 percent.

via Mississippi retirees’ cost-of-living adjustments safe » The Commercial Appeal.