BY: B. Keith Plunkett @Keithplunkett
In April, with the 2012 legislative session coming to a close, drama was unfolding in the halls of the Mississippi State Capitol. Drama in the final days of a session is not an unusual occurrence, and certainly not with both ends of the building falling under Republican rule for the first time in 150 years. However, in this particular instance lawmakers were hurriedly attempting to put together a bond package to help fund improvements, particularly at Mississippi’s universities, and the deadline was getting tight.
The House of Representatives had accomplished it’s work on the package in February on HB 1631 and had sent it over to the senate for review. In a typical scenario, the senate would follow suit and send over a package to the house. Differences would then be ironed out in conference by the chairman of Ways and Means in the house, and the chairman of Finance from the senate, along with two conferees appointed by each. The package would then be built anew from the ground up. This dance has been performed unchanged for decades.
This year, however, was different.
Senate Finance Chairman Joey Fillingane refused to meet with his counterpart in the house, Representative Jeff Smith, reportedly at the instruction of Lt. Governor Tate Reeves. Reeves instead opted to call a meeting with House Speaker Philip Gunn and the two chairman just 24 hours before the deadline to try to hammer out a take-it-or-leave-it deal. The meeting adjourned with no deal.
Two hours before the deadline, Reeves told Speaker Gunn there would be no further discussion involving the two chairman. This would instead now be between the leaders of the two bodies only. With the clock running out on Mississippi universities, the two newest of the GOP leadership watched the deadline slip past.
The initial cost in that house version of the bond bill for colleges that was left on the table was $104 million over 4 years.
The cost now being floated by IHL to the legislature? $684 million.
So what’s changed? Trust.
Once able to work closely together to determine need versus indebtedness and come up with a number that still got the job done, the college board has been forced to resort to throwing the problem at the feet of the legislature and, in essence saying, “Okay, then you fix it!”
But, taxpayers may find there is something even more disturbing going on here than simple irresponsibility and a disregard for a quickly depreciating and crumbling infrastructure at Mississippi universities–a fact that alone will likely cost more in the long-run than if the problem were addressed sooner.
A look at the past record indicates what may be happening is the reconstruction of Tate Reeves image for future aspirations, at the expense of long-term savings for Mississippi taxpayers. At a time when the long-term costs of investment–maybe more appropriately described as non-investment–will be socking it to Mississippi taxpayers, Reeves would be long gone, on to bigger and better things. This is much akin to what occurred with PERS risky investments, another board Reeves sat on as treasurer. That debacle ended with Mississippi having to sue firms in order to get a smaller piece of state retiree’s money back after investing in risky mortgage schemes.
Reeves aspirations for higher office is no secret. But in order to get there, there have to be a few bona fides, either real or contrived. Building a conservative candidate narrative is tougher when the pattern and the particular don’t match up.
The particular instances we’re currently being spoon-fed by the Lt. Governor is a “tough on government waste” narrative. It’s not indicative, however, of the pattern.
As Treasurer, Reeves oversaw the issuing of nearly $3.5 billion in bonds over the span of 7 years, that’s half a billion a year in state issued bonds. Yes, billion . . . with a “B”. That’s twice the amount that was in HB 1631 multiplied by seven. It’s hard to wipe that big spending slate clean without some drastic measures, like say, a wild swing in the other direction.
The firms that managed the investment of those bonds was at the discretion of the Reeves’ run Treasury Department, allowing for contracts to be awarded to money managers represented by marketing managers. Marketing managers are known for giving out campaign cash like candy from a bank teller, and at least two marketing managers that gave sizable sums of money to Reeves have been linked to pay-to-play scandals and indictments in other states. That tidbit doesn’t exactly fit the “tough on government waste” narrative we’ve been hearing, does it?
If the position to issue no bonds is, as Reeves says, about having a “conservative borrowing plan for only the most essential needs”, then one might ask what he defines as “essential”? Why is it that Reeves needed a personal driver at taxpayer expense in a state-owned vehicle for the entire time he was in the Treasurer’s office? Is that “essential”?
How does that compare to the “essential” need of renovating the only science building at Delta State University, or the library at Mississippi University for Women that is virtually the same as it was in 1969? Is it more essential than safe bridges and roads?
Reasonable people can debate the assessment of need in the College Board’s list. But, it’s difficult to describe the need of universities as secondary to that of a $26 million Civil Rights Museum. One of Reeves last acts as treasurer was to agree to fund Haley Barbour’s call for a Civil Rights Museum by issuing state bonds. This was, of course, right after Barbour stuck his foot in his mouth over the subject of race relations, and his aspirations for a Presidential run were suffocating. That was just a year ago. One wonders if Reeves believes such spending to be more “essential” than funding the college facilities that will educate Mississippi’s next generation.
One might also ask, “what borrowing plan is Reeves referring to?” If he has one, then the college board doesn’t know about it. That’s why they are having to ask the legislature to come up with one. Furthermore, if such a plan does exist and is simply hidden away then taxpayers need to see it to know if it relies on questionable returns.
I am not in favor of big government spending. Most conservatives aren’t. But, I’m guessing that most conservatives are in favor of responsible, transparent, long-term investment that creates a greater return at a lower cost to taxpayers. Why on earth would we allow a bad problem to get worse when it will cost us much, much more in the long run? What the hell is so conservative about that?
As a finance guy–albeit for a short while before riding Haley Barbour’s coattails into the Treasurer’s office–Reeves surely would have understood the need for investment in depreciating assets to maintain viability for long-term savings. The problem is, that message doesn’t play nearly as well as the simplistic chest thumping message of “standing up to state debt”.
And what about the additional debt to the state? The house under Speaker Gunn’s leadership was prepared to authorize only as much new spending as the state had paid off, a tactic for funding state improvements that was a staple of former Governor Barbour’s repertoire. It was also a tactic that Treasurer Reeves signed off on whenever Barbour wanted for 7 years. That sounds like responsible conservative fiscal management to me, and Speaker Gunn should be commended for it.
Taxpayers, state officials, county officials and college board members dealing with this issue need to consider that maybe this fly-by-the-seat-of-the-pants approach isn’t about conservative fiscal management or planning. Maybe it is neither long-term investment, nor the “essential needs” of Mississippi that’s the real reason there is no plan.
Evidence suggests it might very well be ambition, and a political need to clean up a not so conservative record on government waste, and a not so transparent record of awarding government contracts.
About Keith: Keith Plunkett has worked on communications issues with a range of public officials from aldermen to Congressmen, and a variety of businesses, governmental agencies and non-profits. He serves or has served as a board member of several non-profit, civic and political organizations. Contact him by going to HorizonMediaMarketing.com or follow him on Twitter @Keithplunkett