Barbour cuts $41M more from budget

By Bobby Harrison/NEMS Daily Journal

JACKSON – Gov. Haley Barbour made an additional $41 million in budget cuts Wednesday, and the likelihood of another budget stalemate intensified when House and Senate leaders sparred over how much to reduce the revenue projections for the current fiscal year and the next.
Barbour’s action brings the total amount of cuts he has made this year to $499 million, or 9.5 percent for most agencies.
Both House and Senate leaders eventually agreed to take the recommendation of the state’s financial experts to reduce the revenue estimate another $119.4 million for the current year and to cut it $112.9 million for the upcoming fiscal year, which starts July 1. Barbour made his cuts based on those projections.
The action of reducing the revenue estimate for the next fiscal year will make what already was viewed as a tough budgeting process even more difficult.
But Senate Appropriations Chair Alan Nunnelee, R-Tupelo, and the other Senate leaders argued that the estimate had not been reduced enough.
After the House negotiators refused to reduce it more than the experts recommended, Nunnelee said he would accept the recommendation, but with the caveat that only 98 percent of that estimate be appropriated.
Barbour and Lt. Gov. Phil Bryant agreed with Nunnelee.
State law requires that only 98 percent of the estimate be appropriated, leaving the other 2 percent as a cushion in case revenue does not meet projections.
But in recent years, as revenue collections have sagged, House and Senate legislative leaders and Barbour have agreed to appropriate 100 percent of the projection to avoid additional cuts.
Nunnelee has recently steered to passage legislation in the Senate to ignore what is known as the 98 percent rule.
But now Senate leaders and Barbour said they have changed their position. As the tax collections continue to come in under projections, Barbour said he has come to realize the 2 percent cushion is needed to keep him from being forced to make additional cuts.
“I have learned my lesson” about appropriating 100 percent of the revenue, said the governor.
Barbour said he would veto any legislation that appropriates 100 percent of the projected revenue.
“It doesn’t do anybody any good to pass a budget and not have the actual revenue to meet that budget,” Nunnelee said.
House Education Chair Cecil Brown, D-Jackson, said talk of not using 100 percent of the revenue had not come up before this year.
Senate leaders “all vote to use 100 percent,” he said. “I don’t know how they can say that today.”
Not using 2 percent of the projected revenue would take more than $90 million out of the revenue stream – in addition to the $112.9 million budget leaders agreed to reduce the projection during Wednesday’s meeting.
Even before the reduction in the estimate and the talk of not using the full 100 percent of the estimate surfaced, both House and Senate leaders have conceded it would be difficult to craft a budget that did not result in layoffs and a reduction in services.
Despite that, leaders on both sides had expressed optimism that they could finish on time and avoid what happened last year when a budget agreement was reached literally hours before the new fiscal year started.
But Rep. George Flaggs, D-Vicksburg, said talk of finishing on time in early April or even earlier would “go out the window if we don’t have the 2 percent or another option to replace those funds.”
Bryant admitted that talk of not using the 2 percent “could delay the process, but if they (House leaders) agree to it, it should not affect us at all.”
Sen. Hob Bryan, D-Amory, who has led several recent successful efforts to pass budget proposals over the objection of the Senate leadership, questioned the wisdom of focusing on when the session ends.
The focus, he said, should be on producing a budget that would not result in teacher layoffs and in cuts in other vital services.
He pointed out Congress is on the verge of passing legislation that could provide the state an additional $150 million or more in federal funds for its Medicaid program. That would free funds to be used in other areas.
“If these people were in charge of a Billy Graham crusade,” Bryan said, “they would feel that finishing on time was the most important thing and stop the invitations and send everybody home.”

Contact Bobby Harrison at (601) 353-3119 or bobby.harrison@djournal.com.