By Bobby Harrison
Daily Journal Jackson Bureau
JACKSON – Gov. Phil Bryant is proposing the state increase spending on repair and renovation while incurring less debt for construction needs.
In his budget proposal to be presented to the 2014 Legislature in January, the first-term Republican governor proposes dedicating $70 million “for capital needs” at universities, community colleges and on state office buildings.
The money would be used to fund repair and renovation projects. In the past, as legislators and the governor dealt with budget constraints, such projects often were financed through the sale of bonds that were sold off over time, often 20 years.
State officials have long conceded that it did not make sense to fund such projects through bonds that often took longer to pay off than the repairs lasted.
Bryant is proposing that general funds be set aside each year for such projects and that the fund be increased $5 million annually until it reaches $90 million.
Bryant said the adoption of the first year of the proposal “is projected to save the state nearly $45 million in debt service costs as a result of bond avoidance. If fully implemented, the five-year plan is projected to save Mississippi more than $256 million in debt service as a result of bond avoidance.”
In the past, Lt. Gov. Tate Reeves also has been an outspoken advocate of reducing the size of the annual bond bill approved by the Legislature.
In 2012, Reeves blocked passage of a bond bill because he thought it was too big.
Under Bryant’s five-year plan, the size of the cash fund would be increased to $90 million while the size of the bond bill for longer-term capital needs would be reduced from $210 million for the upcoming 2015 fiscal year, which starts in July, to $150 million in the 2019 fiscal year.
Bryant said annual bond issues of $150 million is “a sustainable level.”
During the 2013 session, the Legislature passed a bond package totaling $196 million. The bond bill passed by the 2013 Legislature also included language stating it was “the intent” of the Legislature to commit to three years of bonds at the level recommended by the Department of Finance and Administration for the universities.
The recommendation for DFA is for the Legislature to issue $92.4 million during the 2014 session and $68.6 million for the 2015 session for the institutions of higher learning for a total of $257.5 million, including the $96.5 million approved by the Legislature in 2013.
The bond projects include an expansion of the University of Mississippi Medical School in Jackson and a new science building at the main campus in Oxford. At Mississippi State, the projects include a library expansion.
The bond bills would be in addition to the cash Bryant wants to set aside for more routine repair and renovations.
Another major project the 2014 Legislature is expected to be asked to address through bonds is funds to complete construction of the Museum of Mississippi History and Mississippi Civil Rights Museum in Jackson.
The focus on a pay-as-you go approach for much of the state’s repair and renovations comes after Fitch credit rating agency earlier this month gave Mississippi’s bond rating a negative outlook. If Fitch dropped the state’s rating, it could result in higher interest rates to pay off debt.