Budget hangups stretch for miles as session starts

JACKSON – Legislators will be staring at a stretch of budget problems as far as their eyes can see when the 2010 session opens Tuesday.
They will be dealing not only with what could be additional cuts of as much as $150 million in the budget for the current fiscal year, but with what Gov. Haley Barbour calls a “structural shortfall” of $715 million in the budget for the upcoming fiscal year and of $1.2 billion for the following year.
The problems stem form an unprecedented decline in state tax collections, which many predict Mississippi will not recover from until 2013 or beyond. For 15 consecutive months, revenue has come in less than the official projection.
House Speaker Billy McCoy, D-Rienzi, often says developing a budget is the most important endeavor facing the Legislature each session.
This year – probably more so than ever – most everything the Legislature does will revolve around developing a budget.
The dramatic proposals Barbour unveiled in November, such as merging universities, consolidating school districts, closing mental health hospitals and combining some state agencies, are supposed to save the state money, though many question the degree of savings.
Also in question is how much success Barbour will have in moving his more controversial proposals through the legislative process.
“I don’t know if we will do everything the governor requested,” said Senate Appropriations Committee Chair Alan Nunnelee, R-Tupelo. “I don’t know if we will do anything he has requested. But he has given us a baseline.”
Nunnelee said Barbour’s proposals emphasize the governor’s belief that because of the budget woes “it can’t be business as usual.”
Whether or not Barbour’s proposals are adopted, much of the 2010 session will deal with at least two years’ worth of projected budget difficulties.
“I think the budget is for the most part what we need to be working on,” said Rep. Jerry Turner, R-Baldwyn. “It will take precedent over everything.”
“The only thing I am interested in is arriving at a realistic budget – something we can count on and something the people can count on.”
Turner said he did not want to pass a budget that exceeded revenue and that would have to be cut later.
Rep. Steve Holland, D-Plantersville, said, “We have to minimize the damage to our people. We have a conservative government and always have had. But when you have these kind of draconian cuts, they cut into quality of life from education to health care. It is sad.
“I will fight with every fiber in my body for maximum protection for our people.”
Budgets proposals submitted by both Barbour and the legislative leadership of both chambers make dramatic cuts to most state agencies. All have said the possibility of state employee layoffs exist, though there are hopes that job losses can be avoided.
The situation would be even worse if not for American Recovery and Reinvestment Act funds that are plugging budget holes.
More than $500 million in stimulus funds are being used in the budget for the current year, and hundreds of millions will be plugged into the budget for the fiscal year beginning July 1. But those funds will start running out in some programs at the end of December 2010 and will run out for most all programs by July 1, 2011.
That in part explains what Barbour has called the “structural shortfall” of more than $1.2 billion for the budget year starting July 1, 2011.
The mergers and other most other cost-saving proposals Barbour has made are designed to take effect during that budget year.
“The Legislature may not accept all these recommendations,” Barbour wrote in his budget proposal. “Indeed, I welcome its alterations and additions … We must all accept that for a few years it cannot be business as usual with any budget.”
House Education Committee Chair Cecil Brown, D-Jackson, said that if education funding is cut as much as it appears it might be, “we are going to find ourselves with 60-65 school districts not able to make payroll.”
At a minimum, Brown said, the Legislature needs to relax some state laws to provide districts additional flexibility and free them from certain state mandates.
Last year the Legislature did not settle on a budget until hours before the new fiscal year began July 1 – far past its scheduled early April deadline to reach agreement. This year Lt. Gov. Phil Bryant has proposed shortening the session from 90 to 60 days.
Some say his idea is questionable, given that many believe this session will be more difficult than last year’s.
But last year members and the governor haggled over how much to increase the tax on hospitals. Plus, a final budget agreement was delayed in part to determine how the federal stimulus funds could be used.
The hospital tax was resolved and is not expected to be an issue this year. And legislators know how to use the federal stimulus funds.
“I feel we have ‘X’ amount of money to spend,” said House Appropriations Committee Chair Johnny Stringer, D-Montrose. “We will have to spend it and go home.”
But disputes are expected, possibly over the use of the state’s rainy day fund. The fund currently stands at more than $250 million.
The proposal released by the legislative leadership relies on various sources of money totaling about $150 million more than Barbour used in his budget plan.
Plus, the usual political bickering will surface. House Republicans already have issued statements saying they do not get enough input into the budgeting process.
“They have input,” said Rep. George Flaggs, D-Vicksburg. “They have members on the Appropriations Committee – senior members. They can offer amendments in the committee and on the floor. In fact, if someone wants to offer the governor’s budget on the floor they can do it.”

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

Bobby Harrison/NEMS Daily Journal