Budget negotiators split on money set-aside

JACKSON – The disagreement between House and Senate budget negotiators has been crystalized to one primary issue – the Senate negotiators want to save $60 million for future budget years. The House negotiators do not.
On Friday, lead Senate negotiator Alan Nunnelee, R-Tupelo, said, “The issue is whether to make difficult choices today in order to avoid an impossible dilemma in the future.”
House negotiators say the choice Nunnelee is asking them to make – to set aside $60 million for the budget year beginning July 1, 2010 – would result in between 2,000 and 4,000 state employees losing their jobs.
“They are talking about laying off doctors and nurses, cutting the state Department of Health when we have a swine flu epidemic,” said Rep. Johnny Stringer, D-Montrose, the lead House negotiator. “They are talking about laying off Highway Patrol troopers. The House refuses to do that.”
Nunnelee said there is a need to save $60 million this year because the budget situation is predicted to be even worse for the 2010 Legislature as federal stimulus funds used this year to plug budget holes run out.
In response, Stringer handed out a sheet that showed nearly $1 billion in state reserve funds – in a rainy day fund, Katrina relief fund and Health Care Trust Fund – that could be used in 2010. And in a worse-case scenario, Stringer said people could be laid off in 2010, if the budget situation remains dire, but there is no need to cut employees now.
House and Senate budget leaders are expected to work during the holiday weekend in advance of the full Legislature returning on Tuesday with hopes of voting on an agreement for the $5 billion budget.
On Friday, they did agree to give up on increasing the taxes on hospitals. Stringer said he did not want to increase the tax on hospitals, but would agree to a $60 million tax if Nunnelee would agree to restrict the Division of Medicaid from cutting payments it makes to hospitals for treating Medicaid patients.
Nunnelee, who favors a $90 million tax on hospitals, would not agree to that offer so Stringer said it would be best to take the hospital tax off the table and work on building a budget without it.
The new budget year starts July 1. If there is not an agreement soon, local school districts will be in a difficult situation, state Superintendent of Education Hank Bounds said.
“It is critical we get an appropriations bill,” he said. “Districts have to contract with teachers. They have to know how many teachers to hire. Plus, there is the length of the budget process they must go through.”
Bounds said it will be hard for local school boards to build a budget by July 1 if they do not know how much in state funds they will receive.


Bobby Harrison/NEMS Daily Journal

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