When it comes to the state’s budget problems, key legislators and Gov. Haley Barbour agree on at least one thing – something needs to be done quickly about the shortfall in revenue.
The problem is, they can’t agree on how to deal with the issue.
And that means a quick resolution is unlikely.
State revenue collections are expected to fall between $340 million and $450 million short of the amount budgeted last year for the current fiscal year, which ends June 30.
Because of that shortfall, Barbour already has cut the state budget by $225 million.
But he has said $215 million more in cuts are needed in the current fiscal year to ensure a balanced budget.
Others believe the additional required cuts will be closer to $150 million. But all agree that the longer the cuts are postponed, the more difficult they will be to make.
“The sooner you make the cuts, the easier they are to deal with,” said Dan Turner, a spokesman for Barbour. “When you start compressing the time, it just amps up the difficulty in dealing with the cuts.”
In short, it is easier for an agency to cut 5 percent of its budget with six months left in the fiscal year than it is with four months or less.
“When it comes to budget shortfalls,” said Senate Appropriations Chair Alan Nunnelee, R-Tupelo, “the earlier in the fiscal year an agency can deal with cuts, the better. That is why it is important to get something done quickly.”
His counterpart in the House, Johnny Stringer, D-Montrose, said that is why he passed out of his Appropriations Committee last week – during the opening week of the 2010 session – a bill he thought would help Barbour by giving him additional flexibility to make cuts.
But Stringer says now he will not take up the legislation because it is opposed by Barbour and House Republicans.
Stringer said he is working on another plan, “but I am not going to let them know about it in the newspaper.”
Nunnelee said he plans for his committee to take up legislation next week that gives the governor the authority he wants to make cuts.
Under current law, when revenue collections do not meet projections, the governor can cut any agency up to 5 percent. But he cannot cut any agency more than 5 percent until he cuts all agencies 5 percent.
Plus, if he takes more than 5 percent, the cuts must be the same percentage for all agencies.
Barbour wants the authority to make cuts of his choosing up to 10 percent.
Barbour already has trimmed $225 million. To make the additional needed cuts, he said, he would have to take money from areas like debt service, which the state is legally obligated to pay, and items the state must fund because of court orders.
The bill Stringer passed out of his committee would have exempted those items from the cuts.
“I thought that is what the governor wanted,” Stringer said.
Turner said Stringer’s bill does not give the governor the flexibility he needs to make the cuts.
In a letter, House Education Committee Chairman Cecil Brown, D-Jackson, said he opposes letting Barbour take up to 10 percent from agencies of his choosing because he fears the governor would focus solely on education.
“Throughout his term in office, Gov. Barbour has attacked the education budgets,” Brown wrote.
“While we agree that these are difficult times and education must bear its share of the load, we are not willing to allow this governor, any governor, to gut the education budgets.”
Brown said the governor should work with the Legislature “to reach a compromise on the budget cuts that will address his concerns without devastating our public schools and universities.”
Barbour was criticized by some for his first round of cuts earlier this fiscal year when he took $172 million from the budget, with $158 million coming from education. Later Barbour made an additional $53 million worth of cuts in other areas.
He said at the time that education could absorb the cuts because it received additional federal stimulus funds. But educators said the federal funds were, for the most part, earmarked for specific areas, such as special education, and could not be used for the day-to-day operations of schools, such as teacher salaries.
When asked how Barbour would deal with education if he had the 10 percent authority, Turner said, “I don’t know where the cuts would be from.”
Wherever they come from, Nunnelee fears layoffs will follow. He said it is difficult to cut the state budget by about 8 percent – as needed – without targeting a reduction in personnel.
“The grim reality is the most expensive item in any budget is personnel,” Nunnelee said. “I am not convinced you can achieve $400 million in savings without a reduction in personnel.”
Brown pointed to other options, such as taking money from the rainy day fund, which currently has about $260 million in it. Other potential sources of money are more than $200 million in the tobacco trust fund, plus $60 million in unallocated federal stimulus funds.
Contact Bobby Harrison at (601) 353-3119 or email@example.com.
Bobby Harrison/NEMS Daily Journal