One-time money still a state budget fixture

By Bobby Harrison
Daily Journal Jackson Bureau
JACKSON – While legislative leaders and Gov. Phil Bryant have spoken of the need to reduce the use of one-time money to fund recurring expenses, the state’s reliance on one-time money has spanned numerous governors and legislative leaders.
Even during the 1990s when the state was experiencing double-digit revenue growth thanks to a new and burgeoning casino gambling industry, legislators were lamenting the use of one-time funds even as they passed bills to use those funds.
The term one-time money can mean many different things. In recent years, the state has scooped up money from various special fund agencies that operate on a specific fee or tax, such as the Department of Transportation which is funded through a fuel tax, to prop up agencies that are funded through more general taxes, such as the tax on income or retail items.
One-time money also can refer to the more than $100 million that the state gets each year as result of a lawsuit settlement with tobacco companies. The money is received annually, but is viewed as one-time money because by law it is not supposed to go to fund recurring expenses.
Additionally, by law the Legislature is not supposed to spend 2 percent of anticipated revenue each year. When the Legislature changes the law to spend the 2 percent set aside, it is identified as one-time money.
During the 2007 session, a high water mark for the state in terms of revenue collections and appropriations, the budget still included almost $280 million in one-time funds. The 2007 legislative session was a heady time as far as funding state agencies.
The Mississippi Adequate Education Program, which provides state funds to local school districts, was fully funded for only the second time since it was fully enacted in 2002 while school teachers and state employees received raises.
Universities and community colleges received a combined $132.6 million increase, or 18.8 percent.
It was an election year and politicians running for re-election (from the governor on down) bragged about the funding levels passed during the 2007 session.
When the 2008 session started, state leaders anticipated the record revenue collections that were used to fund the budget during the 2007 session would continue to increase. During the 2008 session, legislators and then-Gov. Haley Barbour approved even larger increases.
But later that fiscal year, the national recession hit, dramatically impacting state revenue collections and forcing budget cuts to below the level passed in the 2007 session.
Since then, budgets have been slashed, the cost of state employee health insurance has been increased and teachers and state employee positions have been eliminated. It is estimated more than 700 teacher positions have been cut.
The Legislature and governor also have relied on various sources of one-time money, including more than $900 million in federal stimulus funds, to offset the dramatic drop in state revenue collections.
State revenue collections are now growing, but “we are not out of the woods yet,” House Appropriations Chair Herb Frierson, R-Poplarville, said during a meeting this week of his committee where he informed members of the need to reduce the use of one-time money. “We are still going to have to be reducing some budgets or hoping for some increases in revenue to get back to a structural balance.”
With revenue collections growing, Frierson warned the committee that there would be pressure on them to use the additional funds to restore cuts that have been made in recent years.
He said there must be a balance between restoring those funds and reducing the use of one-time money.
But if the Legislature completely eliminates the use of one-time funds, it will be the first time in a long time.
bobby.harrison@journalinc.com

Bobby Harrison