SID SALTER: Budget adoption nothing short of a miracle given economy

By Sid Salter

Lost in the headlines about the ongoing redistricting battle and the debate over the state funding construction of a civil rights museum is the absolute political and fiscal miracle that a $5.5 billion state budget was adopted.
Miracle? Well, yes, it is a miracle after a fashion. Given the general state of the national and state economies, the political pressures of an approaching state general election later this year and the bitter redistricting fight, the budget is somewhat miraculous.
Sure, state law requires the Legislature to pass a balanced budget. Sure, a budget gets adopted every year.
But throughout state government, the gloom and doom scenario that had been painted for the Fiscal Year 2012 state budget by and large wasn’t as bad as forecast.
Public education K-12 funding was down .73 percent or $16.6 million with $5.5 million coming in cuts to the Mississippi Adequate Education Program and some $6 million was cut from the ad valorem tax reduction. That cut will virtually guarantee local tax increases.
The state’s universities and colleges saw funding cut .96 percent or $6.8 million while the state’s community college system was actually increased $9.6 million or 4.31 percent.
Mental health funding overall was up 2.65 percent or $6.4 million. The state’s prison system was cut .62 percent overall or $1.9 million. The Department of Public Safety overall was cut .33 percent or $223,301, but funding for the Bureau of Narcotics, the state Crime Lab and the State Medical Examiner’s Office was increased marginally.
The Department of Environmental Quality was cut 3.04 percent or $339,149. The Mississippi Arts Commission was cut 1.12 percent or $18,765.
While limiting the budget cuts to far less than had been feared until very late in the budget process for higher education, mental health and other key functions, the state also passed a substantial bond bill to fund long-term construction and other infrastructure needs.
The controversial bond debt for a state museum of history and a civil rights museum passed Monday after Gov. Haley Barbour applied maximum pressure in the state Senate.
The rest of the budget process, for all the headlines, has been a rather Faulkneresque exercise in political sound and fury. On balance, this has been the most successful budget year for the Democratic House leadership of the Barbour era.
House budget negotiators got more of what they wanted in budget negotiations than they’ve gotten in a number of years. But that’s not a difficult circumstance to handicap. In election years, the Mississippi Legislature has traditionally been more likely to spend and to bond toward Democratic numbers than toward Republican numbers.
But in assessing the success or lack of it in state budgeting, there are two general definitions that are helpful for taxpayers. It’s surprising how misunderstood the terms are for many – and those terms are “budget shortfall” and “zero-based budgeting.” Josh Goodman, a writer for the Pew Center on the States, has crafted concise definitions:
– A budget shortfall is the difference between the amount of revenue a state expects to have for the next year or two and the amount it expects to spend over that time. If a state has more revenue coming in than it expects to spend, it has a surplus. If it has less, it has a shortfall. Shortfalls often are also referred to as “budget gaps” or “deficits.”
– Baseline budgeting projects future spending by looking at what states spent money on in the past. Some fiscal conservatives argue for a switch to “zero-based budgeting,” or essentially starting from scratch each year. Looking at state spending this way would mean that states would never have a shortfall per se. That’s because there would be no baked-in assumptions about what states expect to spend money on.
After the 2011 elections, Goodman’s definitions of “budget shortfalls” and “zero-based budgeting” are going to get a workout at the state Capitol unless the economy turns around in a significant fashion.
Sid Salter is a syndicated columnist. Contact him at (662) 325-2506 or ssalter@library.msstate.edu.