BOBBY HARRISON: Barbour’s got a budget hole by his own earlier definition

JACKSON – Mississippi’s next governor, who will take office in January 2012, could complain that his or her predecessor left the state in a financial mess – with a budget hole of more than $550 million while at the same time cutting public education and health care.
That is what the next governor can say if current-Gov. Haley Barbour’s budget recommendation, which he released earlier this week, is adopted during the 2011 legislative session.
In releasing his budget recommendation, Barbour, standing in front of the state’s media, said in his authoritative Southern drawl, “I do not intend to leave my successor financially in the type of budget shape I was in when I came here.”
It’s a good sound bite, especially for someone who might run for president. Barbour, entering his eighth year as governor, is still quick to blame his predecessor, Ronnie Musgrove, for all the ills facing the state.
But the argument can be made that the Republican Barbour has nothing on his Democratic predecessor when it comes to budgeting.
Barbour is fond of saying the state had “a $720 million budget hole” when he took office in January 2004. “It took some difficult decisions about how to spend taxpayer dollars more efficiently, but we erased that deficit and balanced the state’s budget,” the governor writes in his budget narrative.
State law requires the budget to be balanced. It was balanced when Barbour took office, just as it has been during his tenure.
What Barbour describes as a budget hole is primarily the use of one-time money to fund recurring expenses. Using his definition of budget hole, the state has continued to have one – even during the years after Hurricane Katrina when state revenue grew by double digits.
Using his definition of budget hole, the current budget has one of about $800 million.
Barbour was quick to point out at his recent news conference that under his budget proposal for the upcoming fiscal year he would leave office with reserve funds of $185 million for the next governor and Legislature.
That money can be found in several accounts, but primarily the Working Cash Stabilization Fund, Tobacco Trust Fund and Hurricane Disaster Fund. Barbour also is quick to point out that the Working Cash Stabilization Fund, known as the Rainy Day Fund, was empty – bone dry – when he took office.
That is true. But Musgrove gave legislators a choice in the 2003 session – either leave money in the Rainy Day Fund or spend only 98 percent of the projected revenue to ensure a cushion in case revenue did not meet projections.
When they did neither, Musgrove vetoed the legislation. His veto was upheld, and legislators came back and appropriated only 98 percent of the revenue, in effect leaving a reserve of about $72 million. Barbour spends 100 percent of the projected revenue in his budget.
Plus, when Musgrove left office, there was more than $630 million in the Tobacco Trust Fund, according to annual reports produced by Treasurer Tate Reeves’ office, and it was on target to be more than $1 billion in a few years.
If Barbour’s budget is adopted, there will be about $50 million left in the Tobacco Trust Fund when he leaves office.
Plus, when Barbour took office, education was fully funded. Under his current budget proposal, it will be as much as $300 million short of full funding..
This has all been done while raising taxes twice under Barbour – on cigarettes and on hospitals – and while receiving more than $1 billion in federal stimulus funds over a four-year period to plug budget holes.
True, times are tough and Haley Barbour has had to make budget concessions. The decline in state revenue collections has been historic – perhaps the worst since the Great Depression in the 1930s.
For the record, there also was a historic drop in revenue collections during the four-year period before Barbour took office.
No doubt, Barbour has been the major force in holding down spending. Some would argue that more one-time funds should have been spent in recent years to offset cuts to education and health care. Barbour has been the major force in preventing that from happening – for better or worse.
But truth be known, the budget picture was bleak when Barbour took office. It is bleak now and unless there is a dramatic improvement in the national economy, which is perhaps possible, the budget situation will be bleak when he leaves office.
That is not necessarily Barbour’s fault – or the fault of anyone else in the state.
But perhaps the same could be said about 2004.

Bobby Harrison is Capitol Bureau reporter for the Daily Journal. Contact him at (601) 353-3119 or bobby.harrison@djournal.com.

Bobby Harrison/NEMS Daily Journal