By Bobby Harrison/NEMS Daily Journal
JACKSON – When the Legislature returns in January, it will have to deal with a budget hole of between $500 million and more than $1 billion. That number varies depending on who is defining exactly what a budget hole is.
As has been documented earlier, when Haley Barbour became governor in 2004, there was a budget hole. When he leaves office in January 2012, there will be a similar if not bigger budget hole.
In this instance, using Barbour’s 2003 definition, budget holes include the use of one-time money to pay for recurring state expenses. That eventually leaves a budget hole.
But the dirty little secret of state government is that, by using that definition, there seems to always be a budget hole. While one-time money is used more to plug budget holes during tough economic times, one-time money also is used in good financial times.
After Hurricane Katrina, when state revenue collections were growing by double digits because of the Gulf Coast rebuilding effort, there was one-time money used to balance the budget.
In the 1990s, when there was double-digit state revenue growth as the casino gambling industry went from zero to 60 overnight, one-time money was used for recurring expenses.
The fact is that the nature of state government finances is that one-time money comes and goes from year to year. True, the use of some one-time money is more problematic than the use of other sources of one-time money, such as the use of hundreds of millions of dollars designated for highway construction to fund other agencies earlier during the Barbour administration.
In reality, Barbour campaigned against using one-time money, but he has participated in the practice as governor. It is true, though, that the use of one-time money would have been more prevalent by the Legislature had he not been governor.
Even though Barbour used the issue of the state budget shortfall as an effective sound bite to win the governor’s office in 2003, unless he had brought the issue up, would the average person even had known there was a budget hole?
Whether schools are funded from recurring or from non-recurring money is really not an issue as long as they are funded.
It is when schools are not funded that there is a direct impact on the well-being of the state. Often that impact is not seen immediately but festers over time and affects generations of Mississippians.
And, of course, that already has occurred. Thanks to decades of neglect of the public school system, Mississippi is literally the poorest, unhealthiest and least-educated state in the nation.
Budget cuts to health care might have more of an immediate impact – as evidenced by the number of physically and mentally challenged children who have been denied Medicaid coverage. Even some of the state’s most fiscally conservative Republican legislators have expressed concerns about children who have been denied Medicaid coverage in recent months.
The trick in using one-time money is to limit its use to the amount that can be made up in future years by what is normally the natural growth in revenue collections. Admittedly, the state has just come through an unprecedented time where revenue collections actually decreased instead of grew.
That has put the governor and the Legislature in a difficult position where, perhaps, there were no easy or good answers to deal with the budget woes.
But, normally where the money comes from to fund schools, to provide health care for needy children, or to patrol the highways is not an issue that affects the average Mississippian. It is an issue when those things are not funded.
For too many years over generations, those things have not been funded adequately – as witnessed by our long-time standing as compared to the rest of the nation.
Contact Bobby Harrison, the Daily Journal’s Capitol Bureau Chief, at firstname.lastname@example.org or call (601) 353-3119.