Joe Rutherford 5/7/09 with chart as discussed, and photo of Barbour, if needed
Mississippi budgeting outlook
tightens painfully in near term
The Legislature this week faces the toughest decisions of the 2009 session as it decides how to seriously grapple with finalizing a 2010 budget and making necessary adjustments to the 2009 budget, which suffers from precipitously declining revenue.
Gov. Barbour released a revised executive budget proposal last week that paints a very grim picture for Mississippi during the next three fiscal cycles. Even those who disagree and have a different set of figures agree that the situation is grave.
These are Barbour’s basic figures:
* April state revenues were $90 million under the estimate;
* Revenue deficits (Mississippi cannot constitutionally have deficit spending) in 2010 and 2011 will exceed $400 million; and,
* 2012 will present the biggest crunch, with a revenue deficit of $500 million or more.
* Mississippi will receive about $2.8 billion in federal stimulus funds, but designated spending leaves only about $1.17 billion for other items, a gap of more than $350 million between needed spending and expected revenue.
There was a time in the memory of many Mississippians when such budget numbers would belong only to the federal government. We’re in a sea-change fiscal environment.
Barbour expects spending cuts of 6.3 percent in many state agencies in the 2010 cycle, but his figures predict k-12 education will get 99 percent of its 2009 funding in 2010.
The mere mention of education funding becomes controversial in tight budget debates, so we urge quick agreement among the two houses and the governor on this most important state priority. Mississippi must place urgent need on all its education endeavors – k-12, community colleges and the eight universities.
Education not only powers our future, it strengthens prospects for stronger recovery.
Barbour also counts on a $90 million assessment on hospitals to help adequately fund Medicaid – a controversial issue that has been around the track before. We have generally supported that path to Medicaid funding because it has a base in precedent, although some legislators and others disagree about that, too.
State Medicaid funds are matched on a 4:1 basis by the federal government, so a $90 million assessment could draw down $360 million, in Barbour’s math.
Further, Barbour counts on the $106.17 million revenue from the tobacco tax he is expected to sign into law, and which will take effect during the 2009 budget cycle. And, he wants an additional $30 million in higher taxes on smokeless tobacco and non-premium cigarette brands. We support that idea as well as higher taxes on cigars and pipe tobacco.
The goal is reducing smoking among adults and preventing adolescents and children from starting by making it financially out of reach. Nothing’s necessary or good about tobacco use.
Much of what happens on the 2009, 2010, and 2011 budget decisions will impact the 2011 political races for the Legislature, and all statewide offices.
Barbour will be in his final months as governor during the 2011 campaign, so blaming him for whatever situations develop may not have the resonance that might be possible could he seek a third term. He can’t.
The record is legislators’ to make, and time is pressing.
(Additional state financial information is available at the Web site www.governorbarbour.com)