First is that Gov. Haley Barbour's Division of Medicaid says it has a $34 million deficit - even though there are only two weeks left in the fiscal year. Second is the announcement that the Transportation Commission says it is about to terminate all road construction projects.
The Transportation Commission reported it would terminate all construction contracts unless a budget is approved before midnight June 30.
Rep. Cecil Brown, D-Jackson, said Attorney General Jim Hood has told him that he would go to court to try to keep vital state services, such as prisons, operating in the event a budget is not passed. But Brown said there is probably no way to keep road construction on schedule if an agreement is not reached.
If road construction is halted, "you are talking about thousands of jobs in the local sector. It would affect every community. You're talking about construction projects throughout the state."
To further complicate issues, Barbour's office informed budget negotiators that its Division of Medicaid faces a $34 million deficit with only two weeks to go in the fiscal year.
"It is very frustrating," said Lt. Gov. Phil Bryant. "I wish we had gotten that information earlier. It is an example of how difficult this process is. You think you have solved many of the problems and then you learn you have a $34 million shortfall and you have to re-adjust again."
Brown said he hopes Barbour, who has been on an economic development trip to Paris after a trip to New York, can shed light on some of the issues when he returns today.
Even with bad news, Bryant said he is optimistic that significant progress had been made in agreeing on a budget to fund the upcoming fiscal year, which starts July 1.
"We came up with some numbers - hopefully some final numbers - that the House is reviewing now," said Bryant, who presides over the Senate. "Hopefully we are very close to agreeing on a budget, minus Medicaid.
"That would be a big step in the right direction."
Medicaid will not be an easy issue to solve. House and Senate leaders must work out an agreement on how much - if any - to increase the tax on hospitals to help fund Medicaid. Democratic House leaders have been reluctant to pass any tax increase, but have offered $57 million. Barbour has said unless the tax increase is $90 million he will veto the budget or parts of it.