Gov. Haley Barbour and key legislative leaders have decided the Legislature will have $4.6 billion to spend in fiscal 2013 that begins next July 1.
As usually happens, the figure could change dramatically before lawmakers complete the 2012 session in May. It represents the first framework for the budget — an estimate of how much money will be available.
The action taken yesterday by Barbour and the Joint Legislative Budget Commission reflects an estimated revenue growth of 0.7 percent over the current year.
Lt. Gov. Phil Bryant, committee chairman and governor-elect, says because of slow growth and other sources of one-time money that must be replaced, the 2012 session will be another difficult one.
“With the state economist saying we are more likely to be in a recession in Mississippi, we have to be very careful,” said Bryant. “We’re just gonna have to be very careful.”
State economist Darrin Webb, one of the experts who made the revenue estimate recommendation to legislators, said he fears economic troubles in Europe could throw a fragile U.S. economy back into recession. And he added the Mississippi economic recovery is even more fragile than that of the national recovery.
“It appears Mississippi’s slow growth makes the risk of recession substantial,” Webb said.
Rep. Steve Holland, D-Plantersville, a member of the committee, voted against the recommendation. He says based on revenue estimates thus far this year he believes the state economy is improving.
Unless the 2012 Legislature changes laws passed in previous sessions, at least $62 million of the estimate will be obligated to repay money taken from other agencies, such as the Department of Transportation, to help shore up shortfalls elsewhere in recent years as the state dealt with an unprecedented decline in revenue.
The Budget Committee also upped the revenue estimate for the current fiscal year by 1.3 percent to $4.6 billion, giving the state an additional $60 million. That money will be available to spend in the 2012 session.
Barbour said, “I accept the fiscal year 2013 number.” He them smiled and gestured to Bryant and said, “He has to fool with it anyway.”
Barbour did say he would release his budget recommendations for the 2013 fiscal year to be considered by the 2012 Legislature in the coming weeks. The Budget Committee also is supposed to release a proposal before the session begins.
The meeting was unusual because many of the participants will be in different positions in 2012, thanks to recent elections. Bryant will succeed Barbour. Treasurer Tate Reeves, one of the financial experts who made the revenue recommendation, will be the lieutenant governor. And with the Republicans gaining control of the House, many of the current Democrats on the committee are likely to be replaced.