Home » OPINION » Columns » BOBBY HARRISON: Mississippi’s funds shortfall probably won’t get Obama’s help this time

BOBBY HARRISON: Mississippi’s funds shortfall probably won’t get Obama’s help this time

BOBBY HARRISON

BOBBY HARRISON

In 2009-2011 when Mississippi revenue collections were hitting unprecedented lows, new President Barack Obama came to the rescue of Mississippi and  Gov. Haley Barbour, Lt. Gov. Phil Byrant, House Speaker Billy McCoy and the rest of the state’s political leadership.

The budgets passed by the Legislature and signed by the Republican Barbour during those years relied on a total of about $1 billion from the American Recovery and Reinvestment Act, better known as Stimulus funds, to offset the loss of state revenue.

During that period, thanks to the impact of what came to be known as the Great Recession, Mississippi revenue declined at a pace not seen in recent memory, leaving the state budget in chaos.

If not for the federal funds, the impact of the revenue shortfall on education, health care and many vital services would have been devastating. Even with the infusion of federal funds, records show more than 700 teachers were terminated during the time period to deal with the revenue shortfall.

In 2003, Barbour hammered and defeated incumbent Ronnie Musgrove in large part on the charge that  the incumbent was relying on one-time sources of revenue to fund recurring budget items.

Ironically, Barbour left office as the king of one-time money. Musgrove’s use of one-time funds to plug budget holes pales in comparison to what was done during the Barbour administration.

What the Republican governor came to  learn and accept is that in times of emergency using one-time money might be better than the alternative. And the Yazoo City native would argue forcefully that he tempered the then-House Democratic majority desire to use more of the state’s reserve funds, insisting that some of the funds be saved for what turned out to be an extended period of sluggish revenue collections.

In recent years, now Gov. Bryant, who following Barbour, and the Legislature’s  two presiding officers, Lt. Gov. Tate Reeves and House Speaker Philip Gunn, have bragged on their ability to eliminate the use of one-time money to fund recurring expenses in the state budget.

That boast has never been totally true since, under the definition Barbour used in 2003 when referring to Musgrove’s use of one-time money, the use of one-time money has continued into the current administration. In fairness, though, the use of one-time money probably has been at a historic low.

But with state tax collections slowing down, state leaders are having to make difficult choices. Various agencies already are talking about making cuts, perhaps, at a greater level than what was necessitated by the aforementioned Great Recession.

While in 2009 Barack Obama came to the rescue of Mississippi, the same is not likely to occur this time around.

In 2009, nearly every state in the nation was having to contend with dismal revenue collections. The stimulus package was passed to help multiple states deal with the revenue shortfall – not just Mississippi.

This time around, revenue shortfalls are not as widespread.

But in Mississippi a near perfect storm is occurring. The Legislature, at the behest of the leadership, already has cut taxes more than $300 million – primarily for businesses. It appears the tax cuts have negatively impacted state revenue revenue collections. And the phase-in of the largest tax cut in the state’s history will begin in two years, thanks to legislation passed earlier this year.

In addition, the state economy and revenue collections have been negatively impacted – at least to a degree – by the drop in oil prices.

The result is unless the recent trend of slowing revenue collections is reversed in the coming months, Mississippi budget leaders could face some tough choices.

They do have a sizable reserve to rely on, but rainy day funds can be gobbled up pretty quickly when trying to fund a $6 billion state-support budget.

And this time Barack Obama, who state leaders have historically lambasted while spending the money he helped to garner,  will not be walking though the door to save the day for Mississippi.

» Bobby Harrison is the Daily Journal’s Capitol Bureau Chief. Contact him at bobby.harrison@journalinc.com or call (601) 946-9931.

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