The words don’t inspire confidence, but analysts are using them to label the outlook for state budgets across the country.
The description is apt in Mississippi, where tax collections sputtered during the budget year that ended June 30 and expectations are less than rosy for the new year that started July 1.
The new report about states’ financial prospects comes from the Nelson A. Rockefeller Institute of Government at the State University of New York.
“The recent slowing of revenue growth, combined with a volatile and weak stock market and turmoil related to Brexit, suggests that the outlook for state budgets in the 2016-17 state fiscal year, which begins on July 1st in 46 states, has become gloomier and more uncertain,” wrote Lucy Dadayan, who’s a senior policy analyst, and Donald J. Boyd, who’s director of fiscal studies at the institute.
Mississippi limped through fiscal 2016 after Republican Gov. Phil Bryant made two rounds of spending cuts and pulled money from financial reserves to cover expenses.
For fiscal 2017, many agency heads don’t know exactly how much money they’ll be able to spend because of a bill legislators passed this year called Budget Transparency and Simplification Act. The act attempts to sweep some special funds – fees that are collected for specific purposes – into the general state budget and to do away with the practice of some agencies paying others for things like rent and computer services.
One of the longest-serving state senators, Democrat Hob Bryan of Amory, says the Transparency and Simplification Act is neither transparent nor simple.
“The problem is that no one can explain which special funds were eliminated and which ones weren’t. No one can explain which assessments were ended and which ones weren’t. No one can provide a document showing how these changes affect each agency,” Bryan wrote in the Daily Journal.
Senate Appropriations Committee Chairman Eugene “Buck” Clarke, R-Hollandale, told the Associated Press that he believes the changes will work. And, if there are problems, Clarke said legislators could consider changes once the next regular session starts in January.
The Rockefeller Institute report notes that Mississippi tax collections declined three-tenths of 1 percent from October to December 2015 compared to same period in 2014. While collections from personal income taxes increased, that was more than offset by decreases in sales taxes, fuel taxes and corporate income taxes.
Gov. Bryant called legislators into special session just before the end of June to get their permission to take more money from the state’s financial reserves to cover shortfalls as the 2016 budget year ended. While senators quickly approved his request, House Democrats kept their chamber in session an extra day so they could vent about being excluded from the budget-writing process.
In his final act as House Appropriations Committee chairman, Republican Herb Frierson of Poplarville, fielded hours of questions and criticism.
“Your party leadership could write the budget, my party leadership could write the budget and the other side could pick it apart,” a visibly exasperated Frierson told Democrats at one point. “You’ll never write a perfect budget.”
True enough. Budget writing is an art and not a science, based largely on the best educated guesses from financial experts about how much money the state might collect in any given year.
Frierson began his new job July 1 as head of the state Department of Revenue, and in that role he will be on the five-person revenue estimating committee – a job that brings the shadow of “gloomier and more uncertain” state budgeting.
BEFORE YOU GO…