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Report on state revenue completion lagging

Tate Reeves

Tate Reeves

By BOBBY HARRISON

With the month of September quickly approaching, the report detailing Mississippi revenue collections for the month of July is still not complete.

Normally, the staff of the Legislative Budget Committee has the monthly reports completed within a few days of the end of the month.

But the July report has created unique problems. Debbie Rubisoff, director of the Budget Committee staff, said changes made to the method of collecting state revenue during the 2016 legislative session is having to be incorporated into the July report – the first of a new fiscal year.

“Senate Bill 2362 of the 2016 legislative session impacted the general fund by requiring that various funds previously designated as special funds now be deposited into the general fund,” Rubisoff explained in an emailed response. “This is a big change to the revenue reporting process, and since July is the first month in this new process, it’s simply taking us more time to adequately review collections.”

Senate Bill 2362 is the Budget Transparency and Simplification Act, which has been anything but simple and transparent thus far for state officials dealing with the budget and revenue. The legislation transfers some special funds, derived from levying fees or assessments to pay for specific programs, into the state general fund and, instead, funds those specific programs out of general tax collections. In addition, the legislation stops the practice of state agencies charging other agencies for the services they provide.

Senate Appropriations Chair Buck Clarke, R-Hollandale, and Lt. Gov. Tate Reeves, the lead advocates of the legislation, said it would give the Legislature more oversight of the budgeting process by placing the special funds in the general fund, giving legislators the final say on the level of funding of some of the special fund agencies. In addition, the bill is meant to provide additional general fund revenue to shore up sluggish tax collections.

But others said the legislation had unintended consequences. Soon after the 2016 session ended in April, Reeves and House Speaker Phil Gunn, R-Clinton, conceded that the legislature spent $56 million more than it should because it overestimated the impact Senate Bill 2362 would have on revenue collections.

Plus, Attorney General Jim Hood said because of the way the legislation was written about $80 million in special funds that legislators thought would be transferred to the general fund would not be. In an official opinion, the attorney general said those funds had to remain in special fund accounts and would not be available to spend on general fund programs.  Reeves and others criticized the AG’s ruling, which does not carry the weight of law, but provides protection from lawsuits for public officials who adhere to it.

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State Fiscal Officer Laura Jackson, who handles the day-to-day disbursement of funds to state agencies, has said in published reports she would follow the AG’s opinion.

As a result of the $56 million overestimation and of the attorney general’s opinion, the state is entering the new fiscal year already in a hole of about $130 million.

In addition, while the revenue report has not been completed, various reports indicate general tax collections on income, retail items and other items is $14 million short of projections for the month of July. This comes after a fiscal year where the state collected less revenue than the previous year for only the fourth time since 1970.

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One comment

  1. Mary Jane Westerlund

    What horrible ineptitude from Tate Reeves and Buck Clarke, among other key legislators supporting them in their attempts to legislate “transparency and oversight.” $56 million overestimated here, $80 short million there – all miscalculations that resulted in the state budget being $130 million short in 2016. These men would be fired for incompetence in a business environment and Mississippi voters should make sure they are not voted back in office when that opportunity arises.

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