The Legislative Budget Office says agencies have submitted $101.1 million in deficit requests for fiscal 2017, which ends June 30. That is 1.6 percent of the state-funded portion of current budget of just under $6.4 billion.
It’s not unusual for a few agencies to submit midyear requests for more cash, and that’s partly because writing a state budget is a long process based largely on educated guesswork.
Lawmakers rely on experts to analyze economic trends and estimate how much money the state might collect each year from taxes, fees, lawsuit settlements and other sources of revenue.
Sometimes, collections fall short of expectations and result in midyear budget cuts.
Often, agencies receive less money than they request at the start of a budget year. Most agencies adjust to whatever money lawmakers give them, either by not expanding existing programs or by cutting services.
Midyear deficit requests typically come from agencies that are short-funded at the beginning of the budget year but have pressing demands that must be met. That appears to be the case this year.
The two biggest deficit requests now are $75 million for the Division of Medicaid and $14.4 million for the state treasurer’s office.
The Department of Finance and Administration, which oversees a large portion of state government buildings and property, is requesting $5.4 million for operations and nearly $4.8 million for property insurance.
The state Wireless Communication Commission is requesting nearly $1.5 million to maintain a public safety communication system. The state Commission on Judicial Performance is requesting $50,475.
Lawmakers have said for years that Medicaid is one of the most difficult budgets to write because some of the program’s services are mandated by the federal government and it can be tricky to know, months in advance, exactly how many people will be enrolled and how much they will use what’s available to them. Making more trips to the emergency room or filling more prescriptions adds up to more expense.
House Appropriations Chairman John Read, R-Gautier, told The Associated Press he hopes Medicaid can cut expenses to reduce its deficit request.
Erin Barham, spokeswoman for the state Division of Medicaid, said: “We continue to collaborate with our legislators and elected officials … to identify cost-saving measures.”
The deficit request from Treasurer Lynn Fitch is to help pay down the state’s long-term debt. Lawmakers generally agree it’s vital to make debt payments in full and on time to help protect Mississippi’s credit rating.
“We can’t allow the state to default and if we need to make other arrangements for payment, as the law provides, we’d need time to determine where and how we’d gather those funds,” said Fitch’s chief of staff, Michelle Williams.
Legislators began their session Tuesday and are scheduled to meet until early April. They have not said when they expect to consider fulfilling the requests or where they would find the money.
“We’re going to try to act on them, as needed,” Read said.
Lt. Gov. Tate Reeves said there’s no urgency to fill the deficits immediately: “I don’t see this as pressing.”
One option would be to take money from the state’s cash reserves, though financial markets frown on the depletion of those. The state has more than $200 million in its rainy day fund. Reeves said legislators also left $42 million unspent in a capital expense fund.
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