BILL CRAWFORD: Debt Service is Big Spending
Published: March 14,2014
What are the big spending categories in Mississippi’s General Fund?
Well, everybody knows education is number one. Education, which includes public schools, universities, community colleges, schools for the blind and deaf, vocational education, ETV and libraries, at $2.8 billion accounted for 56.6 percent of General Fund appropriations last fiscal year.
Eh, is Medicaid number two? Well, sort of. Social welfare includes Medicaid. At $737.9 million it accounted for 14.7 percent of the 2014 General Fund appropriations. Also included in this category are the Department of Rehabilitation Services and the Department of Human Services. Medicaid accounted for 78 percent of the appropriations in this category.
Is Corrections third? Nope.
Corrections spending at $334.6 million was fourth, totaling 6.7 percent of General Fund appropriations.
The third category is Debt Service — principal and interest paid on state general obligation bonds — which at $375.4 million totaled 7.5 percent of General Fund appropriations for FY2014. These payments service over $4 billion in outstanding general obligation debt.
Debt Service and outstanding bonded indebtedness don’t usually capture much public attention. For years the Legislature regularly passed multi-million dollar “Christmas Tree” bond bills for all sorts of projects. Lt. Gov. Tate Reeves changed that two years ago when he led the Senate to block the annual bond bill. Reeves said he is determined to reduce Mississippi’s dependence on debt.
Data indicates his approach has begun working. From 2000 through 2011, Debt Service nearly doubled from 4.6 percent of General Fund appropriations to 8.3 percent. Since Reeves took office in 2012, the percentage has dropped each year, down to 7.5 percent this past year.
This progress may be in jeopardy, though. The Mississippi House appears to be adorning a new Christmas Tree. Bobby Harrison of the Northeast Mississippi Daily Journal reports the House has passed a variety of bond bills totaling $431 million.
“We are a long way apart,” he quoted Reeves as saying.
Whether the Legislature passes a bond bill this year or not, new bonds will be issued. The state’s latest comprehensive annual financial report showed there are $958 million in bonds authorized by the Legislature but not yet issued. Little detail is provided in the financial report’s notes to show how much of this balance is pending versus how much is unlikely to be issued. But in the year no bond bill was passed, Reeve’s said over $100 million in bonds were issued.
If you’re interested in learning details about all these bonds, sorry. The best you’ll find is a general category list in the comprehensive annual financial report at the useful Department of Finance and Administration website: www.dfa.state.ms.us. The State Treasurer’s less useful website only lists recent issuances: www.treasurerlynnfitch.com.
If you’re interested in controlling state spending, you might ask your legislator why more information on bonds is not readily available.
Bill Crawford (email@example.com) is a syndicated columnist from Meridian.
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