Magnolia Marketplace

The Mississippi Legislature starts the 2010 session Monday. When last we saw them, lawmakers were trying to reach a budget agreement before the new fiscal year started.

The tax on hospitals to help pay for the state’s Medicaid program was the major hold-up to a deal being reached late last June. When lawmakers start serious negotiations for the budget  year that begins next July, they’ll probably wish a hospital tax was the only thing they  had to grapple with.

Like last session, this one will be dominated by how to spend the state’s ever-dwindling revenue. Tax increases and the two proposed university mergers seem to have no shot at getting anywhere. With massive deficits expected the next two budget years, there will have to be some politically excruciating decisions made on how — or if — to fund some of the state’s functions.

The 2011 elections looming only adds to the drama. It all starts Monday.

Until then, enjoy your New Year’s Eve parties.

Apologies for the extended neglect of the blog. With the Holidays switching up the schedule here at the MBJ, we’ve had to cram two work weeks into one. That’s not a complaint, because it means we’re getting a few days off to do the Christmas routines, watch bowl games, drink eggnog and watch more bowl games.

Big things happened in 2009. Some good, some not good, some pretty bad. We took a look back in this week’s edition. Next week, we’ll look forward with some predictions for 2010 from some of the state’s business and political experts. There’s a surprise or two in there. Look for it.

In that vein, some personal predictions from Magnolia Marketplace:

• The legislative session that starts in a couple weeks will be wild and woolly.

• And despite what each party’s leadership says now, the state’s budget for fiscal year 2011 will not be done by the end of March, though we’d love to be proven wrong.

• No state agency will be happy with its appropriation for FY2011.

• In fact, many agency heads will cry bloody murder.

• Gov. Haley Barbour’s proposal to merge the three HBCUs into one will get absolutely nowhere in the Legislature, but that’s not going out on much of a limb.

• The Congressional campaign between Republican State Sen. Alan Nunnelee and Travis Childers, the Democrat from Booneville who represents the First District, will be a humdinger, with the national committees from each party pouring lots of money into it.

• The tone of the campaign will be exceedingly nasty.

• Toyota will announce it is ready to move forward with the Blue Springs plant.

• By this time next year, we’ll have a much clearer picture of the gubernatorial candidates for 2011, particularly on the Democratic side.

• On Jan. 2, Jevan Snead will throw at least one interception in the Cotton Bowl.

• Magnolia Marketplace will hit the ceiling when he does.

To you and yours, Merry Christmas. We’ll see you Dec. 28.

Just got out of a lunch gathering in Downtown Jackson Partners’ new marketing center, where DJP President and CEO Ben Allen performed one of his patented, high-energy routines.

But the biggest news came when Jackson Developer David Watkins, whose  King Edward project is set to open this week, took the floor and laid out what would be the most ambitious economic development undertaking Jackson has seen in several decades, maybe ever. Basically, it involves a mile-long, concrete-lined canal that winds through downtown from its beginning at Farish Street, also a Watkins project, and ends in a 35-acre lake on Court Street that connects to the Pearl River. One side of the lake would feature a mix of apartments and condos. A gospel music museum and a civil rights museum, which is currently planned to go up at Tougaloo College, have been thrown out as possibilities at the canal’s Farish Street beginning.

Did we mention it was ambitious?

Anyway, Watkins said the Riverwalk Canal and Town Lake is in the extremely early planning stages. His best estimate at a cost is $200 million, which would have to include public money probably in the form of bonds. Watkins said the project could be done in four to six  years, but admitted it would probably take “10 or 12″ to actually complete once the Jackson Redevelopment Authority and the City of Jackson take it over. Watkins hopes to turn it over the city some time in the next 30 days.

There would have to be some property acquisition to make this happen, plus the environmental impact studies and flood control issues. Those processes can bog down pretty easily.

We’ll have a more detailed look at this in our E-Bulletin Thursday morning. For now, we have to wrap some things up for next week’s paper edition of the MBJ.

Jackson Attorney Steve Seale was in the audience yesterday when Alan Lange and Tom Dawson, the authors of “Kings of Tort”, talked about their new book at the Stennis Capitol Press Corps luncheon.

As Magnolia Marketplace reported here, Seale had some pretty strong words for Dawson, who was the lead prosecutor in the judicial bribery cases that led to Dickie Scruggs being hauled off to prison.

Anyway, Seale was a little upset because I didn’t talk to him afterward to get a completely clear picture of what he meant before I posted the original entry. Fair enough.

So after a 15-minute phone conversation with Seale, here’s what we know:

Seale said he has no problem with Dawson writing a book about the Scruggs cases per se. The issue is Dawson profiting from work he performed while he was a federal prosecutor. (Dawson has since retired from the post.)

“I think a prosecutor should be held to a higher standard,” Seale said.

The client of a U.S. attorney is the general public, Seale said, and any profit gleaned from serving that client should come with the client’s permission.

For his part, Dawson writes in the Reading Notes and Acknowledgements section of “Kings of Tort”: “Bar associations recognize the absurdity of obtaining permission of all citizens of the country in releasing case information, and generally leave it to the author to use common sense.”

Dawson also said that he adhered to Rule 6(e) of the Federal Rules of Criminal Procedure regarding nondisclosure of matters before a grand jury. “Any reference to grand jury testimony is derived from transcripts publicly filed by criminal defendants in their own motions and responses,” Dawson writes. He goes on to write that he did not divulge any federal prosecutor trade secrets, and chose not to quote directly in the book Department of Justice officials or defense lawyers.

The monthly luncheon of the Stennis Capitol Press Corps is usually a calm affair. A speaker gives a presentation, takes a few benign questions from the audience and everybody heads back to the office. Controversy and consternation are rarely on the menu.

That was not the case today.

Alan Lange and Tom Dawson were today’s keynotes. The two have written a book — “Kings of Tort” — that chronicle the judicial bribery cases that have landed Dickie Scruggs, Paul Minor and a  handful of former plaintiffs’ attorneys in prison. Lange, publisher of yallpolitics.com, and Dawson, who was lead prosecutor for the U.S. Attorney’s Office in Oxford in the Scruggs cases, listed as their primary reason for writing the book the need for a data-driven, fact-based narrative about the corruption cases that have brought down some pretty powerful people. MBJ Staff Writer/Researcher Stephen McDill takes a look at the book here.

When Lange and Dawson opened the floor for questions, the first hand that went up belonged to Steve Seale, an attorney with Wise Carter Child and Caraway in Jackson. He shook his head in the universally recognized symbol for “no” a lot during the time Lange and Dawson were at the podium.

Seale took issue with Lange and Dawson’s assertion that they wrote the book purely to provide a blow-by-blow account of the Scruggs and Minor proceedings, and suggested that their motives had more to do with money than posterity.

“You would never had been heard of (without the notoriety of the Scruggs case),” Seale told Dawson. “You wrote it because it was Dickie Scruggs, you wrote it because it’s Mississippi, you wrote it because it’s corruption and that kind of corruption is something the public is always going to pay attention to.”

Seale then challenged the notion Dawson had that Judge Henry Lackey, who blew the whistle in the Scruggs deal, the FBI agents who investigated the case and the judges who presided over it were heroes.

“These are people who should do what they did because it’s their job.”

Seale also seemed offended at Dawson’s opinion that the legal profession had been damaged by the case.

“It’s been damaged only by people who didn’t do what they were supposed to do.”

Seale is a former chief counsel to former Sen. Trent Lott, who is Scruggs’ brother-in-law. It’s not a stretch to say that his opinion of the subject matter of “Kings of Tort” is influenced heavily by that fact.

For his part, Dawson said personal profit “was not the moving force behind the decision to write this book. I want a historical record out there of what happened. This was not a routine bank robbery. This was not some dope gang doing drive-bys. These were some of the most powerful people in this state, maybe beyond. They had the ability to destroy lives and attempted to do so. I don’t think you can discount the fact that so many people stood up and did the right thing. A lot of people would have backed away from this.”

Dawson did say that he “certainly hoped” that the book would sell well.

After Seale and Dawson went back and forth, Dawson talked a lot about the beginning of the undercover investigation kicked off after attorney Timothy Balducci attempted to bribe Lackey, who then reported the attempt to the U.S. Attorney’s office.

“The most amazing thing is we kept this thing secret for eight months in a town like Oxford,” said Dawson, who has since retired from the Justice Department.

When it was over several members of the audience paid $27.95 for a copy of the book. In one of the most ironic things Magnolia Marketplace has ever seen, Seale was among them.

To the surprise of nobody, the major announcement Gov. Haley Barbour had for the FY2010 budget this afternoon was that he was reducing it by $54 million.

This is the second time Barbour has had to trim spending since the fiscal year started July 1. In September, he slashed $172 million, mostly on education. Today’s announcement brings the total amount of cuts for FY2010 to $224 million.

Today’s action hit agencies that already had built-in cuts from FY2009 to FY2010. Those agencies were exempt from the September cuts. State law does not allow Barbour to cut any agency more than 5 percent until every agency has been cut at least 5 percent, so the agencies that escaped in September fell under the axe today.

They include the Division of Medicaid, which Barbour cut by 5 percent, or $19.2 million. The Department of Corrections, which was held harmless in September, was cut 1 percent ($3.2 million). Aside from corrections, debt service and court-ordered portions of the Department of Rehabilatation Services, the Department of Human Services and the Ayers settlement, the state’s higher education budget is the only agency that hasn’t been cut by 5 percent, but it’s close, at 4.7 percent.

Barbour was quick to warn this would not be the last time he has to adjust the budget. Because the total deficit for FY2010, according to revenue estimate the Joint Legislative Budget Committee adopted in November, is expected to reach $386 million, an additional $160 million in cuts will be necessary before the fiscal year ends June 30.

“It is clear that state revenue will not recover by the end of this fiscal year,” he said.

Mississippi’s revenue has fallen short of estimates for 15 consecutive months. In November, collections were 6.88 percent, or $24.8 million, under projections. For the first five months of the fiscal year, they are 7.3 percent, or $136.8 million, short.

Gov. Haley Barbour will hold a news conference this afternoon to, according to a press release from his office, announce “major decisions” regarding the state’s budget.

That’s pretty easy to translate. “Major decision” means “more cuts” to the state’s budget that has already had $172 million trimmed from it in September.

November’s revenue came in 6.88 percent, or about $24.8 million, under estimates. For the fiscal  year that started almost exactly five months ago, revenue is $136.6 million shy of where revenue experts thought it would be. If that pace holds until next June 30, the nearly $330 million deficit will be right in line with what Barbour said he thought it would be when he made the first round of cuts in September.

Barbour will share the particulars at 2 p.m. Magnolia Marketplace will have the details shortly thereafter.

The Mississippi Economic Council’s annual Transformation Tour stopped in Jackson this morning at the Hilton on County Line Road.

A few hundred folks crammed into one of the hotel’s ballrooms to hear a handful of elected officials offer their take on the upcoming legislative session.

Lt. Gov. Phil Bryant touted the Commission for a New Mississippi’s recommendations to overhaul the state’s budgeting system. Bryant unveiled the plan Monday, and used the same arguments today as he did then.

Bryant said the state desperately needs to develop a strategic plan and tie the allocation of state funds to agencies to the components of that plan. The performance-based budgeting concept is a big part of the Commission’s goals.

“If nobody’s monitoring your level of success you’re probably not going to get much accomplished,” Bryant said. Magnolia Marketplace is writing a story for next week’s MBJ that will take a long look at the Commission’s report and try to gauge how it will play when lawmakers convene in January. Here’s a hint: Some parts of the plan stand a better chance at becoming reality than others.

Secretary of State Delbert Hosemann touted the new Blue Book and warned against the inclination some legislators may have for diverting 16th Section revenue from school districts to the general fund. Hosemann’s legislative agenda includes reforming the state’s LLC, trademark, tradename and uniform commercial code laws.

Institutions of Higher Learning Commissioner Dr. Hank Bounds and State Board of Community and Junior Colleges Executive Director Dr. Eric Clark both said that their respective levels of education were Mississippi’s key to properly emerging from the recession. New State Superintendent of Education Dr. Tom Burnham, who just started his second stint in that seat, echoed Bounds and Clark.

The Transformation Tour started Nov. 9 in Greenwood and will end Dec. 10 in Gulfport. In all, 12 cities across the state will host or have already hosted the event.

Magnolia Marketplace was about to call it a day when a Google alert caught our attention.

Several national media outlets are reporting that Northrop Grumman/EADS is threatening to pull out of the competition with Boeing for a $35 billion contract to supply the U.S. Air Force with a new fleet of refueling tanker planes.

In a letter with today’s date on it, Northrop Grumman President and COO Wes Bush told the Pentagon that the company believes the request for proposals basically rigs the competition to the point that it would be almost impossible for Boeing not to win it.

Obviously, if today’s threat became reality, it would be met with a healthy amount of disappointment in the Gulf Coast’s aerospace corridor, and more specifically, Jackson County in Mississippi, where Northrop Grumman’s shipbuilding division is located.

The leaders of the multi-state aerospace alliance that was launched recently, Gov. Haley Barbour among them, made it plain that their first priority was helping Northrop Grumman/EADS win the tanker contract.

Details of Bush’s letter can be read here.