Magnolia Marketplace

As we mentioned earlier, Judith Phillips, a research analyst with the Stennis Institute of Government, was the keynote at today’s monthly luncheon meeting of the Stennis Capitol Press Corps.

Phillips released the findings of a report she just completed that looks at some of the facts and figures associated with obesity – more specifically, how much sugar-sweetened drinks contribute to the condition.

Mississippi is at or near the top of almost every list that ranks the most obese states in the U.S.

Figures from 2008, the latest that are available from the Centers for Disease Control, tell us that 33.4 percent of Mississippians are considered obese relative to their Body Mass Index, which measures height and weight to determine if a person is obese, overweight, at his ideal weight or even underweight. Mississippi is first on that list, followed in second place by Alabama, at 32.2 percent.

The CDC also puts Mississippi at the top of deaths per 100,000 people that are obesity related. In 2006, the latest year for which numbers are available, 270.9 Mississippians died of heart disease, which is the most common obesity-related disease that causes death. Alabama, at 253.3 deaths per capita, is second on that list, too.

In 2009, according to Phillips, Mississippi spent $700 million in Medicaid money to treat obesity-related conditions. Phillips said that number is expected to rise above $1 billion the next decade, as states are forced to pick up bigger portions of their Medicaid tabs.

“Action is needed (to combat obesity and pay for the tratment of related illnesses and diseases) but that decision is left up to the decision-makers,” Phillips said, adding that her report wasn’t meant to forge policy, but to provide information to those who make policy decisions.

A bill that would have added an excise tax on sugar-sweetened drinks like sodas has already died this legislative session.

But the issue is far from over.

Rep. John Mayo, who authored the bill this session, has said repeatedly the past few months that he will continue to introduce similar legislation. Phillips’ report says that a one-cent-per-ounce tax on sugar-sweetened drinks would produce an average of $145 million per year in revenue the next four years; a tax-per-ounce of 1.5 cents would generate an average of $187 million per year over that same period. A two-cent-per-ounce tax would produce an average of $208 million over the next four years.

Ron Aldridge, who is the Mississippi director of the National Federation of Independent Businesses, also serves as the executive vice president of the Beverage Association of Mississippi, which staunchly opposes any excise tax on its sugar-sweetened products.

Aldridge said the BAM led the charge in 2007 as Mississippi became the first state to remove full-calorie sugar-sweetened beverages from public schools.

“This thing is not about whether or not our beverages cause obesity. There’s been no scientific study that says that. There’s been no scientific study that proves there’s a direct link to that, either. What they do say is that it’s about calories in and calories burned.

We believe we need to attack obesity at every front. The public schools have done an excellent job of that. Taxes aren’t going to make us healthier. That’s the reality of it.”

This sounds a lot like the rhetoric that surrounded the cigarette tax in its first years of debate at the Capitol. Legislation to levy an excise tax on cigarettes died the first three or four times lawmakers attempted to move it forward. While it’s not certain that a soda tax will pass, like the cigarette tax eventually did, what is certain is that it’s an issue that will be a part of the next handful of legislative sessions.

Another Friday, another round of budget cuts.

Exactly two weeks after he cut the fiscal year 2010 budget for the third time, Gov. Haley Barbour cut it again this afternoon.

Today’s trim takes $21 million out of appropriated revenues, bringing the total cuts for FY2010 up to $458.5 million.

January was the 17th consecutive month that revenues had fallen short of projections, and Barbour said this afternoon that today’s cuts were “optimistic,” and that it was almost guaranteed  more would be necessary.

After exemptions, which include debt service, court-ordered settlements and — as of early this week, due to an interpretation of the State Constitution — the Supreme Court, FY2010’s revenue has been reduced by 8.664 percent.

Barbour has come under fire for his handling of the budget, particularly from Democratic leadership in the House of Representatives for his refusal to tap into the state’s rainy day fund.

Barbour said of the three revenue estimation models his office uses in deciding how much to cut, he has used the model that calls for cutting the least amount of money, which has forced him to make additional cuts once monthly revenue collections come up short, like they have for the past year and a half .

“If there’s a criticism, it’s that we’re not cutting enough,” Barbour said.

We just got off the phone with Toyota Motor Manufacturing North America Spokeswoman Barbara McDaniel. Here’s the full transcript of our brief conversation.

Magnolia Marketplace: “Has anything become official with the Prius recall?”

McDaniel: “No, there’s nothing official. We’re still investigating.”

Magnolia Marketplace: “I’m contractually obligated to ask this question, but will this have any effect on the Blue Springs facility?”

McDaniel: “No.”

So there you have it. Gov. Haley Barbour is holding a press conference at 11 a.m. to announce yet another round of budget cuts, but we’ll try to sneak in a question about Toyota and see what he thinks.

UPDATED AT 9:36 A.M.: Barbour’s office has just issued a press release announcing the press conference at 11 has been canceled so Barbour can “continue to analyze budget options.”

Gov. Haley Barbour was the keynote for today’s monthly luncheon meeting of the Stennis Capitol Press Corps in Jackson. Usually, speakers offer a 20- to 30-minute presentation before taking a few questions from the audience.

Barbour took the podium and started taking questions immediately. It was a nice change.

Anyway, Barbour didn’t say a whole lot that he didn’t say Friday, when he announced that he was making the third round of cuts to the state’s budget.

He did say that he thought “the vast majority of school districts will be fine” financially after the the latest round of cuts brought the total dollars shaved from the Mississippi Adequate Education Program to $170 million for fiscal year 2010. State Superintendent of Education Dr. Tom Burnham said Friday afternoon that the cuts would “devastate” the state’s public education system. School districts will have to lean heavily on their reserves, Barbour said, to make it to the end of the budget  year. Included in Barbour’s executive budget recommendation is a $35 million set aside to assist those districts whose reserves are not as deep as others.

Barbour also repeated a line he has used frequently the past couple months, that he thinks Mississippi will emerge from the national recession quicker than other states because of the proliferation of high-tech manufacturing jobs from projects like Severstal in Columbus and the GE Aviation plant in Batesville. His commission to study school consolidation is scheduled to release its findings in a report on April 1, which is too late for that issue to be considered in the regular session. Barbour said it’s likely a special session would be needed to tackle it. That, of course, is assuming lawmakers are able to craft a budget for FY2011 by the end of March, which is far from guaranteed.

Barbour, who serves as chairman of the Republican Governors Association, also talked some national politics. He called Republican Scott Brown’s victory in Massachusetts for the right to fill Ted Kennedy’s old U.S. Senate seat “volcanic” and said it had changed the GOP’s playbook for 2010 and beyond, with candidate recruitment increasing in some places that have traditionally been hostile to Republicans. The RGA, Barbour said, has $25 million to spend on elections in 2010, which is a record amount.

Barbour thinks this political environment is more favorable to Republicans than it was in 1994, when Barbour was head of the National Republican Committee and engineered the GOP takeover of the U.S. House and Senate.

“There’s a lot of energy on our side,” Barbour said.

Barbour also had a pretty interesting take on the U.S. Supreme Court’s decision to strike down a 20-year-old law that prohibited corporations and unions from spending money on political advertising. Magnolia Marketplace is working on a story about that for next week’s MBJ, and Barbour’s thoughts on the matter will pepper it pretty heavily. Look for it.

Magnolia Marketplace has finally gotten over some sort of hybrid flu/weird sickness menace that has kept us out of the office this week.

The first day back has been eventful.

To recap: Gov. Haley Barbour said earlier this week that if the House did not pass the bill sent by the Senate that would extend Barbour’s budget-cutting authority from 5 percent to 10 percent, and allow him flexibility as far as which agencies got cut, that he would cut the fiscal year 2010 budget this week to balance it in the middle of spiraling state revenue. He apparently wasn’t kidding.

Barbour just wrapped a press conference in which he announced he’s ordering that the FY2010 budget be cut an additional 3.1 percent across the board, on top of the 5 percent in cuts he’s made since the budget  year started last July.

So every agency and department has been cut by 8.1 percent, for a total of $437 million. Exempt from those cuts are things like debt service, court-ordered settlement and — Magnolia Marketplace did not know this until today — the Legislature. When lawmakers passed the law that spelled out who was and wasn’t exempt from budget cuts, they included themselves in the “exempt” category.

The big ticket items broke down like this as far as total cuts for FY2010.

Mississippi Adequate Education Program: $170 million

Higher Education: $54 million

Community and Junior Colleges: $20.5

Corrections: $26.5 million

Barbour said Corrections could absorb the cuts without the release of the much-talked-about 3,500 to 4,000 prisoners, but that shifting inmate populations to community work centers and away from the state prisons, and the shifting of some discretionary stimulus money, would be necessary to make that happen.

“But I can’t guarantee that zero will be released, either,” Barbour said.

When asked if the latest cuts would result in state workers losing their jobs, Barbour replied, “Yes.”

Barbour also reiterated his long-held stance that the state’s rainy day fund has to last another couple years and that next two budget  years will feature “enormous losses” in revenue as stimulus money disappears.

As for this year, “I cannot guarantee that this is where the cuts will end,” Barbour said.

UPDATED AT 12:20 P.M. : Speaker Billy McCoy, D-Rienzi, just released a statement regarding today’s budget news. “I’m not a prophet or the son of a prophet, but I predict a great hue and cry will come down on those whom Mississippians feel are responsible for unnecessarily  gutting funds and placing jobs in peril when a better alternative exists,” McCoy said, referencing the House plan that would have spent additional money from the rainy day fund and the governor’s discretionary stimulus fund.”

McCoy compared Barbour’s move today to Sherman’s March to the Sea, in which he torched every city, town and hamlet he came across. “We know how about how long it took to recover from that,” McCoy said.

For the past two months or so, Gov. Haley Barbour has said he needs more budget authority from the Legislature to balance the budget for fiscal year 2010. Because state law does not allow Barbour to cut the state budget more than 5 percent without legislative approval — he wants the authority to cut it 10 percent — and because the FY2010 budget will have to be cut across-the-board by a little more than 8 percent to balance, that means lawmakers will have to work on the current budget before they can turn their full attention to the FY2011 budget.

Barbour’s authority extension, he says, will allow him to balance FY2010’s budget while lawmakers hammer out FY2011’s spending plan. Trouble is, lawmakers would have to agree to such a plan, and as it stands now, that looks unlikely.

Those first two paragraphs are meant to say this: Unless there is a change in the political winds, there is almost no chance a budget for FY2011 gets done by the end of March. Balancing FY2010’s budget would, at a minimum, take a couple weeks, which would force negotiations for FY2011 to start later than usual, which would almost certainly force lawmakers to extend the session, just like last year when a budget agreement was reached only a few hours before the fiscal  year started.

House and Senate leadership were confident before the session started that there would be a budget agreement by the end of March. They’re right, but it will be an agreement for the fiscal year that started last July, not the one that starts this July.

So get ready for a long, long session.

UPDATED AT 2:49 P.M. : Magnolia Marketplace just had about a two-minute conversation with Lt. Gov. Phil Bryant about the possibility of lawmakers having to work past the regular adjournment date to get a budget passed for FY2011. He said it’s a near certainty the Senate will send a bill to the House that would give Barbour the authority to cut the budget by 10 percent. And if the House doesn’t pass it?

“I think we’ll be here until June if that happens,” Bryant said.

Gov. Haley Barbour just wrapped a two-hour roundtable with about 30 members of the state’s business community. There bankers, business owners, trade group and association executives and two or three legislators. Barbour had called them all into his Capitol office to get their ideas on how to spur economic development and job creation.

The majority of the time, Barbour said a lot of the things he said earlier today at the MEC’s A Capital Day: no new taxes, job creation is his most important function as the state’s chief executive, state revenue is not recovering anytime soon, and the budget process this session isn’t going to be easy, which is why the lawmakers should grant him the authority to cut the budget by 10 percent instead of only 5 percent without their approval.

What was new was Barbour mentioning the possibility of the state guaranteeing portions (maybe 25 percent) of some small business loans — loans that banks would have made two years ago, but now are stuck because of the credit markets. The state guaranteeing maybe a fourth of the loan’s total might be enough for a bank to go ahead and approve it. Such a plan would be designed to make it easier for small businesses to borrow money. Barbour got mixed reactions from some of the financial folks in the crowd.

Barbour stressed that this proposal was in the very early stages, but did say that he expected an up or down vote on it before the legislative session concludes in late March (or April, May or June). He also said he was “not looking for another beef plant” and that the risk to taxpayers’ money had to be weighed carefully, and duplication of existing U.S. Small Business Administration programs had to be avoided.

This will certainly be something to watch as the session moves forward. I’ll be anxious to see how some key lawmakers receive this news. For now, though, the temperature is dropping and there’s rain on the streets. Time to head home. See you tomorrow.

The morning session of the Mississippi Economic Council’s annual A Capital Day featured the state’s education officials providing an update to attendees on, for the most part, the condition of their agencies in the middle of the Mississippi’s revenue plunge.

Superintendent of Education Dr. Tom Burnham, Higher Education Commissioner Dr. Hank Bounds and State Board of Community and Junior Colleges Executive Director Dr. Eric Clark each stressed the importance of education as a tool that can propel the state out of the national recession, and said that they would manage the budget situation the best they could.

Gov. Haley Barbour, though, provided the most substance when he took the podium at the Jackson Marriott.

As it has been for what seems like forever, Barbour’s budget forecast was grim. Fiscal year 2010’s budget will eventually be cut 8.1 percent across the board; FY2011’s budget will be cut an additional 3 to 4 percent. By the time lawmakers start the 2011 session to craft FY2012’s budget, they will have 15 percent less money than what was originally appropriated for FY2010, which started last July.

FY2010’s budget has already been cut some $226 million, but will need roughly $200 million more in cuts to balance. That’s a big reason, Barbour said, he has been pushing the Legislature to extend his authority to cut the budget from 5 percent to 10 percent.

“These cuts need to be made yesterday,” Barbour said of the additional $200 million from FY2010.

Barbour’s biggest obstacle to gaining that authority lies in the Democratic leadership of the House of Representatives.

There will be disagreement within Barbour’s Republicans over the tax amnesty proposal that was included in the Joint Legislative Budget Committee’s budget recommendation. The proposal is designed to allow businesses and individuals who are delinquent on their taxes to pay them minus the penalties and interest.

Lt. Gov. Phil Bryant has come out strongly for the proposal, telling the Mississippi Business Journal in an extended interview in December that he sees it “as a break for small businesses.”

Barbour does not share the same view. In fact, at the Marriott this morning, the most impassioned part of his 20-minute speech came when he was slamming the amnesty proposal.

“I’m a recovering lawyer, and I know lawyers will tell their clients not to pay their taxes because they know an amnesty period will be down the road,” Barbour said. “That should not be the message we’re sending. The message should be that we will run you down and make you pay your taxes and the penalties and interest if you don’t pay them when you’re supposed to.”

That statement drew a round of applause from the 1,000 or so folks in attendance.

Barbour did say he was happy with most of the rest of the JLBC’s budget proposal, and that it dealt with real numbers and tried to achieve most of the savings he did in his executive budget plan.

Moving forward, though, the tax amnesty issue will probably — at least temporarily — drive a wedge within the Republican leadership in the Senate and Barbour. How big the wedge becomes will be one of the more interesting subplots of the session.

Gov. Haley Barbour will sit down with some of the state’s business leaders Thursday afternoon at 1 to discuss economic development, job creation, what needs to happen in the legislative session to spur each of those things, and the state’s budget.

The meeting is open to the media, so Magnolia Marketplace will be there. We’ll have the details as soon as it wraps.

Also, Treasurer Tate Reeves just issued a press release that deals with the budget, and like every budget item the past few months, the news is less than rosy.

The budget for fiscal year 2011, which lawmakers will adopt before adjourning the session in March (or April or May or June), was already expected to have a deficit exceeding $700 billion. Reeves said today that, because an annual payment from tobacco companies based on tobacco usage nationally is some $8 million less than what it was last year, the deficit will be even larger.

Barbour’s executive budget recommendation and the Joint Legislative Budget Committee’s plan counted on plugging some of the holes with $115 million from the Health Care Expendable Fund. Problem is, the HCEF got nearly $118 million from tobacco companies last December; this December, the state got only $109.7 million.

So just add that to the pile of things lawmakers will have to work around when dealing with the budget this session. Pretty soon, the pile will be as big (and just as smelly) as one you’d find in a cow pasture.