FY2010 budget cut — again

February 5th, 2010 No comments

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.

Categories: Haley Barbour, News, Politics, State revenue Tags:

Spokeswoman: Prius recall not yet official

February 5th, 2010 No comments

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.”

News out of Japan says Toyota will recall 2010 Prius

February 4th, 2010 No comments

Toyota, which supposedly will build its hybrid Prius at some point in Blue Springs, has not had the greatest month.

Seven of the company’s models, totaling more than 5 million vehicles, have been recalled the past two weeks because of issues with accelerators sticking.

Now comes news from Japan — where it’s already Friday so the daily newspapers have hit the Web and the streets — that the company is expected to recall the 2010 Prius because of problems with the car’s antilock braking system. The Nikkei, the Japanese version of the Wall Street Journal, reports that the Japanese Transport Ministry has yet to receive notice of a formal recall, which would have to happen before anything became official. There have been a total of only 180 complaints in the U.S. and Japan associated with the Prius’s brakes, but the falloutf rom the first round of recalls has probably magnified the issue somewhat.

We’ll have reaction from statesode Toyota folks first thing in the morning.

Categories: News, Toyota Tags:

Spokeswoman: Toyota recall will have no bearing on Blue Springs plans

February 2nd, 2010 No comments

Toyota, which has long been considered the gold standard for automotive companies, has taken a substantial hit lately with its recall related to gas pedals sticking to the floor, causing sudden and unintended acceleration. (“Sudden unintended acceleration” — now that sounds scary.)

Anyway, most of the media coverage has focused on how the company will rebound from having to suspend sales of eight of its models, including the Camry, traditionally one of its best sellers.

What the recall will not touch is Toyota’s plans for Blue Springs, according to spokeswoman Barbara McDaniel. “Totally unrelated” is how McDaniel characterized the recall and the question of when the facility in North Mississippi will start production.

Not included in the gas pedal recall is the hybrid Prius, the vehicle Toyota plans to build in Blue Springs whenever it decides to open it.

In legislative news, today marks a major deadline. Bills that aren’t sent out of their committees by midnight tonight will die. Magnolia Marketplace is working on a story for next week’s MBJ that takes a look at what died and what survived that is of interest to the business community. Look for it.

Stennis format changes a bit

January 25th, 2010 No comments

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.

Barbour keeps his budget promise

January 22nd, 2010 1 comment

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.

Budget by March? Well, maybe

January 11th, 2010 No comments

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.

Categories: Haley Barbour, News, Politics, State revenue Tags:

Barbour hashes it out with business leaders

January 7th, 2010 No comments

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.

Barbour throws down amnesty gauntlet

January 7th, 2010 1 comment

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.

Barbour, business and budgets

January 6th, 2010 No comments

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.