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Mississippi Attorney General Jim Hood

Hood: Legislature can’t legally take some special funds

By BOBBY HARRISON / Daily Journal

The uncertainty about the state budget for the quickly approaching new fiscal year, starting July 1, might have intensified, based on three official opinions recently issued by the office of Attorney General Jim Hood.

The official opinions, issued upon the request of the Secretary of State’s office, the Torts Claims Board and for the AG’s office to the Department of Finance and Administration, could mean less new money for the upcoming budget year than originally thought.

AG’s opinions do not carry the weight of law, but do provide protection from litigation for public officials who follow them.

Hood’s opinions involve the controversial Budget Transparency and Simplification Act passed during the 2016 legislative session. The act essentially stops the practice of one agency paying another for services, such as for technology services or for rent. In addition, the new law transfers to the state general fund the fees and assessments 16 agencies receive to administer specific programs.

The Legislature then said it would provide those agencies general fund revenue to administer those programs. Many agencies said the Legislature did not provide those funds.

According to the fiscal year 2017 budget document found on the website for the Legislative Budget Committee, $188 million in special funds will be “swept” into the general fund as a result of the Budget Transparency and Simplification Act. But it is estimated the official opinions from the Attorney General’s office could reduce the amount of revenue produced by the new law by at least $70 million.

While it is not clear what happens next, agencies will have to decide whether to adhere to the Attorney General’s opinions, which provide protection from lawsuits, or follow the wishes of the legislative leadership.

Those funds from the Budget Transparency and Simplification Act are a linchpin for the budget. If the funds do not produce as much money as originally thought, it could further complicate the quickly approaching new budget year. Various state agencies, such as Mental Health and the Department of Health, are already announcing cuts and employee layoffs and legislative leaders have conceded they budgeted $56 million more revenue than the state is expected to have.

Hood, the lone statewide elected Democrat, has been a critical of the bill from the onset.

“Legislators passed this bill and created havoc for these agencies,” Hood said in an earlier interview, adding the proposal should have been studied a year before being enacted in one session in an attempt to offset sluggish revenue collections.

In the official opinions, the Attorney General’s office said trust funds were created in law to be administered by specific agencies and the Budget Transparency and Simplification Act does not repeal those trust funds. So the agencies should keep on administering the trust funds that receive specific streams of revenue.

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The official opinion cites the Public Trust Tidelands Fund, established through assessments on entities renting or leasing tideland, and used to preserve the tidelands on the three coastal counties as a trust fund not repealed by the new law.

According to the official opinion, the Secretary of State’s office would continue to administer the fund with revenue derived from the fee as it would several others, including the Preneed Contract Loss Recovery Fund that reimburses beneficiaries of pre-need funeral contracts who have been impacted by fraud or insolvency.

In addition, “applying the plain language” of the new law, if the fees or assessments do not go “for the support” of the agency, then the fund would continue and those funds would not be transferred to the general fund. The Attorney General’s official opinion cites the Mississippi Autism Board Fund as a fund the Secretary of State’s office would continue to administer since the funds for the Autism Board are not used for the support of the Secretary of State’s office.


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