Mississippi tax collections were robust for the first several months of the budget year that started last July 1. Then the coronavirus pandemic struck, businesses were hobbled by government shutdown orders and the economy started to sputter.
On the status of state tax collections, Republican House Speaker Philip Gunn recently told The Associated Press: “We clearly got hammered in April and are still waiting to see about May.”
Legislators face deep uncertainty as they approach two budget-writing tasks. They must plug holes in the current year’s budget, deciding how to fill requests from a few agencies. And they must write a new spending plan to operate state government during the year that begins this July 1.
House and Senate leaders say they will wait until at least June 10 to do most of the detailed work on the upcoming budget. That’s when they expect to receive a monthly report from analysts at the Legislative Budget Office, the full-time professionals who crunch numbers for the elected lawmakers.
A report from LBO (or, in legislative speak, “elbow”) showed that the state’s total revenue collections from July through March were $189.9 million above collections for the same period a year before — a 5% increase.
With pandemic problems, revenue fell sharply the next month. The state’s total collections from July through April were $108.6 million below those for the same period a year before — a 2.3% decrease.
“I just hate it, because we were doing so well,” House Appropriations Committee Chairman John Read, a Republican from Gautier, told the AP.
Writing a state budget is a long process. Agencies submit requests nearly a year before a fiscal year begins. LBO analysts comb through the numbers. The 14 members of the Joint Legislative Budget Committee hold hearings in September. By December, the committee releases its first set of recommendations and the governor releases his own proposed budget.
In typical times, legislators put final touches on the budget at the end of their session. That happens by early May during the first year of a four-year term, when a session is four months long, or by early April during the other years of the term, when sessions last three months.
This year is the beginning of a term, but the pandemic disrupted the session. Legislators were sent home in mid-March and have worked only a few days since then.
The House and Senate met last week and passed the first set of budget bills for the coming year, with initial proposals to shrink state spending. The action was more procedural than meaningful because leaders acknowledged the numbers could change dramatically before they reach a final agreement.
Bills that passed the House will move to the Senate, and those that passed the Senate will move to the House. The two chambers will substitute their own numbers and intentionally put budget bills into a final negotiating process.
Gunn and Republican Lt. Gov. Delbert Hosemann sent a letter to state agency leaders in late April telling them to be frugal during the final two months of the budget year, doing things like eliminating out-of-state travel, which should be fairly easy during the pandemic.
Making deep cuts to budgets is difficult during the final weeks of a fiscal year, when agencies have already spent or obligated most of their money.
Mississippi does have a financial cushion, with more than $550 million in a rainy day fund. Filling the fund was a big point of pride for budget writers, and it’s unclear whether legislators will decide to pull some money from it to fill in gaps for the current year. They could take some out for this year and refill it during the coming year — a shell game that helps them meet the obligation for a balanced budget.
» EMILY WAGSTER PETTUS has covered Mississippi government and politics since 1994. Follow her on Twitter: http://twitter.com/EWagsterPettus.
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