Bryant cuts state budget again

Print More

Rogelio V. Solis, AP

Gov. Phil Bryant

Gov. Phil Bryant on Tuesday ordered a third budget cut this fiscal year as tax revenues continue to fall below projections.

The $43 million cut will trim all but five state agencies’ budgets by about 1 percent. Bryant has also ordered a transfer of $7 million from the Rainy Day Fund, the state’s largest reserve fund.

Bryant directed a $51 million cut in January to help offset the revenue shortfall to that point. That cut reduced most state agencies’ budgets by 1.45 percent. He also transferred $4 million from the Rainy Day Fund, the state’s major reserve fund, to the general budget at that time.

Tuesday’s cut includes the K-12 education funding formula, which is typically exempted in mid-year cuts. The cut excludes Student Financial Aid, Mississippi Schools for the Blind and Deaf, the Department of Mental Health, Child Protective Services and Mississippi Emergency Management Agency.

Document: How much will each state department lose from this cut?

“This budget still represents almost $700 million more in government spending than just five years ago,” Bryant said in a statement on Facebook. “Unlike other states, Mississippi has a healthy reserve I have drawn upon to fund vital services like mental health, public safety and the military, some of which have received small reductions.”

The cuts come after state economist Darrin Webb told legislative leaders last week that Mississippi’s economy continues to struggle compared to what’s happening nationally.

Legislative spending chairmen Rep. John Read, R-Gautier, and Sen. Buck Clarke, R-Hollandale, said in January the cuts would likely be necessary after January collection reports show an $18 million shortfall.

That $18 million shortfall, added to the other six months of this fiscal year means the state has missed original revenue projections by $107.5 million this fiscal year.

There have been other pressures on the state budget as well. In September, Bryant ordered a cut for all but four state agencies to compensate for a $56.8 million “accounting error” made last spring during the budget writing process for this fiscal year.

Tax revenues feed the state’s general fund, which finances state agencies and their daily operations. When revenues run below projections, the governor and Department of Finance and Administration Director Laura Jackson compensate by cutting state agencies’ budgets or transferring reserve fund money to the general fund.

The state’s revenue collection woes are not new. In the past 17 months, the state has met revenue projections just twice: May 2016 and August 2015.

In addition to the cuts this fiscal year, Bryant cut the budget two times last fiscal year and pulled around $110 million from the state’s Rainy Day Fund to deal with lower-than-projected tax revenue collections.

The budgeting system for the state, while fluid and not exact, is designed to alert state fiscal officials in real time to any revenue shortfalls. It also gives lawmakers a sense of how much money will be available to distribute to state agencies and departments next fiscal year.

Clarke and Read are working with the Legislative Budget Office on crafting next fiscal year’s budget. Lawmakers are already considering appropriations bills for each general fund agency for next fiscal year. When revenues do not meet projections, it muddies the budgeting process for the next year, Clarke said.

The cuts put “extra confusion in the process. You have to start at whatever the lowest amount is,” Clarke said at a Mississippi Economic Council breakfast last month.

  • Otis

    I want to see a detailed analysis of how all these tax cuts have either helped or hurt the state coffers. If tax cuts increase revenues, as many republicans boast, then why is the governor having to cut the budget every six months? Something isn’t adding up, and I want answers.