Oops! FY2017 revenue estimate off by $56.8M

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Legislative leaders said Tuesday that Mississippi’s expected revenue for next year was erroneously overestimated by $56.8 million.

The announcement came less than a month after state financial officials said revenue for next fiscal year would be lower than the previous year for just the fourth time in 40 years,

Lt. Gov. Tate Reeves

Lt. Gov. Tate Reeves

The mistake was chalked up to “a staff error,” according to a joint statement released by Lt. Gov. Tate Reeves and House Speaker Philip Gunn.

It is unclear exactly how it will affect next year’s $5.8 billion budget, as accurate allocation figures for state departments have not yet been released by the Legislative Budget Office or any other state officials.

Speaker Philip Gunn, R-Clinton, discusses the 2016 legislative session.

Mississippi Today

Speaker Philip Gunn, R-Clinton

“Late last week, we were made aware of a staff error that led to expected general fund revenues to be overestimated by $56.8 million during the FY2017 budget negotiations,” Reeves and Gunn said in their statement.

State Treasurer Lynn Fitch, who has publicly criticized Reeves and other lawmakers after they passed a $250 million bonds bill, released a statement Tuesday afternoon addressing the error.

“Like many Mississippians, I am deeply concerned that the State essentially begins the new fiscal year on July 1st with an unbalanced budget,” Fitch said. “And, I fully expect that the credit rating agencies will be just as concerned. I stand ready to do whatever I can to protect the state’s good credit standing and shield Mississippi taxpayers from the negative consequences of this budget.”

The leaders said in the statement the mistake does not affect the current fiscal year budget, which ends June 30, and no immediate action is necessary. If there is a revenue shortfall in next year’s budget because of the error, lawmakers would be expected to handle the situation in next year’s legislative session.

Tuesday’s announcement adds to ongoing conversations about revenue estimates for next year.

On April 15, just hours before the FY2017 budget was considered by the state legislature, the Revenue Estimating Group said revenue estimates for next year were about $102 million less than initially expected.

That estimate caught many lawmakers by surprise and sent a shockwave through the Capitol as leaders were tasked with approving individual departmental appropriations in about a 72-hour period.

A bill passed in late April aimed to help offset the negative projections, pulling assessments and fees brought in by state departments that fall into the special funds category into the general fund instead. The bill, dubbed the “Budget Transparency and Simplification Act,” would also prevent state agencies from charging fees to other state agencies.

Gov. Phil Bryant told News Mississippi that bill likely led to the overestimation error announced on Tuesday.

“That is a huge, historic effort,” Bryant said in reference to the passed bill. “We realize there was going to be some problems as we change the process of a convoluted budget.”

In late April, Bryant cut the current fiscal year’s state budget for the second time, citing revenue shortfalls. Though a specific budget breakdown for next year has not yet been released, numerous state agencies will have to lay off employees and cut back expenditures to compensate for the budget cuts.