Gov. Phil Bryant said Wednesday he is cutting all but four state agency budgets by a fraction to compensate for a $56.8 million accounting error.
The miscalculation, discovered in April after the Legislature had approved the Fiscal Year 2017 budget and left Jackson for the year, was an overestimation of expected revenue chalked up to a “staff error,” legislative budget officials said.
The $56.8 million cut – about 0.96 percent of the $5.8 billion general fund budget – will trim spending all but four of the state’s 99 general fund agencies and departments. Agencies excluded from the cuts are Mississippi Adequate Education Program (MAEP), Institutes of Higher Learning Financial Aid, the Military department, and the Veterans Affairs Board.
“It is the governor’s statutory responsibility to balance Mississippi’s budget,” Bryant said in a release. “I will uphold that duty.”
After the miscalculation was announced in April, Treasurer Lynn Fitch, who has been critical of Lt. Gov. Tate Reeves and other legislative leaders for their budget efforts this year, said she expected credit agencies to take note of the error.
Moody’s Investor Service cited the mistake when it downgraded the state’s credit outlook last month.
“Like many Mississippians, I am deeply concerned that the state essentially begins the new fiscal year on July 1 with an unbalanced budget,” Fitch said at the time.
The overestimation is one of many budget issues state officials have had to deal with this calendar year.
Twice during last fiscal year, Bryant had to pull a total of $45.2 million from the state’s Rainy Day Fund. Mississippi law only allows him to pull $50 million per fiscal year from that fund, and about $65 million more was needed to balance the budget at fiscal year’s end.
Facing lower-than-expected revenue totals last fiscal year, which ended June 30, Bryant was forced to call a special legislative session in June to request authority to raid the Rainy Day reserve funds for a third time.
The low revenue trend continues this fiscal year. In July, the first month of the current fiscal year, Mississippi collected $11.5 million, or 3.9 percent less than July 2015.
“In accordance with Gov. Bryant’s adjustments in state spending today, the Legislature also will reduce its budget by a corresponding amount,” Reeves and Gunn said Wednesday in a joint statement. “Slower than expected collection of sales taxes and other revenues are providing challenges for Mississippi and other states. We will continue monitoring monthly receipts and spending for any additional action as the fiscal year progresses.”
Special legislative panels have been meeting this summer to assess nine agencies’ budgets line item by line item in hopes of identifying and ultimately eliminating “unnecessary spending.” In his statement announcing the budget “adjustment” on Wednesday, Bryant mentioned the working groups’ efforts “to enact meaningful reform.”
“Together, we will ensure that taxpayer dollars pay only for those services and programs that have clear benefits for Mississippians,” Bryant said.
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Remember back on May 10 Reeves and Gunn said this $56.8 million “staff error” was no big deal because it was “only one percent of the general fund?”
Good times.