Attorney General Jim Hood wasn’t on a courtroom stand Friday afternoon, but he might have felt like he was.
Hood was one of six department heads who met with a panel of lawmakers to present requests for Fiscal Year 2018 funds at the annual Legislative Budget Office hearings.
After his short budget presentation, Hood was pressed by lawmakers, primarily Lt. Gov. Tate Reeves, about his legal opinions that undermined a new law that was scheduled to sweep $187 million of special funds into the state’s general fund.
In eight written opinions and “several informal discussions” with agency heads over the summer, Hood’s office declared that $79.4 million of that $187 million could not be swept from agencies under the new law. The Department of Finance and Administration, which manages the state budget, followed Hood’s opinions on which funds to sweep.
The 15-minute back-and-forth between Hood and Reeves became intense at times, with both men raising their voices and cutting each other off. Reeves pressed Hood on his research and interactions with other agencies while compiling the $79 million figure.
Reeves pressed Hood five different times about whether it was possible the figure was inaccurate. Throughout the questioning, Reeves maintained that legislative leaders factored in “a large percentage of that $79 million as trust funds” that could not be swept. As a result, he suggested, the $79 million figure offered by Hood “could be exaggerated by as much as $70 million.”
“Well, (the $79 million figure) is true until you prove otherwise,” Hood responded. “And I haven’t seen a thing from you or anyone else in the Legislature, LBO (Legislative Budget Office) or anybody else.”
“And I assume – a lawyer makes assumptions – that if you had the evidence, you’d put it forward,” Hood continued. “And so, I interpreted the law that you wrote, we added those (funds) up and said, ‘Here’s our opinion, (Department of Finance Administration), take it or leave it.’ And they took it.”
Hood told Reeves that his office obtained a letter signed by Senate Appropriations Chairman Buck Clarke, R-Hollandale, informing the Department of Finance and Administration to sweep certain funds. Hood said Friday that he used that list of funds to determine which funds could not legally be swept.
“It is clear in the legislation that trust funds were exempted,” Reeves said. “So in putting the budget together, it is possible the Legislative Budget Office, Chairman Clarke, former (Appropriations) Chairman (Herb) Frierson, took into account those trust funds that were not going to be swept, and therefore it was never contemplated those funds would be transferred to the General Fund?”
Hood, a Democrat who is contemplating a run for governor in 2019 and could possible face Reeves, a Republican, in a general election contest, used one of his answers to present a civics lesson:
“The Legislature’s authority ends when you walk out the door,” Hood said. “It’s why we have executive branch agencies. It’s their job to enforce what you’ve written. And if there’s confusion, then that’s what we have to deal with. We gave the answers as best we could following the law. We didn’t make any political interpretations or anything like that.”
Since the law passed, Reeves and other legislative leaders have acknowledged some unforeseen errors in the law that will need to be worked out in the 2017 regular legislative session.
Frierson, who was appointed Department of Revenue commissioner earlier this year, emotionally apologized to the House in a special legislative session for $56 million in errors made in the crafting of the law. On Friday, Hood said Frierson, whom he considers a friend, never said a word to Hood about the remaining $79 million figure.
Reeves has continually brushed off questions about Hood’s opinions, stating lawmakers can resolve any problems with the bill in January.
In one interview shortly after the attorney general opinions were released this summer, Reeves, who previously served eight years as the state Treasurer, said: “I don’t take budget advice from the attorney general. Heck, I don’t even take legal advice from him.”
“Opinions (of the attorney general) are just that,” Reeves’ spokeswoman Laura Hipp told Mississippi Today in August.
The dispute between Reeves and Hood stems from the Budget Transparency and Simplification Act passed in April. The law pulled certain assessments and fees brought in by state departments that fall into the special funds category into the general fund instead, draining the special fund accounts, and in many cases, unused cash reserves, of numerous state agencies. The bill also prevents state agencies from charging fees to other state agencies.
Lawmakers passed the bill shortly before they were asked to approve Fiscal Year 2017 appropriations. Few lawmakers knew the ins and outs of the bill before its passing, but legislative leaders assured their colleagues it would offset anticipated budget shortfalls incurred during Fiscal Year 2016. Numerous lawmakers complained to leadership and media about being left out of the decision-making process, but the law and all appropriations passed.
Officials and agency heads were left not knowing how much their agencies could spend in Fiscal Year 2017. The Legislative Budget Office, which prepares the final appropriations based on lawmakers’ decision and distributes them to the Department of Finance and Administration, published its budget report more than a month later than usual because of confusion over how the new law would affect agencies’ budgets.
In late June, Hood released the opinions publicly, and media reported his findings. Department of Finance and Administration Executive Director Laura Jackson told Mississippi Today in early August that the department was adhering to Hood’s opinions.