When lawmakers, attorneys and budget officers put their pens to paper in early summer 2016 to determine how to fix the problematic special fund sweeps law, numerous agency heads already had loudly complained and criticized those very officials.
The law, which swept millions in several agencies’ special funds into the general fund, created a great deal of confusion among agency chiefs. They worried some services would be interrupted – concerns which came to fruition in some cases – and many did not know exactly how much money they had to spend in the new fiscal year.
But the group worked to write a single bill that would address dozens of specific problems encountered by several agency heads. The comprehensive, 103-page bill passed the Senate Wednesday morning by a 33-19 vote.
“We really feel this process has opened our eyes a lot to see how much money was out there that wasn’t talked about in this body that we should’ve at least been aware of,” said Sen. Buck Clarke, R-Hollandale, the Senate Appropriations Committee chairman. “We’ve identified every nook and cranny where there was money and what we needed to change in the law to allow us to get moving back in the right direction.”
The 2016 law, often referred to as the “sweeps law,” immediately pulled $187 million of fees and assessments from some agencies’ special funds into the general fund. The law also eliminated inter-agency transfers, such as one agency charging another for rent or technological support.
Legislative leaders said the intent of the law was to increase spending transparency and increase efficiency in many state agencies.
It was pushed through the Legislature by leadership late in the session, and agency heads and a majority of lawmakers did not know the exact effects of the law until after it was passed.
Attorney General Jim Hood’s office was flooded with requests from agency heads, imploring about whether they could legally keep their special funds in place, despite the mandates of the new law.
In 11 written opinions and “several informal discussions” with agency heads, Hood initially ruled that $79 million in special funds could not legally be touched by either budget officials or agencies themselves because of the language of the law, spurring sharp criticism of the attorney general from legislative leaders, including Lt. Gov. Tate Reeves and Clarke.
Still, shortly after the attorney general’s rulings were issued, Clarke and Senate Budget Officer Drew Maddox began meeting regularly with Laura Jackson, the executive director of the Department of Finance and Administration, to determine the scope of the problems.
Jackson and her team, including Deputy Director Brian Pugh and DFA attorneys who are technically employed by the Attorney General’s office, worked with several agency heads to identify the specific problems caused by the law.
After months of work, the group determined that just $8.9 million in special funds – far less than the $79 million from the attorney general’s rulings – of six different agencies could not legally be swept under the new law without first adjusting language of the law.
The bill passed Wednesday cleans up that language so that agencies could access the $8.9 million of “frozen” or trapped funds, Clarke said.
“You’ve probably heard $80 million or $34 million,” Clarke said. “But it’s only about $8 million, if you could even scrap up that much.”
Several senators pressed Clarke on the floor Wednesday about his bill.
Sen. Barbara Blackmon, D-Canton, asked Clarke if agencies’ ability to receive federal matching dollars was addressed in the bill. In the days after the bill was passed, several agency heads expressed worries that they would lose federal matching dollars if their special funds typically used for those purposes were swept into the general fund.
In months of reporting on the sweeps law, Mississippi Today has found just one circumstance of a state agency missing out on federal matching funds because of the new law: The Division of Medicaid missed out on more than $2 million in federal matching funds this fiscal year because of the law, Medicaid spokeswoman Erin Barham said in December.
“There’s a whole section of this bill that allows any agency to make appropriations requests to the Legislature each year to ensure they don’t miss out on any federal matching dollars,” Clarke said Wednesday.
Sen. David Blount, D-Jackson, introduced an amendment that stirred an hour-long debate.
His amendment, which ultimately failed by a vote of 32-16, would have eliminated a section of the bill that he said would transfer the Secretary of State’s authority to lease public tidelands on the Gulf Coast. Instead, the director of the Department of Marine Resources and boards of supervisors for the three coastal counties would have that authority, he said.
Clarke, speaking against the amendment, said that section of the bill is modeled after the land lease process of 16th Section land lease agreements, and that the Secretary of State would still have to sign off on any land leases granted by the new authority in the tidelands.
“The tidelands are owned by people of state of Mississippi. It is state property,” Blount said. “And the law, since the beginning of the state, is that the land is overseen by state land commissioner, an elected official who is answerable to the public. But this bill would remove the Secretary of State’s authority and gives it to executive director of Marine Resources, who is appointed and not answerable to people of state. It’s just not right.”
Secretary of State Delbert Hosemann said in a statement on Wednesday that he does not support the legislation that includes the transfer of authority of tidelands leasing.
“As trustee of the Public Trust Tidelands Fund, the Secretary of State has raised tens of millions of dollars (more than $100 Million since 1990) and acquired a significant part of Cat Island, Deer Island, and other acreage for the Coast and its visitors,” Hosemann said. “Existing law has protected our coastal resources and increased the revenue therefrom for future generations. Hopefully, the Senate will reconsider this proposal.”
The bill passed Wednesday will now move to the House for consideration. A similar bill in the House, House Bill 887, was passed last week and will be added to the Senate calendar next week.
List of funds that cannot be touched until clarifying legislation passes:
Attorney General Office special funds:
• Insurance Integrity Enforcement: $511,642.44
• Prosecutor Education: $296,357.96
• Crime Victims’ Compensation Administration: $950.12
• Crime Victims’ Compensation: $808,039.95
• Vulnerable Adults Training and Prosecution: $594,491.34
• Child Support Prosecution Trust: $348,791.18
• Law and Fire Disability Benefits: $31.01
• Cyber Crime Unit: $489,425.95
• Domestic Violence Training: $564,431.69
• District Attorneys Operation: $76,441.74
• Children’s Advocacy Centers: $55,678.77
• Motorcycle Officers Training: $28,608.25
• Human Trafficking: $1,547.84
Secretary of State special funds:
• Mississippi Autism Board Fund: $6,000.00
• Elections Support: $526,643.28
• Help Mississippi Vote: $112.51
• Preneed Contracts Loss Recovery: $24,695.30
• Third Party Match Payments: $96,745.80
Department of Insurance special fund:
• Propane Education and Research: $251,936.21
Workers’ Compensation special fund:
• Second Injury: $131,260.50
Public Service Commission special funds:
• Motor Carrier: $2,400,676.86
• Mississippi Telephone Solicitor Regulator: $97,982.90
Mississippi Gaming Commission special fund:
• Charitable Bingo: $1,598,690.00