Mississippi State Capitol

As lawmakers press forward on crafting next fiscal year’s budget, revenue collections in the current year continue to fall well below projections.

The state collected $25.6 million less than projected in February, bringing the year’s revenue shortfall to $133 million.

Gov. Phil Bryant, who has twice slashed agencies’ budgets this year to offset dwindling revenues, may be forced into another round of cuts.

“I’m very concerned,” said Rep. John Read, R-Gautier, also the chairman of the House Appropriations Commiteee. “When these low numbers come in, it makes us proceed very, very cautiously… It’s going to be a tight year (next fiscal year), but that’s just the nature of this game. We’re going to get through it.”

Through the first eight months of the current fiscal year, the state has collected just 55 percent of its projected revenue. In the past 18 months, the state has met revenue projections just twice: May 2016 and August 2015.

Lawmakers have continually said next year’s budget will be tight – the legislative budget proposal released in December would slash $195 million of the $6 billion budget, and most state agencies would be cut.

“We will continue to live within our means, and it is not a bad thing to reduce the size of government,” House Speaker Philip Gunn, R-Clinton, said on Friday.

Tax revenues feed the state’s general fund, which finances state agencies and their daily operations. Officials budget a year in advance based on tax collection projections, which is not an exact science. Several economic factors are considered when making projections, but economists cannot perfectly guess how much Mississippians will spend.

Next week, lawmakers in both houses will put their pens to the paper and begin the arduous budget writing process. Half of the state agencies’ appropriations bills originate in the House, and the other half come through the Senate.

All general fund spending bills will have reverse repealers added to them, meaning the bills cannot be signed into law without first being approved by conference committees made up of leaders in both houses.

Conference weekend, when a small group of lawmakers pour hours into carefully determining how much each state agency will receive, is scheduled for March 24-26.

“Everything’s going to go to conference,” Read said. “The Budget Estimating Group will meet again soon to revise estimates and figure out what the big number’s going to be. At that time, I hope the big number covers the Legislative Budget Recommendation. If it doesn’t, we’ll have to adjust. How much we’ll have to adjust, I have no idea yet.”

Before next year’s budget is finalized, lawmakers must handle deficit appropriations requests for this fiscal year.

The largest deficit request came from the Division of Medicaid, which needs about $100 million before lawmakers leave Jackson in April to pay the bills this fiscal year.

The Department of Finance and Administration needs around $15 million, Debt Services needs about $8 million, and the Attorney General’s Office needs about $9 million.

Gov. Bryant has already cut this year’s budget twice mid-year. A February $43 million cut trimmed all but five state agencies’ budgets by about 1 percent. Bryant 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.

It is unclear whether February’s revenue shortfall will lead to another mid-year cut from Bryant. His office did not return requests for comment on Friday.

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Adam Ganucheau, as Mississippi Today's editor-in-chief, oversees the newsroom and works with the editorial team to fulfill our mission of producing high-quality journalism in the public interest. Adam has covered politics and state government for Mississippi Today since February 2016. A native of Hazlehurst, Adam has worked as a staff reporter for AL.com, The Birmingham News and The Clarion-Ledger and his work has appeared in The New York Times, The Washington Post and Atlanta Journal-Constitution. Adam earned his bachelor’s in journalism from the University of Mississippi.

One reply on “Bleak February revenues complicate budget prep”

  1. 2012-16: Passes numerous, unsustainable tax cuts totaling nearly $1 billion without researching impacts of said cuts; revenue tanks as a result.

    2017: “I don’t know where all the money went. I’m very concerned about our budget.”

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