Sniping between the top Republican leaders in the House and Senate resulted in the failure of a plan for funding Mississippi’s ailing roads and bridges.
This comes in addition to nearly across the board cuts to nearly every agency, lawmakers said Saturday, the deadline to submit the first draft of the state budget. Officials did not provide reporters with detailed budget information.
The House had put forth a bond package that would have provided some funding for infrastructure repairs plus money for building projects at universities, colleges and community colleges.
To help pay for it, House leaders proposed using proceeds from taxpayers who voluntarily pay about $40 million a year in sales tax for online shopping. The Senate has long been frosty to the idea of collecting more in Internet sales taxes or taking money out of the treasury for infrastructure.
The legislative leaders talked to reporters late Saturday.
“The internet sales tax legislation that they pushed created fake money, in my opinion, and I simply wasn’t willing to do that,” Lt. Gov. Tate Reeves told reporters. “And evidently internet sales tax was so important that they were willing to risk the bond bill.”
The House and Senate leaders could not even agree on the timeline of when each house sent their respective plans.
Reeves said the Senate sent the House a proposal Saturday morning and a plan later in the afternoon that would have used about $150 million worth of bonds, he said, that focused on public safety and infrastructure. The Senate version would have provided about $50 million for infrastructure and up to $70 million for the Institutions of Higher Learning and community colleges.
The House version was not signed by the Senate because, Reeves said, because: “As is often the case, they tend to want to borrow more than I’m willing to agree to.”
Speaker Philip Gunn, R-Clinton, disagreed forcefully, telling reporters the Senate had at least eight hours to consider the 282-page House version of the bond bill.
“We have not been provided with any reason, any policy reason as to why our plan was not a good one,” he said.
Rep. Trey Lamar, R-Senatobia said the House version called for $47 million for the Institutions of Higher Learning, $25 million for community colleges, $22 million for state agencies to use on capitol funding and needs and $40 million for bridges. It also called for using voluntarily paid user fee funds, from online sales, on roads and bridges.
In the end, the Senate killed the proposed Internet fee provision; in retaliation, the House killed the bond bill.
“We’re either going to have a responsible bond bill that focuses on our priorities like public safety, like infrastructure and public education, or we’re not going to have a bond bill at all,” Reeves said. “And this year we’re not going to have a bond bill at all.”
Gunn said the House has worked “tirelessly to find a solution to help start addressing the needs of our roads and bridges,” including by recrafting its legislation to allay the Senate’s concerns.
“The bottom line is that the House has prioritized this issue time and time again. We have not been provided with any solid policy reasons for not moving forward on our bill for funding IHL, community colleges and a roads and bridges solution,” Gunn said.
Usually, lawmakers set aside 2 percent of anticipated revenue for emergencies, but this year the House and Senate agreed to set aside just 1 percent.
“We think that’s the prudent course of action given that over the last two years, revenues have not met overly optimistic projections,” Reeves said.
The Reeves-Gunn drama capped off a busy deadline day when lawmakers were hammering out details of the state budget.
Throughout the day, key lawmakers were mum about details of the budget that was being crafted, particularly the bill that would have funded roads and bridges.
Sen. Buck Clarke, who chairs the Appropriations Committee, told reporters that House and Senate lawmakers had agreed on most of the numbers, but used about 15 dummy bills—for many of the larger state agencies—to craft a $6 billion budget.
Clarke, a Hollandale Republican, said the cuts varied wildly, from as little as 1 percent upward. Budget leaders cut most state budgets to the amounts agencies will have after four rounds of cuts from Gov. Phil Bryant rather than at the levels the proposed in the legislative budget recommendation.
The so-called dummy, or placeholder, bills will have to go back to their conference committees before legislators can vote on them. Clarke added that the amounts may still shift slightly before it’s all said and done.
“We still have several that we’re looking at and chewing on and crying over,” Clarke told reporters Saturday evening.
According to early numbers given to the media, the overall K-12 education budget would see a 1 percent cut. The Mississippi Adequate Education Program, which is a large portion of school district funding, would receive $2.2 billion, according to preliminary information.
Four-year colleges and universities would receive $666 million, a 5 percent reduction. Community colleges would see their funding cut 6 percent.
Medicaid would receive $918.7 million; Medicaid currently has a roughly $80 million shortfall.
The Mississippi State Department of Health of health would see a 5 percent while the Department of Mental Health would see a 2 percent cut.
Only the Mississippi Department of Archives and History would receive more funding than the legislative budget committee recommended because of the opening of the Mississippi History Museum and the Mississippi Civil Rights Museums later this year.
The budget numbers for the 2018 fiscal year, which begins July 1, follow another round of cuts from the governor to balance the current year’s budget.
On March 24, Bryant announced that he would trim most state agencies’ budgets by about 0.5 percent, or $20.5 million.
The Division of Medicaid was excluded from the cuts. Bryant also ordered a transfer of $39 million from the rainy-day fund, the state’s largest reserve fund, meaning he has now pulled the statutory maximum $50 million from the rainy-day fund for this fiscal year.
One way out?
The state’s ongoing revenue challenges have prompted Democratic and Republican lawmakers to rethink tax breaks the Legislature have approved in recent years that have not gone into effect.
Rep. Becky Currie, R-Brookhaven joined a handful of her colleagues when she spoke out in favor of pushing back a more than $400 million tax cut passed last session that phases out the 3 percent tax bracket for individuals and corporations and eliminates the franchise tax on businesses.
“The budget looks terrible and I am of the belief that we should put off the franchise tax break that begins January of 2018,” Currie wrote in a Facebook post. “We could be financially responsible and just put it off until the economy comes back which it will.”
Earlier this week, Senate and House Democrats introduced resolutions to suspend legislative rules and allow for a bill to be filed that would delay implementation of the upcoming franchise tax phase out.
The House resolution would delay the implementation of the franchise tax cut by two years, while the Senate version would delay implementation by one year. Delaying the cut would keep about $20 million in the state’s general fund.
When asked about the possibility of a delay, Republican leadership said they would not support it.
Reeves was the primary architect of the tax cuts and has championed them.
Gunn said he would not support the delay; Speaker Pro Tem Greg Snowden, R-Meridian, said flatly: “That’s not gonna happen.”