Former Gov. Ronnie Musgrove used to say the most important item addressed each legislative session is the budget because it establishes the priorities of the state.
For decades, that priority in terms of where the most state funds are spent has been public education. While arguments can be made that Mississippi could be spending a modest amount more of existing funds on education than say on public safety or other entities, the real issue is not the share of state revenue spent on public education, but that Mississippi’s limited tax base does not cover all the needs of the state.
During the 2021 session, legislators found themselves in an enviable and somewhat unusual situation in that by Mississippi standards the state coffers were flush — well, relatively flush.
Based on that situation, legislators passed a state-support or general fund budget that totaled $6.56 billion or $249.6 (almost 4%) above the amount budgeted the previous year.
“The main highlight would be the budget …,” House Speaker Philip Gunn said when talking about the recently completed 2021 session. “Obviously, revenue continues to be good. This allows us to fund all state agencies. It actually has allowed us to restore the cuts made last year.”
Last year, in the midst of COVID-19 and fearing what the pandemic would mean for the state economy, legislators cut most state budgets. The overall cut was $125 million or almost 2%. But the impact on the state economy and especially on revenue collections has not been as negative as once feared.
While there have been recent downticks in the state economy in terms of job losses, most economist believe that the outlook for the coming year is bright. Revenue collections through February are 9.5% or $338 million above the amount collected through the same period last year.
Gunn cited “good conservative, budgeting practices” over time for what he described as the budget highlight achieved during the 2021 session.
Truth be known, legislators might have had a little help in reaching that budget highlight, and it came via government spending, not conservative policies.
Economists cite the multiple federal stimulus packages passed to address the pandemic for fueling the Mississippi economy and revenue collections. After all, the average Mississippian has received at least $3,200 in direct payments from the federal government. And thanks to enhanced federal unemployment payments, many Mississippi workers who lost their jobs during the pandemic most likely were making more money than when employed in the state with the second-lowest per capita income.
“We attribute much of this (economic) performance to the federal transfers,” economist Corey Miller of the University Research Center wrote back in September, even before the latest two rounds of stimulus were passed by Congress.
It should be noted that legislators did use a significant portion of that additional revenue to invest in that priority of education. According to figures compiled by the staff of the Legislative Budget Committee, funding for kindergarten through 12th grade education was increased almost $72 million or about 2.8%. When lottery revenue is added, the total additional funding for public education will be about $102 million.
In addition, funding for the eight public universities was increased $47.6 million, or 7%, and funding for the 15 community colleges was increased $16.7 million, or 7.9%.
Nearly every agency garnered additional funding when compared to the amount they received last year. Modest pay raises of about $1,000 a year were provided to teachers. Enough funds were appropriated to provide pay raises of 3% to most state employees and 1% for community college and public university faculty and staff. It should be pointed out not all state employees and university staff will receive those raises.
Importantly, the Legislature provided the funds to cover the increase in costs in the state health insurance plans to ensure the premiums paid by state employees and teachers would not go up. If the Legislature had not covered the increased costs, state employees and teachers would have had to, resulting in a reduction in their take home pay.
Another one of the big-ticket items in the state budget — Medicaid — was essentially funded at the same level as last year, about $900 million. The level funding was made possible, in large part, because the federal government, through the COVID-19 relief packages, is picking up more of the costs for the states’ Medicaid programs — another example where the work of Mississippi legislators was made easier by the largess of the federal government.
Despite all that, when the dust clears, Mississippi still will be near the bottom in funding of teacher, state employee, university faculty pay and in many other areas.