The Mississippi Legislative Budget Committee unveiled a budget recommendation Tuesday for the upcoming fiscal year of $6.39 billion in state-support funds, leaving an unprecedented $4.4 billion in funds that they could spend on other items.
Lt. Gov. Delbert Hosemann, who chairs the Budget Committee this year, said such a large amount of unallocated funds had “never been seen before in Mississippi, and I don’t think will be seen again.”
The recommendation of the 14-member Budget Committee normally is used as a roadmap, or at least a base line, for the full Legislature when it convenes in January to begin work on developing a budget for the next fiscal year, which begins July 1, 2022.
The unallocated funds cited by the Budget Committee include $1.8 billion in federal coronavirus-relief funds, and more than $2 billion derived primarily from revenue growth fueled in large part by previous significant influxes of federal funds to deal with COVID-19 and by inflation factors, also related in part to the pandemic.
Hosemann said the goal should be to ensure the impact for the state in the spending of the unprecedented funds “is generational, not for one or two years, but for one or two generations. I think all of the members of this committee are committed to doing that.”
Some of the funds, like the $1.8 billion in federal American Rescue Plan funds, are one-time funds and are limited by federal guidelines in how they can be spent to such items as water, sewer and broadband expansion.
During the hearing unveiling the budget, House Speaker Philip Gunn offered thoughts on how he believed “the excess funds” should be handled.
“I would challenge this committee and I would challenge both (legislative) chambers, let’s find a way to get rid of the income tax,” Gunn said. “Now is the time to give money back to the people. We have done everything. We have funded all of the government. We have excess money. Let’s give it back.”
Rep. Percy Watson, D-Hattiesburg, a member of the Budget Committee, who previously served as chair of the tax-writing Ways and Means Committee, voiced concern about making large tax cuts that will last for generations based on a historic bump in state revenue collections caused in large part by the coronavirus.
“We have to very careful and not take money out of the revenue steam for years when we are dealing with one-time money,” Watson said.
He added that he believes the state’s financial situation is strong enough to approve significant raises for teachers and state employees during the 2022 session.
The budget proposal the Legislature released Tuesday does provide $25 million to ensure state employees can be paid at least the market minimum level established by the new salary compensation system developed by the state Personnel Board. The market is determined by a combination of the salaries for similar jobs for state employees in contiguous states and by salaries for similar jobs in the private sector.
The Budget Committee recommendation does not provide funds for a teacher pay raise, though various members of the committee — especially Hosemann — have expressed support for a salary increase for teachers.
The Budget Committee recommendation in state-support funds is actually $573.9 million or 4.7% less than the budget passed earlier this year by the Legislature for the current fiscal year.
The proposal provides a $58 million or 2.6% increase for the Mississippi Adequate Education Program. The Adequate Education Program provides the state’s share for the basics of operating local school districts. A $58 million increase in funding still would leave the Adequate Education Program more than $250 million short of full funding.
The proposals for the community colleges and universities are a combined $32 million less than the amount they received from the 2021 Legislature.
Other areas where the Budget Committee plan provides additional funding include:
- Fully funding the homestead exemption provided by counties to property owners for their primary residence. The $11 million increase in state support to the counties to alleviate their cost for the homestead exemption would allow the counties to spend more on infrastructure needs, Hosemann said.
- Providing an additional $3.3 million to hire more law enforcement for the Capitol Complex Improvement District, which consist of a large swarth of downtown Jackson, the Jackson State area and the University Medical Center area. The money would be used to hire 37 new officers.