Legislative budget proposal would cut most budgets

Geoff Pender | The Clarion-Ledger

The Legislature’s budget committee on Tuesday adopted an austere $6.2 billion state spending proposal in anticipation of anemic revenue growth for the coming year.

Adopting the Legislative Budget Recommendation is an early step in setting a fiscal 2017 state budget. The LBR is an outline — and a baseline –— lawmakers will use as they haggle out a final budget starting Jan. 5 when they come into session.

Lt. Gov. Tate Reeves, chairman of the Joint Legislative Budget Committee, said the proposal would keep the state’s rainy-day fund full at about $400 million and continue a prohibition on spending “one-time money on recurring expenses.” He said it leaves about $29 million in recurring revenue unspent for now and $55.9 million in special fund cash balances.

“Once again, your elected leaders have recommended a balanced budget that does not spend one-time money on recurring expenses,” Reeves said. “Today’s proposal is a starting point. As we see revenues come in over the next few months, we will be better able to see how the final budget will shape up.”

The LBR doesn’t address some major spending issues, such as projected current-year deficits of $71 million for Medicaid and $18 million for the Health Department. It also doesn’t address increased funding for the Division of Family and Children’s Services to meet foster care reforms mandated by the state’s settlement of a federal lawsuit.

Gov. Phil Bryant in coming weeks will present his Executive Budget Recommendation. The full Legislature will have the final say on spending in the spring after much debate.

The legislative proposal calls for small cuts to most of the state’s 10 largest agencies and keeps K-12 public education funding level at $2.5 billion — $200 million short of the funding called for by the Mississippi Adequate Education Program formula. It would delete 2,574 vacant positions in state government and calls for reduced spending on travel and equipment.

The plan spends more than $100 million less than the current fiscal year. Revenue for fiscal 2017 is expected to grow 1.9 percent above the latest estimate for the current year.

House Speaker Philip Gunn said he wishes revenue growth were in the 5 percent range the state has enjoyed the last three years but is generally pleased.

“Mississippi is in good shape financially,” Gunn said. “We’ve eliminated the use of one-time money for recurring expenses and lived within our means. You hear of other states having large deficits. We have been responsible.”

Lawmakers on Tuesday also heard an update on the state’s performance-based budgeting project. This work is being led by the state legislative watchdog PEER Committee and the Pew-MacArthur Results First Initiative. It involves using data and performance benchmarks for setting state agencies’ budgets. Its goal is for the state to spend more money on government programs that work and eliminate those that don’t.

PEER and Pew officials told lawmakers they’re creating a web data portal that lawmakers, and the public, will be able to use to judge how efficiently and effectively state agencies are performing.

The state Corrections, Education, Health and Transportation departments are being used as a pilot program, but the state plans to shift all its budgeting to performance-based.

State Appropriations Chairman Herb Frierson, R-Poplarville, has long been a proponent of performance-based budgeting for state government. He likens it to the movie “Moneyball,” where a cash-strapped pro baseball team used computerized player stats to build a winning team on the cheap.

“This will help answer the age-old question of whether we are spending too much money on something or not enough money,” Frierson said. “With these analytics, it’s going to stand out, when a program is not working. It’s going to jump off the paper at you.”

Contact Geoff Pender at (601) 961-7266 or gpender@jackson.gannett.com. Follow @GeoffPender on Twitter.

Legislative Budget Recommendation

Some highlights of the fiscal 2017 state spending proposal adopted by the Legislature's budget committee on Tuesday:

Projects weak revenue growth of 1.9 percent.

Is only a first step in setting a more than $6 billion state budget; the full Legislature will have the final say starting in January.

Meets statutory requirement of a "balanced budget" but does not address several major spending issues, such as a projected $71 million deficit for Medicaid or fulfilling terms of a settlement over the state's troubled foster care system.

Would spend $6.186 billion, or $101.8 million less than fiscal 2016.

Includes raises previously approved for Highway Patrol and Supreme Court justices.

Includes slight cuts for most of the state's large agencies.

Agency funding (amount, percent change):