Mississippi budget: ‘Mighty ugly’ cuts and no borrowing plan

(courtesy photo)

JACKSON, Miss. (AP) — Mississippi would spend less on public schools, have no new funds for transportation and face likely tuition hikes at state colleges and universities under a spending plan approved Saturday by lawmakers that cuts next year's budget by more than 4 percent compared to what was originally planned.

The spending plan for the budget year that begins July 1, described as "mighty ugly" by House Speaker Pro Tem Greg Snowden, a Meridian Republican, could also mean program cuts and layoffs among state agencies.

Saturday night also brought word that lawmakers had failed to agree on an annual state borrowing plan, as House members held out to divert some taxes from internet sales to road and bridge work. That means no new money for transportation after months of struggle, as well as no money to help universities, community colleges and state agencies pay for construction projects. That failure brought sharp words from both Lt. Gov. Tate Reeves and House Speaker Philip Gunn of Clinton, each Republican blaming the other.

"Evidently the internet sales tax was so important to them that they were willing to risk the bond bill," Reeves said, dismissing the hopes for new revenue as "fake money."

Mississippi is struggling with flagging revenue, a result of a slow economy and hundreds of millions in tax cuts that the GOP-led Legislature has passed since 2012. Gov. Phil Bryant has cut this year's budget by more than $170 million to offset shortfalls.

Estimates show tax cuts will subtract $350 million from state revenue next year. While Democrats and even a few Republicans have called for suspending some tax cuts, both Reeves and Gunn said they want to continue to implement tax cuts.

"I think we have campaigned on controlling spending, staying within our means and reducing the tax burden," Gunn said.

Reeves had originally sought to hold funding level for K-12 schools, and even add $20 million for bonus program for teachers in schools scoring well on state tests. But the dim revenue forecast dashed that goal. The state's funding formula, which lawmakers had originally hoped to rewrite, will see funding decline about $40 million to $2.2 billion, House officials said. The formula says Mississippi needs to spend $2.43 billion next year to provide a mid-level education in its public schools, leaving schools $233 million short. The $20 million bonus pool was preserved, though, said Senate Appropriations Committee Chairman Buck Clarke, a Hollandale Republican.

Sharp cuts to community colleges and universities will likely mean tuition increases, possibly as soon as next fall. Universities had already set tuition for the 2017-18 school year, while community colleges set tuition in late spring or early summer.

Lawmakers cut the state's 15 community colleges by 10 percent from the amount of money they had originally been slated to receive in the current year, or $28 million. Universities fell about 9 percent, or $67 million.

Higher Education Commissioner Glenn Boyce said each of the eight public universities will have to make their own decisions, but some schools are close to the edge. Jackson State University is grappling with a financial crisis.
"There's no doubt that we're going to have to look at how we're going to raise revenue," Boyce said, saying other options besides tuition increases would be considered. Community College Board Executive Director Andrea Mayfield also said spending cuts and tuition increases would be examined.

Lawmakers had sought to follow a state law calling for 2 percent of revenue to be set aside to cushion against possible shortfalls. Instead, lawmakers will set aside only 1 percent, suspending the guideline.

The state's Medicaid program got as much money as it started 2017 with, but no money to match the additional amount that it spent this year. Lawmakers are putting another $60 million into this year's budget to cover a deficit. That's likely to mean another midyear deficit, a common occurrence.