Mississippi Governor Bryant cuts budget to make up for accounting error

Published 7:24 am Thursday, September 8, 2016

JACKSON, Miss. (AP) — Mississippi Gov. Phil Bryant is cutting $56.8 million from the $5.8 billion state budget to make up for an accounting error.

Bryant announced the cuts Wednesday, a little more than two months into the budget year.

The Republican governor trimmed spending rather than balancing the budget by pulling money from the state’s financial reserves.

Email newsletter signup

“I am hopeful that these adjustments will be sufficient to get state government through this fiscal year, but budget cuts or transfers from the Rainy Day Fund may be required later,” Bryant wrote in a letter to Laura Jackson, the state fiscal officer. “I strongly recommend that all agencies closely monitor spending and continue to make fiscally conservative budget decisions.”

Funding for most programs will be cut just over 1.6 percent. Some items are exempt from reductions, including the Mississippi Adequate Education Program, a school funding formula that is one of the biggest items in the budget. Also exempt from cuts are veterans and military affairs and student financial aid, which are smaller-ticket items.

House and Senate leaders said in May, weeks after the legislative session ended, that officials had overestimated how much money the state might collect during fiscal 2017, starting July 1. Republican Lt. Gov. Tate Reeves attributed it to a “staff error.”

Reeves and Republican House Speaker Philip Gunn issued a joint statement Wednesday saying that the Legislature will also reduce its own operating budget.

“Slower than expected collection of sales taxes and other revenues (is) providing challenges for Mississippi and other states,” their statement said.

When the accounting error was announced, Reeves and Gunn said the shortfall could disappear if tax collections exceeded expectations the first half of the budget year, from July through December. Or, they said legislators could deal with the situation by cutting budgets or pulling money from cash reserves after the legislative session begins in January. Tax collections fell short of the target in the first several weeks of fiscal 2017, however.

This round of cuts comes unusually early in the budget year. Bryant had to cut spending twice last fiscal year because of lagging revenues, but both rounds of cuts were made in the last half of the year, in January and April.

Directors of some state agencies, including the Department of Health and the Department of Mental Health, trimmed services going into this budget year because their agencies received significantly less than requested.

In a news release announcing cuts Wednesday, Bryant said general fund spending — the largest portion of the state budget — has increased by 26 percent, or five times the rate of inflation, in the past four years.

“That kind of growth over such a short period of time is simply unsustainable,” said Bryant, who has signed all of the budgets during those years.

He noted that Gunn and Reeves created legislative groups to examine taxes and spending.

“Together, we will ensure that taxpayer dollars pay only for those services and programs that have clear benefits for Mississippians,” Bryant said.