Politics & Government

Lt. Gov. Reeves, Treasurer Fitch clash over bonds

 State Treasurer Lynn Fitch discusses state finances.
TIM ISBELL/SUN HERALD State Treasurer Lynn Fitch discusses state finances. SUN HERALD

Lt. Gov. Tate Reeves and Treasurer Lynn Fitch could be mistaken for opponents for higher office.

They've been publicly feuding for a week over the state's latest bond bill, a 640-page law that ranges from $45 million for Ingalls Shipbuilding in Pascagoula to $30,000 for Jackson parks. The spending on the parks, roads and other infrastructure is one thing that set Fitch off.

Reeves, on the other hand, called her complaints "political pandering."

Pandering for what?

"I don't know whether she does or doesn't," said Reeves about Fitch's possible political aspirations. "I do know that I received the letter she sent on Wednesday afternoon (April 20), after we adjourned. The bond bill conference report was signed on Sunday night. We passed it on Monday. The last day you could hold it on a motion to reconsider was Tuesday. So, I don't know why we received it that late or if there were serous concerns why they weren't expressed earlier."

Fitch, when asked if she was running for governor, didn't exactly rule it out.

"What a compliment," she said, although she was quick to add she likes the job she has.

Reeves, who earlier joked that if appointed king he could streamline the bonding process, said "When is that?" when asked if he was running.

"I pretty busy right now, doing my current job," he said.

Reeves also called Fitch's public airing of the disagreement "irresponsible." Fitch said it was Reeves and company who are being irresponsible, driving the per capita debt to $1,747, which she said is almost double the national average. The don't even agree on the final price tag. Reeves puts it at $250 million. Fitch says it's more like $308 million.

Letter starts it

Fitch started the argument with a letter to Reeves and House Speaker Phil Gunn and copied to Attorney General Jim Hood and Gov. Phil Bryant, who serve on the bond commission that could reject any or all of the bond requests.

She objected to what she called earmarks in the bond bill, some of which she said would be gone before the loan was paid off. And she said many of them also are local projects and state bonds should have a broader reach.

"Many projects are very worthy," she said. "but it isn't the right tool."

The projects Fitch refers to, Reeves said, are a tiny fraction of the bill. And, when trying to please a majority of legislators plus the executive branch, he said, not everyone is going to be happy with every project.

Besides, he said, she can vote against any of the projects as a member of the bond commission, something he did on more than one occasion as treasurer.

Rest of story

And, he said, the bond bill is just part of the story.

"Some have the luxury of looking at House Bill 1729, which is the bond bill, in a vacuum," Reeves said. "For folks such as myself and my staff who worked on that particular bill and other bills, we also have to take into account what we funded in the bond bill but also the funding that was provided for South Mississippi in BP dollars."

He said if the House had its way, that money would have be spread across the state.

Fitch also said the treasury doesn't have enough money to pay the debt.

"SB 2918, the debt service appropriations, does not include sufficient funds to cover the debts already incurred on behalf of Mississippi taxpayers, as I told the Legislature time and again these past several months," she wrote in the letter. "The levels appropriated will force us to seek deficit appropriations or utilize our authority under the law to use unencumbered funds, such as those in the state's Rainy Day Fund, in order to not default on our debt."

She estimated the state would be about $31 million short of the amount it will need to repay its debts.

Reeves said there is no chance the state will default. He said Fitch's office could delay issuing bonds until next year, which would push $10 million to $15 million debt payments into the fiscal year that would begin July 1, 2017.

"They have projects they could transfer about $70 million in special funds to pay for debt service," he said. "Historically speaking, the numbers that are projected in special fund transfers are significantly less than the actual transfer that can occur. They tend to underestimate what those transfers are."

He said if those transfers come in lower than expected, "We'll deal with it when we come here in January."

Related stories from Biloxi Sun Herald