This story originally appeared on the Jackson Clarion-Ledger website.
Gov. Phil Bryant on Thursday announced another round of emergency mid-year budget cuts to most state agencies, the fourth round of cuts for many agencies in less than two years, with more cuts planned by lawmakers as they set the coming year's budget.
Bryant ordered $50 million in cuts Thursday and is dipping into the state rainy day fund for $4.06 million to square the current fiscal year's budget, which ends in June.
In a letter to the Department of Finance and Administration ordering the cuts, Bryant said, "it has become clear that revenue is not adequate to support budgeted expenditures for the current fiscal year"
Bryant's cuts spare several funds or agencies, including those bound by court orders or statutory exemptions, the main K-12 public education budget, the military and Veterans Affairs, and some law enforcement agencies including the Highway Patrol, Mississippi Bureau of Narcotics and the State Crime Lab. Also exempt are district attorneys and staff, Supreme Court services, Administrative Office of the Courts, trial judges, student financial aid and state schools for the deaf and blind.
Bryant in September made cuts averaging 1.6 percent for most state agencies to cover a $57 million accounting error lawmakers made when they set the current fiscal year's budget that began in July. For the previous year, fiscal 2016, he was forced to make two rounds of cuts, dip into the state's "rainy day fund" savings, and call a special session for lawmakers to grant him the authority to pull more from savings than is allowed by statute in a single year.
The Legislature's budget panel proposes eliminating 1,999 unfilled state government positions and removing most agencies from civil service protection to allow agency directors to eliminate staff and positions. Cuts in services and layoffs for many state agencies were expected for the coming budget year prior to Bryant's cuts announced Thursday.
Bryant's cuts come only days after Medicaid officials told lawmakers the agency expects a $75 million shortfall for the last half of the current budget year and needs a 2.2 percent increase, to $1.03 billion, for the coming year. The Legislature's budget panel has instead recommended a 2.5 percent cut for Medicaid for the coming year, with similar or larger cuts to corrections, colleges and universities and other agencies in the Legislative Budget Recommendation.
State revenue shortfalls have been the source of partisan debate at the state Capitol. Democrats, in the minority, blame the problem on more than 40 GOP-led sales and corporate tax cuts or breaks passed in the last five years. The Republican leadership says Mississippi's revenue problems are similar to many other states' and a result of a sluggish national economy that has yet to recover from the last recession.
Bryant has said that state general fund spending over the prior four years had increased by an "unsustainable" 26 percent, or "five times the rate of inflation."
Mississippi law requires the state to operate with a balanced budget. When there is a shortfall of less than 2 percent, the governor can make cuts. When revenue falls 2 percent or more below projections, the governor is required to make cuts to true the budget.
By law Bryant can make discretionary cuts up to 5 percent, but can’t cut any agency or department by more than 5 percent until all have been cut by 5 percent. He can also use up to $50 million a fiscal year from the state's rainy day fund savings to shore up budget holes. For last fiscal year, he hit his $50 million limit and had to call the special session for the Legislature to grant him authority to use more savings. To balance last year's budget, Bryant made about $60 million in mid-year cuts and pulled about $110 million from the rainy day fund, which had been full at about $400 million for the first time in several years.
Bryant and legislative leaders have said they hope to refill the rainy day fund for the coming year. But state revenue has continued to fall short of projections last year and this year. Medicaid officials recently announced it projects a shortfall for the current year of about $75 million.
Recent cuts, rainy day fund spendingGov. Phil Bryant, by law charged with keeping the budget squared if revenue falls short, has had to make four rounds of state budget cuts in less than two years and dip into the state's "rainy day fund." Most state agencies have been affected by the cuts, although some budgets, such as the main K-12 public education budget, have been spared some or all of the cuts. This includes:
Thursday: Bryant is cutting $50 million from the general fund and dipping into the rainy day fund for $4.06 million.
January 2016: Bryant cut $39.8 million -- or about 1.5 percent for most agencies affected, and pulled $35.2 million from the rainy day fund.
April 2016: Bryant cut $25 million, or .43 percent for most agencies affected, and pulled $10 million from the rainy day fund.
June 2016: Bryant, nearing the $50 million cap on rainy day fund spending without legislative authorization, called lawmakers into special session to grant him such authority. For fiscal 2016, he ended up using $110 million to balance the budget.
September 2016: Bryant cut $57 million, or about 1.6 percent for most agencies affected, to cover an "accounting error" when lawmakers set the fiscal 2017 budget that started in July.