Jackson Free Press

It's deja vu all over again.

State agencies are bracing for deep cuts in the face of dire economic forecasts. This time, the reductions are part of the Joint Legislative Budget Committee's spending recommendation, which will provide a starting baseline for the budget blueprint lawmakers must approve later this spring.

The Legislative Budget Committee imposed more cuts in the fiscal year 2017 budget—which the upcoming Legislative session will finalize—than the current year's budget, appropriating $37 million less than they did in fiscal-year 2016. The committee proposed a $5.67-billion general-fund budget Dec. 15 despite projections that state revenue will be 1.9 percent higher than last year. The proposal suggests that the proposed budget cuts eliminated the allocation of state general-fund dollars for one-time spending.

These cuts are even greater than those that Rep. Herb Frierson, a key Republican budget writer from Poplarville, warned would be necessary if the school-funding amendment Initiative 42 passed. Last fall, he threatened 7.8 percent across-the-board budget cuts if voters did not reject the citizen-driven effort to require state lawmakers to follow state law on funding public schools.

With 42's failure and a bump in revenue, logic holds that any cuts should come in below the 7-percent threshold. Yet, the Legislative Budget Committee has recommended deeper cuts for certain state departments than under the 42 doomsday scenario. 
 Republicans say the committee's budget proposal is just a jumping-off point and that the final numbers are likely to change before the session ends.

"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," Lt. Gov. Tate Reeves said, praising the committee's balanced budget in a press release.

The so-called rainy-day fund—unallocated funds in the budget—totals $481 million that the proposal suggests can be used to address needs in the current or future years' budgets but does not specify which state departments will benefit, if any, from the funds sitting there.

Sen. Joey Fillingane, R-Sumrall, is on the committee that helped put the budget proposal together this year. He said the committee tried to spread the cuts evenly but were obligated in certain instances—such as raises for judges and Mississippi Highway Patrol employees—by previous legislation that require pay increases.

The Jackson Free Press compared the committee's recommendation to budget cut plans obtained via a public records request. House Appropriations Committee chairman Rep. Herb Frierson asked state departments to submit the plans in July in possible preparation for the passage of Initiative 42 and, some argue, as a political move against 42. The documents reflected how a 7.8 percent cut would affect each department's operations and which areas of their own budgets they could slash in the event Initiative 42 became law. Some departments are looking at much higher cuts than 7.8 percent; here are the departments taking the biggest hits.

Attorney General's Office

Proposed Fiscal-Year 2017 cut: 31.36 percent

The proposed budget cuts 31 percent of funding, or about $3.9 million, from the budget of the office of state Attorney General Jim Hood, the only Democrat elected to statewide office. In a letter to the Legislative Budget office in July, the attorney general's office said it had been shorted $760,400 so far in fiscal-year 2016 and had to subsidize "by using special funds that have been set-aside and reserved to meet our Federal matching requirements." The attorney general's office receives no additional state general funds, according to the letter—except in Medicaid fraud cases. In the case of a 7.8-percent proposed budget cut, the office of the attorney general planned to subsidize costs to avoid personnel cuts. Its July letter said, "We will have to request an increase in Special Fund Spending Authority in order to avoid staff terminations, lay-offs and/or furloughs." A larger cut may give the office no choice.

Judicial Performance Commission

Proposed Fiscal-Year 2017 cut: 15.8 percent

The Mississippi Commission on Judicial Performance, which enforces judicial conduct and provides oversight of the judiciary branch of government in the state, has taken several hard budget cuts previously. In fiscal-year 2015, the division was unable to fill a regular staff position, had to resign its only administrative worker and operate at 60 percent of personnel, according to the department's letter. Their staff is so strained currently, that even a 7.8 percent cut, which only amounts to $26,000, would leave the commission "unable to meet the constitutional mandate to enforce the standards of judicial conduct," like holding courts to federal and ethical standards. With the Legislature adding more trial judges, the commission's role would need to grow—if that's possible.

Department of Audit (The Auditor's Office)

Proposed Fiscal-Year 2017 cut: 12.58 percent

With a 12-percent cut, employees might lose their jobs in the auditor's office as well as audit fees increased. The July budget request letter says a 7.8-percent cut would result in 10 employees separated, raising the audit fee and decreasing auditing time and hours. Additionally, the office might not be able to perform "State Single Audits" as mandated by the federal government to ensure that federal funds are being used properly within several state departments and would have to pass those responsibilities to private firms that their letter states would cost much more.

Department of Finance and Administration

Proposed Fiscal-Year 2017 cut: 31.6 percent

Kevin J. Upchurch, the executive director of the Department of Finance and Administration, called a 7.8-percent budget cut "catastrophic" in his letter to the Legislative Budget Committee. The department has suffered cuts or stayed the same for the past 15 years, and more cuts have to come from the salary and fringe-benefit category, its letter states. A 7.8-percent cost would mean a loss of 13 to 26 positions depending on which fiscal year the cut was taken in. The impact, Upchurch wrote, "won't be only to DFA, but will be to all of state government because most all of what DFA does is to provide the basic and critical services that keep government up and running."

Department of Revenue

Proposed Fiscal-Year 2017 cut: 15.53 percent

The Department of Revenue sits in an interesting cross-section of "agency that needs money" as well as "agency that handles money." Ninety-eight percent of the general funds run through the Department of Revenue, but as its July budget cut letter states, the agency's performance is directly related to its funding. Ed Morgan, commissioner of revenue, wrote that "the impact of cutting the DOR will make the state's budget problems worse." The department outlines several areas where 7.8 percent cuts could be made, but either way, the results could be disastrous, it argues. One option outlined suggests a 23-day furlough for all employees that would result in $28.7 million loss in revenue. The alternative would be to dismiss 22 auditors and 13 revenue officers permanently. The department did outline other areas of its budget such as travel, postage, and state agency charges that could be cut or changed if need be.

Department of Agriculture and Commerce

Proposed Fiscal-Year 2017 cut: 8.06 percent

The Department of Agriculture and Commerce would have to eliminate state regulatory inspections with a 7.8-percent budget cut, its July letter to the Legislative Budget Office stated. Those responsibilities for inspections would then fall to the federal government. The department's funding from the federal government is tied to federal dollars, however, and reducing its budget means less federal support. Lack of funding could "result in a lesser quality of motor fuel; endanger the welfare of agricultural commodities and affect other vital consumer protection responsibilities," Agriculture Commissioner Cindy Hyde-Smith wrote.

Mississippi Development Authority

Proposed Fiscal-Year 2017 cut: 19.58 percent

Staff cuts and business development are at stake with MDA's budget, and its July letter said a 7.8-percent cut would result in unspecified staff losses, less travel for staff to recruit businesses, and eliminating or reducing existing contracts. The department's fiscal-year 2016 estimated budget is $27 million, but the Legislative Budget Committee has proposed a $21-million budget for fiscal-year 2017.

Department of Archives and History

Proposed Fiscal Year 2017 cut: 8.27 percent

The Department of Archives has a relatively simple budget with fixed costs on rent and salaries that make up 87 percent of its budget. A 7.8-percent cut to the department would mean the elimination of up to 16 positions in the department. In her July letter, Director Katie Blount wrote that "a cut of this size would have a significant impact on the services and programs MDAH provides to the public."

Comment at www.jfp.ms. Email Arielle Dreher at [email protected].