Governor Bryant Releases FY 2013 Executive Budget Recommendation

February 2nd, 2012

Earlier this week, Governor Bryant released his Executive Budget Recommendation for FY 2013. The budget is to provide guidance as the legislature creates the budget.

It will be considered by the legislature in addition to the Joint Legislative Budget Committee’s recommendation and Governor Barbour’s recommendation that was released last Fall.

Bryant’s budget has some good elements as well as some proposals that bring cause for concern. The key components of Governor Bryant’s recommendation are below:

Small Increase for Department of Revenue
Bryant recommends a small $5million increase for the Department of Revenue to fund auditors who will collect more in taxes. It is estimated that the $5 million increase will bring in over $10 million in revenue owed to the state. However, even with the increase, the Department is still recommended for funding at a level below even FY 2011 levels.

Reduced Use of One Time Funds and No New Revenue
Bryant recommends reduced use of so called “one time” special funds for recurring budget items. This budgeting recommendation would make budgeting more straightforward. However, Governor Bryant is opposed to raising taxes and would make up for the reduction in funds with a cuts-only approach.

Lump Sum Authority and State Personnel Board Waiver
Bryant recommends that agencies be given “lump sum” appropriations. Currently, funding is granted with certain amounts provided for specific budget line items, like personnel, travel, equipment , etc. “Lump Sum” appropriations would allow agencies to move funds across budget categories without legislative approval. Waiving State Personnel Board protections would allow agency directors to make personnel changes regardless of an employee’s state service status. State Personnel Board protections promote a public sector work environment free from undue political influence.

Implement Performance Based Budgeting
Bryant recommends passage of the Smart Budget Act which would incorporate Performance Based Budgeting. For more information about Performance Based Budgeting see MEPC’s recent blog series on the subject.

Keep Medicaid Funding Level Despite Projected Increase in Participants
Governor Bryant recommends level funding for Medicaid. However, more participants will likely necessitate either cuts in services provided or cuts to reimbursement rates for providers.

Cuts for Education
Governor Bryant recommends a $72.9 million reduction in state funds for the Mississippi Adequate Education Program. Both Governor Barbour’s and the JLBC budget recommended level funding for MAEP. None of the budgets recommend full funding for the formula that allocates state funding across the state’s school districts. Bryant explains the reduction by suggesting that school districts use their own reserve funds to make up for the cut. School district fund balances are used for cash flow throughout the district’s fiscal year due to irregular funding schedules and for capital expenses. Furthermore, the amount held by schools districts vary greatly from district to district. Intending to address this concern, the Governor recommends only $6 million for an emergency loan fund for school districts with inadequate reserves.

While some of Bryant’s recommendations would improve revenue collection and make the budget process more straightforward, many of the recommendations would continue the “cuts-only” approach of the last administration. A balanced approach that includes new revenue would help the state invest in education and workforce development—both important for the state’s prosperity in the future.