Legislative Budget Committee Recommends Sweeping Budget Cuts Despite Revenue Growth and Full Reserves

December 10th, 2014

The Joint Legislative Budget Committee (JLBC) of the Mississippi Legislature adopted its budget recommendation yesterday for the next budget year. The recommendation will be used as the starting point for budget debates during the upcoming legislative session.

Despite projected general fund revenue growth of $166 million (an estimate that was adopted in November) the budget only recommends allocating $18.5 million of general funds over the current budget year. When all state discretionary funds are taken into account, the 2016 budget is recommended to actually decrease by $112 million. Cuts are recommended for every major budget category except for the Mississippi Adequate Education Program, for which the proposal includes a very small increase for teacher pay raises enacted last year.

The committee recommends increasing reserve funds to $622.4 million by implementing a 2% set aside of general funds revenue, despite having a full rainy day fund. The JLBC budget recommendation is a starting point that will likely change throughout the session. For example, legislators may decide to pass a law to suspend the requirement to set aside 2% of the general funds and use those funds to provide additional funding for the budget. The table shows the funding sources for the JLBC budget recommendation.

The next table shows the recommended funding levels for selected budget categories. MAEP is the only selected category with a recommended increase. The $32 million increase for MAEP will essentially only pay for the legislature’s teacher pay raise enacted during the last legislative session. MAEP, if funded at the recommended level will be underfunded by almost $280 million next year and will still be funded below the 2008 funding level (the last year MAEP was fully funded). Other categories like Medicaid, Universities, and Communities and Junior Colleges are recommended for cuts.