/Analysis Reeves’ praise of state’s financial and fiscal health will be a campaign mantra

Analysis Reeves’ praise of state’s financial and fiscal health will be a campaign mantra

Reeves is a former treasurer of the state. He has a background in finance before entering politics 15 years ago. Reeves’ statement was not overlooked and will likely be heard again when he seeks governor’s office in 2019. The Republican is likely to spend significant time on the campaign trail praising the state’s finances. He is already doing so. It is hard to determine the state’s “best financial and fiscal position.” How does that compare against the significant budget cuts of over 10 percent in recent years for many agencies? This issue will likely be debated by the Democratic and Republican front-runners for governor, Reeves and Jim Hood. State employees have been laid off in recent years, programs have been reduced and schools from kindergarten through university have experienced funding cuts or underfunding. Since 2009, $2.3 billion has been spent on local school districts by the state. In 2015, the state funded universities at $748.3 millions compared with $670.1 million in 2018, and community colleges received $258.2million in 2015 session compared with $237.2 million for 2018. Additionally, infrastructure issues were neglected for many years and are now being addressed with less money than experts believe is necessary. Reeves, R-Clinton’s House Speaker Philip Gunn, and other legislators, claim that these cuts were necessary to “right-size” the state government. Others claim Mississippi still has many unmet needs, from education and mental health to health care. However, the fiscal situation of the state is improving. Despite a slow or non-existent revenue growth during the four-year term, tax collections are increasing, though moderately. It is also true that the state has $790 million of reserve funds, with more than $400 million in its Working Cash Stabilization Fund. However, revenue growth has been much stronger in recent years than at other times in the state’s history. The state experienced a period of high growth in the 1990s of over 5% — sometimes even 10% — due to the expansion of the casino industry. The state’s reserve fund for rainy days was more than $200 million. Reserves were also available, mainly from initial payments of $500 million from the settlement of a case against the tobacco companies brought to an end by then-AttorneyGeneral Mike Moore. The state’s coffers were also full due to the economic activity that was caused by Hurricane Katrina’s destruction of the Gulf Coast in 2005. This happened before the Great Recession. After the Great Recession, revenue growth in the state was greater than 5 percent per year for three consecutive years. Then revenue started to decline dramatically. State revenue has decreased or increased by less than 3 percentage points over the three years following the Great Recession. Gunn also praised the state’s fiscal health. Gunn stated that the state’s fiscal condition is due to conservative practices in recent years. He said, “This is a result if not using one-time money for recurring expenses.” Cecil Brown, a Democrat and former state fiscal officer and a member of the House Appropriations Committee, is the Central District Public Service commissioner. Brown made a recent speech to Mississippi State University Stennis Institute/capitol Press Corps, pointing out that the state’s revenue growth has been very low since 2015. He stated that the state revenue estimate for 2019 is $39million higher than the 2015 revenue estimate. This is a decrease of less than one quarter of 1 percent annually. This is a terrible situation. This is a shameful situation. We have seen significant budget cuts over the past four years and many state employees have not received a raise in 10 years. During the same period, about 50 tax cuts were passed. These are currently being formulated and will eventually reduce the state’s revenue stream by more $700 million. The Legislature will still have funds to allocate for the 2019 session, even though it has been subject to years of cuts.