/Bryant Replenish Rainy Day fund

Bryant Replenish Rainy Day fund

Bryant requested that legislators spend no more then 98 percent of revenue this fiscal year in his Executive Budget Recommendation. In the Mississippi Code of 1972, the “98 Percent Rule” states that total expenditures from State’s General Fund must not exceed “98 percent” of the estimated general fund revenue for the next fiscal year. The remaining 2 percent can be deposited into the Working Cash-Stabilization fund, also known as the Rainy Day Fund. The general fund appropriation to the Rainy Day fund is subject to a 7.5 percent cap, but there are no minimum statutory requirements. In recent years, however, the Legislature has lifted the 98 percent rule to allow its proposed expenditures to exceed General Fund revenue estimates for fiscal year 2010, 2011, 2012 and 2016. Michelle Williams, chief of staff to the Mississippi Treasurer, says that the two percent set aside for personal savings is comparable to personal savings. It is important to think of it as a way to save. Experts in financial management advise that people should consider how they save money. Williams stated that the Legislative Budget Office’s May overestimation by $56.8million could have been compensated if they had adhered to the statute. Williams stated that if we had the 2 percent aside, this money would have been paid for because it was less than 1% of the state budget. “If we had set aside the two percent instead of going to 100 per cent of FY2017’s revenue, the mistake made by the LBO (Legislative Budget Office), in calculating our budget would not have been a problem.” The two percent rule would still cover that money. We would have had some left.” If revenue is low and there are no budget restraints such as the 98 Percent Rule to control spending, the Rainy Day Fund is inaccessible. The governor is limited by state law to no more than $50,000,000 from the Rainy Day Fund in any fiscal year. Bryant had to call the Legislature to special session earlier this year to pass a law allowing him to exceed the limit. Bryant had already spent $45.2million in Rainy Day funds, and the fiscal year was ending, he needed to spend more than $5 million to keep the state’s books in balance. According to Mississippi Today, Moody’s Investors Service has lowered Mississippi’s credit outlook from positive to negative. Moody’s reason for lowering Mississippi’s credit outlook was that it didn’t adhere to the 98 Percent Rule. The Rainy Day fund is currently worth nearly $302 million. Bryant recommends rebuilding that reserve. Williams stated that the governor’s recommendations will help address the budgetary issues Moody’s had concerns with. Williams stated that the governor’s recommendation was a significant improvement. “The governor touched on many of the issues Moody’s highlighted: not using one-time funds, two percent set aside, putting money back in the Rainy Day Fund and he had a whole page where he addressed all the things Treasurer Fitch has been talking about our debt and bond money. It’s encouraging,” Laura Hipp, lieutenant governor spokesperson, said. Gov. Gov. Moody’s estimated Mississippi’s per capita net tax-supported (NTSD), at $1,707. This figure was $700 higher than the national median, and Mississippi ranked 15th in the country for highest NTSD. The net tax-supported state debt number is the sum of all the state’s debt that each person has if it were evenly distributed over the population. Williams stated that there are steps to be taken towards budgetary responsibility. The governor’s budgetary recommendations can be a great start. Williams stated that it all comes down to how people spend their money._x000D