“Moody’s report shouldn’t be a surprise,” Treasurer Lynn Fitch stated Friday, in response to the reports of the change. Their July report indicated that this was likely, just as the Mississippi downgrade from Fitch’s Rating Agency a few weeks back. Even small credit rating downgrades can cost taxpayers money, and we need to address it seriously and quickly.” Although Mississippi is still eligible for the same bonds as before, investors may be less interested in bonds issued by Mississippi. Governor Phil Bryant released a statement. Phil Bryant stated that “Government spending should be curtailed” and that the state’s reserves must be increased. Mississippi’s budget increased by 24 percent over the past four years, a rate that is five times greater than inflation. This cannot continue. Bryant stated, “Today’s Moody’s action proves that spending increases over short periods of time are unsustainable. I hope it serves to wake up those who believe the only way to solve every problem is to spend more money.” Moody’s credit outlook report found three factors that contributed to the state’s negative bonding outlook. These were Mississippi’s excessive use of one-time funds, including three dips into the rainy-day fund in the last fiscal year. They also waived the 2 percent budget set-aside for the three previous years. Moody’s report stated that a sustained performance of national economic trends or a significant increase in reserves could lead to an upgrade in state’s rating outlook. However, the state’s actual bonds could be downgraded if it experiences economic deterioration in comparison to other states, exhaustion or deterioration in fund balances and continues to rely on one-time revenue. During most of the year, state revenues were below expectations. The state had to tap into the Rainy Day Fund three times for $110 million in order to balance its Fiscal Year 2016 budget. Rainy Day is a one-time revenue source. Moody’s Investor Services and Fitch Rating have criticized the use of non-recurring revenue sources to pay for budget shortfalls. Pete Walley, the state economist’s bureau, said that “this is a short-term phenomenon and to me it is all cyclical.” It does show a trend we should be aware of. Since 2008, Mississippi’s economy has not rebounded. We have been trying to make some improvements. Although our unemployment rate has fallen, you can see that the workforce participation rates have been low throughout the year.” A tax and spending study group was established earlier in the month. It is comprised of 13 Republican legislators, five Democratic lawmakers and the governor. Drew Snyder, Phil Bryant’s policy chief — was created to evaluate the state’s tax structure as well as nine state agency budgets. Fitch stated that Mississippi can return to the right path, but she stressed that it was important to adhere to budgeting laws. We must limit spending. We must stop using the bond bills to load so much on the credit cards of taxpayers. We should stop using one-time money for budget gaps. We must also stop routinely waiving 2% budget set asides which causes the Rainy Day Fund raids.” Fitch stated that Mississippi taxpayers wouldn’t have to pay more if they had stronger fiscal discipline. To support this work, you can make a regular donation to the Spring Member Drive today. This will allow us to continue important work such as this one. Our reporters give a human face to policy’s impact on everyday Mississippians by listening more closely and understanding their communities. To ensure that our work is aligned with the priorities and needs of Mississippians, we are listening to you. Click the button below to let us know what you think. Republish this Story You can republish our articles online or in print for free under a Creative Commons licence.