CATEGORY: Legislature

AUTHOR: BOBBY

HED:Musgrove submits budget

By Bobby Harrison

Daily Journal Jackson Bureau

JACKSON - Gov. Ronnie Musgrove stepped outside the normal procedure that has been followed in state government and appeared before the Legislative Budget Committee Thursday to present his budget proposal.

Included in the budget recommendation was a proposal to possibly cut by 5 percent all agencies with the exception of public education, Medicaid, the Highway Patrol and a few others, if state tax collections continue to fall below projections. Musgrove also asked legislators to give state agency directors more flexibility in spending their money to offset the cuts.

"This is a sound, solid budget prioritizing education, economic development, health care and safety for our people," Musgrove said.

Before getting to his budget recommendations for the upcoming fiscal year, which will begin in July, Musgrove offered suggestions for the current year. Because tax collections are coming in below projections, there is a possibility that Musgrove might be forced under state law to make cuts in state agency budgets in October or November. In anticipation of that, he said as soon as he is legally allowed to, he would set aside a "5 percent reserve" in all agencies except public education, emergency management, debt service, homestead exemption, student financial aid, Medicaid, the Highway Patrol and Rehabilitation Services. If tax collections improve, Musgrove said the state agencies would get the money returned. Agencies that would be affected by the reduction include higher education, Human Services, mental health and others.

He also requested that the Legislature in January give all state agency heads "lump sum" authority so they could manage their funds in the most effective and efficient way. The Legislative Budget Committee, which consists of 14 legislative leaders, is meeting to develop a budget proposal. The proposal will be completed in November and is generally used as a guideline by the full Legislature when it convenes in January. The governor has historically presented a budget proposal after the influential Legislative Budget Committee has finished its work. Former Gov. Kirk Fordice used to joke that his budget proposal was tossed in the trash can by legislators.

Musgrove said he was making his proposal now for two reasons. One, he wanted it to be considered by the Legislative Budget Committee as it does its work. And the other reason was to try to address the slowdown in tax collections that might result in the cut in state agencies.

Rep. Billy McCoy, D-Rienzi, said, "I look forward to comparing your (Musgrove"s ) suggestions to others on the table."

But others were not as receptive. Sen. Jack Gordon, D-Okolona, accused Musgrove, a former member of the Legislative Budget Committee as lieutenant governor, of trying to usurp the appropriating authority of the Legislature.

"I have never seen anything like this before," an angry Gordon said. "...We have to deal with reality. You can come in here with a flowery (budget) book."

Musgrove said he was not trying to usurp the authority of the Legislature, but was trying to work with members of the House and the Senate and to let them know his priorities.

Musgrove's other suggestions included:

- Trimming the number of appropriations bills from more than 100 to 20. He said it would make the budgeting process more efficient.

- Obtaining all federal funds possible. Musgrove said his budget proposal included maximum use of federal funds. Legislative leaders asked for specific instances where federal funds were used. He said he would provide that to them.

- Setting priorities among agencies.

- Taking the $145 million the state is scheduled to receive over a 10-year period as the result of the settlement of a lawsuit against Virginia-based American Management Systems and receive the money in one lump sum at today's rate. Musgrove said the state would receive $91 million from the lawsuit settlement if the annuities were sold at today's rate.

The state received the funds as a result of suing AMA for failing to provide the computer equipment it was contracted to supply to the State Tax Commission.

Musgrove said those funds could be used to offset the tax collections slowdown. House Speaker Tim Ford, D-Baldwyn, said using the one-time monies to pay for recurring expenses could cost the state in future years.

But Musgrove said using the lawsuit settlement funds while making "conservative" budget estimates would address the current shortfall while getting the state's finances in order for future years.

Ford said he thinks the proposal to use the lawsuit settlement funds "is severely flawed."

Still, he said, "Of all the governor's budgets we have had, I think we will look more closely at his because he has been on our side of the table (as a legislator.) He does understand the budgeting process. I think his use of those (lawsuit settlement funds) shows the difficult decisions we have to make to get everything taken care of."

Another member of the Budget Committee, Rep. George Flaggs, D-Vicksburg, said, "I think he has a unique, but innovative approach to budgets. I think it is workable. I think it is incumbent on us to work with the governor. He extended an olive branch I don't know how many times. I am willing to look at every facet to make sure government runs more effectively and I really think that is what he wants. He is willing to compromise. ... At the end of the day, Mississippi taxpayers will benefit."

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