- Associated Press - Sunday, May 15, 2016

JACKSON, Miss. (AP) - The shortfall in Mississippi’s state budget for the year starting July 1 is almost certainly more than the $57 million announced last week. And then there’s another question: Can the state can limp through June 30 without another round of cuts to close out the current 2016 budget?

State revenue collections were thrown for a loop when the Department of Revenue absorbed an earlier budget cut by dismissing the temporary workers who opened individual income tax returns and sorted out paper checks. Spokeswoman Kathy Waterbury said Friday that all that mail has now been opened, and all those checks have been deposited. But individual income tax receipts for April and May are running $15 million less than they were in 2015.

That could set Gov. Phil Bryant up for a third round of budget cuts in the closing weeks of the current fiscal year. The Republican governor has already cut $60 million and spent $50 million out of state savings accounts to cover $110 million in shortfalls. There’s plenty more money in the Rainy Day Fund, but Bryant only has authority to spend $10 million more without additional legislative action.

In a $6.3 billion budget, $15 million is a tiny amount of money. But even small cuts could be ugly at the last minute, giving agencies only a few weeks to absorb them. For example, if state aid to school districts was again trimmed, most districts would have little choice but to try to make up the difference out of local cash on hand.

Next year isn’t looking a lot better. Everyone makes mistakes, and revenue estimation is an imprecise science. Apparently legislative staff members double-counted certain amounts of cash, and maneuvers that were supposed to generate $186 million are only going to produce $129 million.

But the error also reflects, in part, the decision by lawmakers to undertake a major budgetary reform in a hurry. This isn’t the first time that lawmakers have sent out orders to agencies to hand over cash to fill a hole in the state budget, grabbing $104 million to spend this year and in 2017. But ending the ability of one agency to pay another for services has caused huge confusion across state government.

Lt. Gov. Tate Reeves, for example, disputes the idea that less state spending is to blame for changes at the Department of Mental Health. He says the agency, which announced a series of service cuts last week, will actually come out $1 million ahead in state support after lawmakers removed the need to transfer money for lawyers, computer services and rent.

“While we’re going to experience some growing pains in this process, in the long term, the taxpayers are going to be far better off,” Reeves told Mississippi Public Broadcasting, saying the process would lead to more legislative control and efficiency. “We’re going to be able to cut expenditures.”

And cuts may be needed. There could be at least another $120 million in deficits already lurking in 2017. Mississippi’s Medicaid program asked for a $1.04 billion budget in 2017, but got $88 million less. That appropriation assumes the program will spend less in 2017 than this year, which almost never happens. State Treasurer Lynn Fitch also says lawmakers put $31 million less than needed into the budget to make state debt payments next year.

So that makes the possible deficit lurking in the upcoming 2017 budget something like $175 million.

For now, though, lawmakers say they’ll hope revenues improve, and if not, try to patch things up next year using state savings.

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Follow Jeff Amy at: https://twitter.com/jeffamy. Read his work at https://bigstory.ap.org/author/jeff-amy


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