Mississippi budget hurdles keep changing

Published 10:41 pm Monday, May 18, 2009

It’s not clear what’s snagging lawmakers as they attempt to write Mississippi’s budget for the upcoming year because the impediment keeps changing.

First, legislators suspended their session April 1, to allow time to determine how the federal government’s stimulus package would factor into Mississippi’s spending plan.

Mississippi is set to receive from $2.5 billion to $2.8 billion between October 2008 and December 2010. The money comes with numerous federal guidelines and lawmakers said they weren’t sure what budget holes could be filled with stimulus funds.

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At the time of their break, legislators already were at odds over cigarette tax and hospital tax proposals. Supporters of both said the taxes could give the budget a boost because revenue collections have dwindled amid the national recession.

When lawmakers returned to the Capitol earlier this month, they quickly approved a 50-cents-a-pack cigarette tax increase.

Gov. Haley Barbour also urged lawmakers to consider a $90 million hospital tax as they resumed the budget process.

The to-do list appeared to be too much. Lawmakers recessed again without resolving anything, and they’re set to return May 26.

A new issue took the spotlight this past week. Senate Appropriations Committee Chairman Alan Nunnelee, R-Tupelo, refused to back off on his chamber’s proposal that $60 million of the stimulus money be tucked into a reserve fund to use in 2011, when tougher economic times are predicted. Barbour first suggested the idea.

House Appropriations Chairman Johnny Stringer, D-Montrose and Rep. Cecil Brown, D-Jackson, said placing $60 million in a reserve meant shaving that much from the budget. They said agencies couldn’t withstand the cuts. Brown estimated some 2,000 state employees could lose their jobs.

A bigger question was whether the state could hold back money earmarked for the Division of Medicaid. Brown said based on information from the federal Centers for Medicare and Medicaid Services, states cannot do that. Barbour’s staff is awaiting word from the federal government about the legality of the reserve fund.

Brown said House budget negotiators thought talks with the Senate would focus on a hospital tax agreement and the reauthorization of Medicaid, a government-funded health program that serves some 600,000 residents. The program is set to expire June 30. The budget year begins July 1.

Brown said the House offered a $53 million hospital tax compromise to help cover Medicaid costs, but Nunnelee turned it down.

“Then, he came back to that $60 million deal,” Brown said. “We told him we’re not going to do that. We’re flip-flopping back and forth because he won’t sit down on a single issue.”

When asked about the Senate’s position on the hospital tax, Nunnelee will only say “if we leave a $90 million hole in Medicaid, it makes it very difficult to put a budget together.” He said the $53 million House offer included “expanding Medicaid.”

“We’ve got to take away the Medicaid expansion and just talk about the number. Once we do that, maybe can reach some agreement.”

Brown said the expansion Nunnelee referred to is the House’s attempt to keep the state’s Medicaid reimbursements to the hospitals from being reduced when the facilities are hit with the tax.

So, what’s holding up budget talks?

Nunnelee’s response: “Both the House and Senate acknowledge that we have a far more serious problem on the horizon beginning January 2011. The Senate position is to plan and deal with it, and the House position is to smile and hope we get more manna from Heaven.”