Mississippi finances face serious headwinds
GROWING AND GROWING: Mississippi’s budget has continued to grow even with the GOP controlling both houses of the legislature and the governor’s mansion.
By Steve Wilson | Mississippi Watchdog
The pre-election year budget cycle might be Mississippi’s calm before the proverbial hurricane.
While predictions on the upcoming state government revenue report for the past fiscal year are rosy, the perils facing Mississippi finances are worse than ever, including a bloated K-12 education spending and a collapsing state pension system.
The Joint Legislative Budget Committee will begin its budget hearings Sept. 30 to determine how much state agencies will take from the budgetary pie.
Even though the state’s budget has been on the uptick, those slices may get smaller in coming years.
Except for one.
A ballot initiative to fully fund the Mississippi Adequate Education Program could be on the ballot in 2015, if the secretary of state’s office gets 107,000 certified signatures by Oct. 1.
A lawsuit by former Democratic Gov. Ronnie Musgrove, which has added more than 25 of Mississippi’s school districts to its list of plaintiffs, is seeking to accomplish the same goal.
If the ballot initiative passes, or the lawsuit is successful, the MAEP’s complex formula to determine the budget allocation for K-12 education could mean millions in new education spending. A fully funded allocation this year would mean a 13.4 percent uptick in education spending over last year.
For those keeping score at home, that rings up to more than $311 million, a pretty expensive definition of “adequate.”
That’s a bigger tab than for most state agencies and would force lawmakers to perform massive cuts on the rest of the budget. Or worse yet, raise taxes.
But an even bigger spoonful of salt is waiting to ruin the state’s fiscal pie.
Truth in Accounting’s recent Financial State of the States report rates Mississippi 19th-worst among “sinkhole” states — each state taxpayer owes $10,700 for the state’s $12.6 billion debt, an increase of $300 over last year’s report.
A big part of that debt involves the state’s pension system, which is in disarray. The Public Employees’ Retirement System‘s annual report is due in a few months, and last year’s was dire. Even though PERS has a goal of an 80 percent funding level by 2042, the number of retirees are quickly outstripping the number of employees paying into the system.
Ninety-eight percent of Mississippi’s unfunded pension liabilities go unreported, with only $125.4 million showing up on the state’s balance sheets. But it adds up to $5.7 billion, or 45 percent, of the state’s $12.6 billion of debt.
Of the remaining debt, $5.1 billion is in bonds and other liabilities — such as pollution remediation obligations, capital leasing commitments and compensated absences (about $4.1 billion) — account for the rest.
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