JACKSON — The state budget approved by Gov. Haley Barbour this week includes record-high funding increases for education and health care, but he warned those are generous windfalls that will dry up in 2011.
The $20 billion budget contains so much federal stimulus money that “we must learn to wean ourselves from it soon, as it ends after next year,” Barbour said.
The Republican governor said revenue shortfalls — which he”s predicted could be more than $400 million a year — will continue to bedevil him and the state Legislature through 2011.
In its mad-dash special session that ended at midnight as the new fiscal year arrived Wednesday, the Legislature sent Barbour the overdue budget bills. They”ve been struggling to finalize the appropriations since March in the midst of the worst economic downturn since the Great Depression.
“While not all issues are resolved, overall this is a prudent, balanced budget that I believe will serve the state”s taxpayers, agencies and their constituents well for the next fiscal year,” Barbour said in a statement he issued announcing the enactment of the new budget.
The Legislature didn”t pass the $8 million needed for the state Public Service Commission and Public Utilities Staff. The House and Senate couldn”t resolve disagreements over extra staffing. Barbour will call legislators back for another special session to fund the utility regulatory agencies.
State government”s overall budget has about $6 billion in state funds along with the special stimulus dollars plus about $14 billion in other federal funds and special state fees and taxes, according to the Legislative Budget Office.
Spending for all levels of education — elementary-secondary schools, community colleges and universities — will be the highest ever, Barbour noted, but federal stimulus funds made that possible.
The U.S. Congress in February provided funds to help states cope with the economic recession. Mississippi”s share totals about $2.8 billion to be available through 2010. Of that amount, the Legislature allocated for this year about $523 million for education and health care.
The Mississippi budget finalized Tuesday has about $250 million more than what was appropriated in state funds last year. While state tax collections are down, newly enacted cigarette and hospital taxes combined with the federal stimulus funds to boost the budget.
The Mississippi Adequate Education Program — local schools” main source of state money — is fully funded with more than $2.2 billion, an increase of about $34 million from the just-ended fiscal year.
The state”s eight public universities received about $799 million in state and stimulus funds. That”s up from the $788 million the Legislature appropriated last year.
Rep. Tommy Reynolds, D-Charleston, who chairs the House appropriations subcommittee for higher education, said this is “not a perfect level but a reasonable level.”
Medicaid”s budget totals more than $5 billion — the first time it”s reached that figure in state history. Up by about $500 million from what it received in the last budget year, the health care program for the poor was boosted by the $256 million the state Division of Medicaid is getting in federal stimulus funds.
Medicaid was the 2009 legislative session”s most difficult and contentious fiscal issue — one that nearly kept the House and Senate from passing any of the $20 billion needed for state government. Barbour had previously insisted the Medicaid budget be crafted before he would allow the Legislature to take up any other funding bills.
He reversed himself Saturday and snapped lawmakers back Sunday for the special session, even though he and leaders of the Democratic-controlled House still hadn”t reached the compromise needed to keep the Medicaid program alive.
“I don”t want Medicaid to keep other departments and agencies unfunded because of the Medicaid issues,” Barbour said in making the special session call. He had earlier brushed aside concerns about state government beginning the fiscal year without legislative appropriations.
The deal he and legislators reached — which barely passed the House by four votes Tuesday — extended the life of Medicaid and partially funds it with a $60 million hospital tax that could rise to $90 million in 2011.
In addition, the Legislature curtailed efforts to strip cost-containment and budget-cutting measures Barbour wanted to respond to revenue shortfalls.
Senate Public Health and Welfare Chairman Hob Bryan, D-Amory, said the legislation ensures the deficit-plagued Medicaid program has the fiscal controls needed while also sustaining funds to sufficiently care for the 6000,000 people it serves.
“We have a fail-safe mechanism. … There is a guarantee that there”s money there to continue to operate the program,” Bryan said.
With health care costs expected to soar and Medicaid stimulus funds to run out, Barbour persuaded the Legislature to save money to deal with that next year. The state will have $60 million stashed aside from the annual payments it receives from settling a negligence lawsuit against the tobacco industry.
“I am especially pleased the Legislature accepted my proposal to carry forward $60 million from the Health Care Expendable Fund as a cushion against the revenue shortfalls that are expected next year,” Barbour said.
Former state Attorney General Mike Moore won the multibillion-dollar settlement in 1994 after he sued tobacco companies for sickening smokers.
The state is planning to get additional revenues from selling contraband cigarettes seized in April. The tobacco”s estimated retail value is $20 million, according to the state Auditor”s Office. The unpaid state taxes total more than $5 million.
While the Legislature was still passing appropriations Tuesday just minutes before midnight brought in the new fiscal year, it appears Barbour was able to sign all the bills into law before the clock struck midnight, according to Press Secretary Dan Turner.
That wasn”t the case in some states as they deal with the worst financial times in decades. About six states missed their deadlines and let the new year begin without finalizing their budgets for government to operate.
The Dispatch Editorial Board is made up of publisher Peter Imes, columnist Slim Smith, managing editor Zack Plair and senior newsroom staff.
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