The state”s spending of federal dollars is not “sustainable” for the future, Treasurer Tate Reeves Wednesday told members of the Columbus Kiwanis Club.
In his seven years in office, Reeves has seen the “worst national disaster” in the aftermath of Hurricane Katrina and the “worst economy since the (President Jimmy) Carter administration,” but has “learned a lot” along the way, he said.
“I”m ready for a little bit of normalcy,” he added, reporting the state has a general fund revenue of $5.5 billion and collects $4 billion in special revenue sources, like fuel taxes, but “more than $10 billion in federal money” already has been spent this year.
More than $19.5 billion was appropriated by legislators for functioning of state government this year, he said, noting only about $1 billion of federal dollars was spent in 1990.
“If we continue at that pace of growth, in 20 years, the state will be spending $100 billion,” said Reeves, a Republican from Rankin County. “That is not sustainable in the long term.”
Of the state”s $5.5 billion in revenue, 80 percent is from personal income or sales tax, 10 percent is derived from corporate income taxes and 10 percent from other “small categories.”
But the state”s revenues had “come in below what was expected for 20 consecutive months,” Tate added.
“One month does not a trend make,” he warned, but noted revenues from March represent the first increase in revenues, above amounts estimated, since fiscal year 2008.
“It is very positive,” he said of the increase and explained the state expects to collect 40 percent of its revenue, for the year, in the next few months.
Noting legislative appropriations were cut by 9.5 percent from last year, Tate cautioned, “Budgets do not have to expand every year. You don”t have to get bigger to do a bigger job.”
The state Legislature is expected to resume April 20 to make budget recommendations.
“It probably was the prudent thing for them to do, as long as it doesn”t cost the taxpayer”s any more money,” Reeves said of legislators recessing without agreeing on a budget and resuming to handle the task, after a break.
Historically, 65 percent of the state”s budget has gone toward education, with 52 percent of that money funding K-12 and college operations, 7 percent has gone toward debt service and 10 percent has funded Medicaid.
Additionally, 18 percent of the budget funds the operations of government agencies.
“We”ve been extremely proactive in managing the debt portfolio,” Reeves reported of the Treasurer”s Office, explaining the office has seen a 30-percent comprehensive growth rate in total debt over a 15-year period.
“The governor and I know that is not sustainable,” he said, also noting the state”s debt burden was reduced his first four years in office, but the “uptick” from the last few years largely was due to infrastructure improvements on economic development projects in the state.
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