CONTACT: Office of the Governor Pete Smith (601) 359-3150 or (601) 951-8510 Kathryn Stewart (601) 359-3150 FOR IMMEDIATE RELEASE

Tuesday, March 9, 2004

CLIMBING OUT OF MISSISSIPPI’S $700 MILLION BUDGET HOLE
By Governor Haley Barbour

When times were good Mississippi went on a spending spree. The Treasury bulged, and every interest group got the money it requested from the Legislature. Prioritizing in state government wasn’t seen as necessary; there was no “living within our means.”

When tax revenues slowed, the state began raiding special accounts and using one-time money to plug the hemorrhaging of red ink. That worked for a couple of years; but now the bill has come due and Mississippi finds itself in a $700 million budget hole.

Mississippi did not get into this budget crisis overnight, and it will not be fixed overnight. After examining what I found upon arriving in office two months ago, I offered an honest, straightforward plan to eliminate our shortfall in two years. My plan, “Operation: Streamline,” is based on simple principles:

No New Taxes
Mississippi already has some of the highest taxes in the South, and raising those taxes (or “fees”) even higher is not only bad for overtaxed Mississippians, it is an impediment to job creation. Besides, we’re not in the worst financial shape in state history because we tax too little. It is because we spend too much. My budget includes no new taxes, and I will veto any bill that raises state taxes. My definition of a new tax is anytime more taxpayers pay to the state government in exchange for no increase in state services.

Control Spending Most Mississippians do not realize that the Governor controls only a small part of the Executive Branch. I have authority to appoint leaders at just 10 departments and agencies, but no authority to reorganize them. To save money and to increase efficiency, I have asked the Legislature for the authority for one year to streamline the agencies that report to me. This would allow Executive Directors to efficiently respond to changes in service demands, technology, and budget constraints by “smart-sizing” state government at a lower cost to the

taxpayer. There is so much duplication in state government that just a minor consolidation of services would save millions.

One cost-saving plan would actually be a benefit to state employees. I want to give state employees more health insurance options, including a no-premium option, to enable them to choose the health coverage, which works best for them while decreasing the overall burden of health insurance costs on our taxpayers. All state workers get the same one size fits all health insurance coverage. Giving additional options to state employees and teachers whose different ages, incomes and situations call for different types of insurance coverage is the right thing to do. If we do not reform the health plan, the program will go broke by the fall.

No “Funny Money Accounting”
Mississippi has a spending problem, and the first step in solving a problem is admitting you have it. I want to confront this problem with honest budgeting. Some have advocated simply raising the revenue estimate – or the prediction of how much money the state expects to take in – to fix our budget problems. But this is like buying a car you can’t afford because you just pretend that more money will materialize. This type of “funny money accounting” is one of the ways state government got into this mess in the first place. While I hope more revenue will materialize, revenue collections in recent months do not provide evidence to increase the growth estimate at this time. The budget must be based on honest numbers and not funny money. The worst thing would be for the budget to include money that won’t materialize so that cuts must be made during the year.

Fund Teachers/Education
My budget eliminates the proposed additional cuts to Universities and Community Colleges – which have been slashed over one hundred million dollars in recent years while their student population has increased. This proposal was the largest spending increase in my budget. As for kindergarten through 12th grade, I accepted the funding level unanimously recommended by the Joint Legislative Budget Committee. It specifically included money for next year’s teacher pay raise, as did my budget. I believe funding for education must continue to be the top funding priority of state government. That is why I am committed to working with the Legislature to find more money for K-12 education.

Call Your Legislator at 601-359-3770 Mississippians have to make responsible choices when they budget around their kitchen tables. It’s time state government learned to do that, too. I hope you’ll support me on no new taxes, on controlling spending, on using honest budgeting and on setting priorities like education. If we do these things, Mississippi will do better for years to come.

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