Top-notch finance experts assess risks and plan for downturns as diligently as they evaluate and promote upside opportunities.
Mississippi’s economy has become more reliant than ever on federal funds. Should President Donald Trump and conservative leaders succeed in their plans to slash federal spending, the risks to our state economy would be substantial, if we aren’t ready.
So, do our state leaders have topnotch experts assessing risks facing state finances? If so, what do their forecasts show should federal dollars decline dramatically? And what are our leaders’ plans should the cuts come true?
The President’s guiding light for federal spending cuts appears to be the Heritage Foundation. Its “Blueprint for Balance: A Federal Budget for Fiscal Year 2018” calls for another base closure round (BRAC), cuts to food stamps (SNAP), auctioning off TVA, cuts to FEMA, cuts to Medicare, Medicaid, and Veterans’ benefits, cuts to Earned Income Tax Credits and Additional Child Tax Credits, and eliminating Head Start, the National Endowment for the Arts, the National Endowment for the Humanities, the Economic Development Administration, the Appalachian Regional Commission, Americorps, SSI benefits, rural airport subsidies, all WIOA job-training grants, and much more. Long-term recommendations include cost-cutting reforms to Social Security, Medicare, Medicaid, and education.
Read the entire document here: http://www.heritage.org/budget-and-spending/report/blueprint-balance-federal-budget-fiscal-year-2018.
Then, consider these facts.
Mississippi's Joint Legislative Budget Committee Budget Bulletin for fiscal year 2017 showed $8.3 billion, or 44%, of Mississippi's $18.9 billion total budget funded with federal dollars. That's up from $3.5 billion, or 35%, of Mississippi's $9.9 billion budget in 2000.
Indeed, the latest Tax Foundation rankings had Mississippi moving to the top as the government most reliant on federal aid.
But the money flowing through state government is a small part of the overall inflow of federal funds to Mississippi.
The Bureau of Economic Analysis (BEA) showed over $27 billion in transfer payments to Mississippians for 2015, more than double the $11.5 billion for 2000.
These are mostly federal funds transferred through government programs to benefit individuals. The programs include Social Security, Medicare, Medicaid, SNAP, SSI, Veterans' Benefits, Earned Income Tax Credits, Temporary Assistance for Needy Families, unemployment benefits, and education grants and benefits … all targeted for cuts under the Heritage plan.
In addition to transfer payments, funding for Mississippi’s federal employees and federal contracts would be at risk. The National Priorities Project reported that 53,720 people in Mississippi worked for the federal government in 2014 bringing in about $3.9 billion in federal funds. The think tank also reported the federal government paid about $3.8 billion to vendors to perform contracts ranging from supplying the military with weapons to building websites.
The Pew Charitable Trusts estimates 32.9% of Mississippi gross domestic product (GDP) comes from federal spending.
Surely state leaders are not ignorant of the economic risks posed by proposed cuts and are readying plans to cope with what Washington decides?
They owe it to taxpayers to reveal their readiness and plan details.
Standard and Poor’s, Fitch, and Moody’s credit rating services, which have recently issued negative outlooks on state finances, probably want to know too.
Crawford is a syndicated columnist from Meridian (crawfolk@gmail.com)
Saturday, May 13, 2017
Bill Crawford: Mississippi is a federal junkie
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13 comments:
Nothing like a welfare slut!
Given its current organizational structure, there is no way the state can survive without the current level of federal support, that's not to say that Mississippi could not be weened off gradually. Unfortunately, our strength lies in career politicians making deals to bring funding to the state in a number of ways. Unless the legislature looks very hard at some sweeping consolidation and embraces technology in a more meaningful way, the 1 and 2 percent cuts recently directed by the Governor will amount to nothing more than a rounding error in the new budget. And, rather than consider the overall fiscal health of state government and the citizens it supposedly serves, state government leadership has focused on self-preservation and the building of inefficient and duplicative fiefdoms.
My business has quit seeking state contracts all together - the arcane rules and ignorant state workforce make it impossible to get anything done, and we usually lost money because the agencies we worked with couldn't get their shit together.
Reorganization is painful and managing change is very hard to do successfully; but our state leaders can either make the hard and unpopular decisions now, or wait until it becomes a real emergency.
Is there any news in this contributing article?
Mississippi went big for Trump so he will never cut federal spending in Mississippi!
I'm sick of these articles bemoaning the coming budget cuts in Mississippi. The voters in Mississippi asked for Trump and budget cuts. Keep cutting! Stop the flow of federal dollars into this state. Shut down needless and wasteful "businesses" like the Stennis Space Center. Let this state be a model to the country, we don't rely on federal dollars. Cut out those tens of thousands of federal jobs in this state. If you're a career federal or state employees, you should prepare to move out of Mississippi, find private sector work, or starve.
to all the tea baggers and right wing nut cases here in mississippi who want federal spending slashed, (they love that word. it sounds so badass .) BE CAREFUL WHAT YOU WISH FOR. if federal spending is cut in mississippi this state will turn into a bigger third world backwater than it is now.
We don't need no stinkin' "top-notch" finance experts. We've got Crawford. He's told us repeatedly over the years that Kemper was, and remains, a great decision.
It isn't surprising. Mississippi is mostly rural with few natural resources. As far as the private sector
providing enough jobs for Mississippians keep dreaming.
https://wallethub.com/edu/states-most-least-dependent-on-the-federal-government/2700/
I don't think our legislature or the tea party minded voters will realize the negative effects of this until this hits them personally. That's just how things work. It wouldn't be so concerning if they( the state govt) addressed this problem with practical solutions on the state level and had a plan besides tax shifting.. This "government should do absolutely nothing" mindset is just job security for pols that don't plan to do squat and never will do squat.
Taxing Air BnB isn't exactly a comprehensive solution to the problem at hand. Our unemployment rate is 'bout to go back up in ways we never imagined.
My experience in state government is that budgeting decisions to in luxe participating in programs, hiring, travel etc. is based on whether it's local, state or Federal dollars being spent. If it's Federal dollars it seemed decision making was much akin to winning a lottery, its free money so let's hire someone, buy another vehicle or travel
To some of Doric destination for a week to attend a two day workshop. Just a culture of many years.
KF is reconsidering his relationship with Crawford and is exploring his options with the estate of Bill Minor.
I been saying this all along, thank God I have the resources to move when the gravy train dries up. It won't be the cheapest state to live in once the federal dollars are gone.
GOVERNMENT....... THE ONLY GROWTH INDUSTRY IN MS
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