State revenue collections are running ahead of target. The state rainy day fund and other reserves are full of cash. Agency budget cuts appear to be behind us. Pointing to all this, Lt. Gov. Tate Reeves said "Mississippi is in our best financial and fiscal shape in our history." Speaker of the House Philip Gunn chimed in saying, "This is the result of conservative practices over the last seven years." That seven years covers the tenure of Reeves, Gunn and Gov. Phil Bryant in their current leadership positions.
So, all is good, right?
Well, not so fast, according to a column Bobby Harrison wrote last week in Mississippi Today. The state's financial condition, he said, is debatable. And debated it will be during this year's election bombast.
Here are some tidbits that will add to that debate.
Two key indicators of financial health are debt levels and debt trends. Reeves, Gunn, and Bryant took their current leadership positions in January 2012. They inherited the state's existing level of total bonded indebtedness, which was $3.8 billion on June 30, 2011, and the existing unfunded pension liability at PERS, which was $12.3 billion. During their tenure total bonded indebtedness increased to over $4.2 billion and PERS unfunded pension liability surged to $16.6 billion.
That's over 10% growth in bonded indebtedness and nearly 35% growth in PERS unfunded pension liabilities. Credit rating agencies Moody's and Fitch took notice, additionally PERS had to jack up the rate employers contribute. Debt and unfunded liability levels and trends surely don't qualify as the best ever.
Another key indicator of financial health is revenue growth in comparison to expenditure growth. State revenues, as reported in the State Auditor's Comprehensive Annual Financial Report, grew from $15.0 billion in FY 2012 to $16.1 billion in FY 2017. Over the same period expenditures grew from $15.5 billion to $16.9 billion. (The 2018 CAFR is not yet published.)
So, revenue grew 7.3% while expenditures grew 9.0% during our current leaders' tenure. That seems upside down.
One more indicator of financial health is the condition of essential infrastructure as measured by deferred maintenance estimates. (Deferred maintenance refers to needed repairs to facilities and equipment that are not made when they should be.) The state does not provide any overall data on deferred maintenance related to essential infrastructure. However, we do know there is a huge shortfall in funding available for critical road and bridge repairs, estimated at over $6 billion. The American Society of Civil Engineers estimates Mississippi's drinking water and wastewater infrastructure needs top $10 billion. And more millions are needed for school building repairs. All this is noticeably less than optimum.
So, while some things are looking up others are not, so let the debate begin over the condition of state finances.
P.S. The State Auditor publishes an annual report entitled "Expenses and Appropriations of the Mississippi Legislature." Reeves and Gunn control legislative expenses. The 2011 report showed the total cost for operating the Legislature, which included a special session, was $18.5 million. For 2018, with no special session, the cost was $24.1 million, a jump of 30%. Key increases for legislators were out-of-session per diem, mileage rates, and travel expenses – far too much is spent on out-of-state travel according to one long-time state official.
Crawford is a syndicate columnist from Meridian.
Sunday, January 13, 2019
Bill Crawford: Best Financial Shape Ever for MS?
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18 comments:
The folks that listen to this trio, are the same folks that listen to Trump. Tater, Gunn and Bryant have coditioned their supporters, lies don't matter.
I'm proud to say I've done the same thing with my family expenses. I cut back on unneeded expenses like my wife's car (she has a bicycle), the gas powered lawn mower,(push mower) cable t.v., and electricity during daylight hours. I also stopped buying meat and fruit for my family. Both are unnecessary expenses. We get our water from catch basins around the house and bathe at the bus station. The savings have been tremendous and have allowed me to afford to move away from my family and live in a brand new home with all the amenities. The kids don't complain and my wife is stupid. And we have money in the bank!
If I can do it, I know Mississippi can too.
If true, why can’t we pay our teachers a decent wage?
If true, pay our teachers a decent wage and properly fund PERS to meet the State's existing obligations to employees. Fund a special session to modify PERS for new hires, eliminate SLRP, and fix the decaying bridges and roads all over this state. We don't need any more culled beef plants, low grade coal power plants, and the endless list of shady private businesses who profit from our tax dollars. If the Legislature will do so, maybe then I'll consider returning to the Republican party.
I don't see what all the fuss is about. There is an endless flow of cash around Jackson City Hall since the bond issue. Minority set-asides are keeping the local luxury car dealers in bidness!+ Plenty of tax payer funded gatherings to attend as well. It is just like being in a big city!
The growth in the state debt would be better measured as a percentage of the Gross State Product or state revenues. It’s also important to consider what the money from gong into debt is spent on. Interest rates have been so low the last seven years, I wouldn’t be surprised if the money spent on debt service is about the same, even with the total debt load being a little higher. If the debt was dedicated to making roads and bridges better, I could argue that the state should have gone more into debt given how low interest rates have been. But if the money was spent on a bunch of pork projects or “economic development” projects that didn’t pan out, then a dollar more of debt is too much. I’d much prefer an analysis of what we spent bond money on than an arbitrary “debt is bad” mindset. It’s not like the federal government - state debt is supposed to be used for long term bricks and mortar projects that provide a long term benefit.
PERS debt is a totatly different matter. It’s a cash flow debt with no long term benefit except the theoretical one that the promise of high benefits attracts a high quality state workforce today that makes decisions which benefit future generations (highly theoretical). PERS debt is nothing more than borrowing from future generations to pay for high retirement benefits today— and a COLA that has far exceeded the actual rate of inflation. There has been a collective decision to ignore this ticking time bomb. I bet it would be even worse under a Governor Hood since a big reason for the current problem were the decisions made by Dems like Tim Ford and Ronnie Musgrove to increase benefits.
Damn this site racist
Maybe when the (public school) teachers AND ADMINISTRATORS start doing a decent job, we can pay them a fair wage.
It's pretty straightforward: If you decide not to pay what it costs to compete, you can make the balance sheet for almost any business look decent for a while.
Mississippi does not pay for adequate infrastructure or education, which artificially improves our bottom line. Ultimately, we pay for it with huge outflows of talented people and virtually no influx of economic development. Because why would you, if you had a choice?
Sort of like a failing restaurant that enjoys one decent month by skimping on the ingredients, we're trading long term customers for short term, essentially meaningless numbers.
Our anemic growth rate falls farther and farther behind the rest of the south each year, but the MSGOP sells you this Enron-style financial shell game. Because they assume you're an idiot.
2:31...Please point out one 'racist' comment posted prior to your playing 'the card'. Thanks.
A Bill Crawford column that uses a Bobby Harrison column as it’s main source.....
A friend in Chickasaw county said a bridge on hiway 41 was condemned and when Jackson was called about repairing it they recommended using a GOFUNDME account.
Don't forget--we are losing population while 3 out of our 4 toothless neighbors are gaining.
The best decision I ever made was to leave Missippi. I pay more taxes and have to pay higher insurance premiums, but it's good to know I live amongst folks who have sense now.
Member a few years ago when the state swept all the agencies' special funds into the general fund? I member.
That's why the general fund looks flush.
Heck yeah- It's all smoke and mirrors and then their booby prize sounds like a wet fart the next time the nation slips into a recession.
Mississippi government oscillates from the 'dog and pony show' of lies and empty promises to the 'smoke and mirrors show' to hide the most recent lies in anticipation of their coming 'dog and pony show.' It's a very successful operation for both parties.
@ January 13, 2019 at 2:06 PM
"PERS debt is a totatly different matter. It’s a cash flow debt with no long term benefit except the theoretical one that the promise of high benefits attracts a high quality state workforce today that makes decisions which benefit future generations (highly theoretical)."
Well, to piggyback on what you stated. They also have to hope and consider that those retirees stay in Mississippi, so those dollars stay in our economy.
That is one issue that hits northern metropolises hard, whereas there public servants do not stay in that locale, seeking warmer pastures in their later years. Arizona and Florida gains that money. Georgia, Alabama, follow in suit.
There's an opportunity there for us to gain and maintain those revenues in Mississippi.
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