Mississippi government is shrinking

THE legislature is in session and big money is on the line – $21 billion. This represents 18.3 percent of Mississippi’s total GDP of $115 billion.

Mississippi citizens need a clear understanding of the budget. In the end, our votes make the difference.

The Mississippi Legislative Budget Office has a website with detailed information on the budget. Some of the data is confusing, even contradictory, but I have extracted and summarized the data to the best of my ability.

For the 2019 data, I downloaded the report “Budget Summary 2018 Legislative Session.” For the 2010 data, I downloaded the report “State of Mississippi Budget Fiscal Year 2010.”

There are two main ways to observe the state budget: The first way is the “general fund.” This is where state taxes go to fund the state budget. This year’s general fund is $5.5 billion.

Then there is the much larger budget of “total appropriations.” This includes not just the general fund but also federal grants and special purpose funds. For instance, the Mississippi Department of Transportation gets all of its money from the gas tax special purpose fund and federal grants. There is no money budgeted for MDOT through the general fund.

First the big picture: The total state budget is up five percent over the last nine years, compared to inflation during that period of 17 percent. So in real dollars, the state budget has declined dramatically.

This is a huge change from the previous decade, when state budget doubled over 10 years and grew at twice the inflation rate.

There is one factor that skews the numbers. In 2010, the Mississippi Economic Development Authority received $1.8 billion in federal funds, presumably the last of the Katrina money, so the “Ag and Ec. Dev.” 2010 line item is unusually high.

Between 2000 and 2010, federal money increased from $6.4 billion in 2000 to $15 billion in 2010. Since then, it has leveled off.

The big ticket item is Medicaid. The state is having to pay far more of its share of Medicaid than it used to.

In 2010 Mississippi was paying five percent of the total Medicaid cost. But by 2019, Mississippi’s share rose to 13 percent – causing the biggest single increase in the general fund budget.

This is a result of the state being one of 14 states which hasn’t expanded Medicaid. A Brookings Institute report “Do States Regret Expanding Medicaid,” details how the expansion of Medicaid actually lowered states’ share of the overall costs, bringing in billions without significant extra state costs.

Mississippi, being a poorer state, would have benefited even more than many other state, providing federal manna from heaven, but our Republican state leaders wouldn’t touch anything associated with Obamacare. This is called cutting off your nose to spite your face.

Public education is the next big item. Over 10 years the public education total budget increased two percent, well below the 17 percent inflation rate. So in real dollars, we are spending 15 percent less than 10 years ago on public education.

State spending on higher education is down 14 percent – about 30 percent down adjusted for inflation. Fortunately, federal research grants and other funds have offset some of these cuts. Meanwhile, college tuition costs have risen dramatically.

Social welfare has skyrocketed both in the general fund and total budget. These are dozens of programs administered by the Department of Human Services, such as child protective services, food stamps, child support, early childhood development and unemployment compensation.

Transportation is up four percent in real dollars, down 14 percent adjusted for inflation over 10 years. All this money comes from federal grants and the gas tax.

Mental health services have declined dramatically as the feds have pressured the state to close down centralized facilities. That’s one reason for more mentally ill homeless on the streets. Public health funding is also down in nominal and inflation-adjusted dollars.

Corrections has risen significantly. This is one reason the legislature is pushing for alternative courts for addicts and the mentally ill. Locking people up is expensive.

The judiciary and courts are costing a lot more. We have funded a new statewide public defenders agency (a good thing) and the computerization of courts is expensive. The attorney general’s budget, trial judges and district attorneys are all costing a lot more money.

Fiscal affairs include the state auditor’s office, tax commission, treasurer’s office and the Department of Finance and Administration. It’s up mainly because that category now includes the Department of Information Technology, with its $27 million budget.

Big picture is this: After decades of rapid growth fueled by oceans of federal dollars, the state budget is now shrinking when adjusted for inflation. The federal spigot is getting turned off by a combination of federal debt and Mississippi Republicans.

Like it or not, that probably explains why Mississippi has quit growing for the first time in 50 years.