Reeves releases FY2021 budget recommendations

Gov. Tate Reeves released his first budget recommendation and it largely resembles the legislature’s budget document released a few months ago.

In his fiscal year 2021 budget, Reeves wants to spend 0.2 percent more than last year, an increase of $10.7 million. The 2021 general fund budget would be $6.374 billion, up from $6.363 billion in fiscal 2020, which ends on June 30.

The legislature’s proposed budget would be $6.27 billion.

The Reeves administration wants to spend $100 million in one-time funds for workforce development, which would be spent on:

• Modernization of the state’s community college workforce training apparatus.
• Incentives for high school graduates to earn industrial credentials.
• Exposure of Mississippi high school students to computer science and coding courses before graduation.
• Dual credit programs that would allow high school students to earn credits.
• Creating affordable bachelor’s degree programs in high-growth industries.
• Incentivizing more vocational and technical courses for high schools.

The latest revenue report from December show that tax revenues are $166 million over the estimates.

As for other appropriations, K-12 education would receive an $82.6 million increase (3.2 percent) to $2.656 billion from last year’s outlay of $2.573 billion. 

Higher education would be cut by $24 million (2.8 percent) from last year’s appropriation. The Institutes of Higher Learning would take a $15.2 million cut (2.4 percent reduction) from last year’s outlay while community colleges would be cut by $9.1 million or 3.6 percent from 2020. 

According to the budget’s executive summary, those cuts were in accordance with the recommendations of the Joint Legislative Budget Committee and were the result of two circumstances of one-time money included in the last budget for specific projects or employee openings that haven’t been filled in 180 days. 

With Reeves’ last act as lieutenant governor signing off on the JLBC recommendation, it was no surprise that the two budgets are closely aligned.

Social welfare programs, such as Medicaid, would receive the same level of funding as last year’s appropriation. Corrections would also be level-funded from last year’s appropriation.

The biggest cuts, percentage wise, include:

• The state Oil and Gas Board’s general fund outlay would be reduced by $1 million (32.1 percent) from fiscal 2020.
• Department of Finance and Administration’s general fund appropriation would be reduced by 21.3 percent, shrinking from $65 million in fiscal 2020 to $51 million in fiscal 2021. 
• Mississippi Development Authority’s appropriation would be reduced from $27 million in fiscal 2020 to $22.5 million in 2021, a cut of 17.5 percent.
• The Department of Archives and History would have its outlay shrink by 14.5 percent from $11.4 million in fiscal 2020 to $9.758 million in fiscal 2021.
• The Arts Commission would have a $155,912 reduction (9.1 percent) from last year’s appropriation. 

Last year, lawmakers appropriated $6.36 billion for the state budget, a figure that balloons to $21.52 billion when federal funds are considered. 

In Mississippi, the budget process starts on August 1, when state agencies submit budget. 

The JLBC meets every September to hear agency heads make their pitches for their budget requests and to also receive estimates of the state’s tax revenues. The JLBC then meets in November to put together a budget and later releases the budget blueprint in December. The governor also submits a proposed budget as well.

Mississippi's general fund budget is one of the last tasks handled by the legislature before it leaves town in April. The budget is constructed as a series of funding bills for each state agency for the governor to sign into law. The new budget will go into effect on July 1.