How is the House Budget Proposal different from Governor Barbour’s Plan?

The Governor is pleased that Speaker McCoy and others in the House of Representatives adopted many of the recommendations of Operation: Streamline, including the Governor’s proposals to:

• Restore funding for higher education and workforce development
• Reform the Division of Medicaid
• Reform the Department of Corrections
• Reform the Bureau of Narcotics
• Combine the Administrative functions of small, regulatory agencies
• Consolidate the business functions of our Universities and community colleges
• Consolidate the business functions of the Department of Mental Health.

Despite these many areas of agreement, some significant differences remain. The Governor looks forward to working with the Legislature on these issues to ensure that we will enact a budget which encourages job creation while putting us on a path to long-term fiscal responsibility and sustainable spending.

Management of State Government
The House’s proposal to enact a hiring freeze and prohibit transfers of funds within state agencies would prevent the executive branch from even the most basic of state government operations. Furthermore, a new hire might be replacing two other positions, resulting in net salary savings, but that would not be allowed under this legislation. Or new hires might bring new approaches and ideas to saving much more in taxpayer dollars than the cost of a salary. Moreover, the House plan even prohibits the Governor from choosing his own “will and pleasure” appointments. Taken together, these proposals usurp the Governor’s already limited authority to manage state government.

Governor Barbour believes that to save money and increase efficiency, we should remove from the purview of the State Personnel Board almost all of the agencies which report directly to the Governor. This would allow Executive Directors to efficiently respond to changes in service demands, technology, and budget constraints by smart-sizing state government. The Governor’s budget establishes the goal of restructuring state government to provide government services smarter, better, and at a lower cost to the taxpayer. For example, the Governor proposed integrating the administrative functions of the Bureau of Narcotics with the Department of Public Safety to save money and to provide coordinated support for local law enforcement. Also, to better emphasize the role of local law enforcement, the Governor is transferring the homeland security operations from the Mississippi Emergency Management Agency to the Department of Public Safety. However, the House budget plan would prevent the implementation of these plans.

Honest Budgeting
Governor Barbour’s budget is based on the same conservative growth estimate which the Joint Legislative Budget Committee unanimously used to prepare the Legislative Budget Recommendation. While the Governor hopes that more revenue will materialize, revenue trends in recent months do not provide enough evidence to revise the growth estimate at this time.

The House plan unilaterally revises the budget estimate, although by law, this can only be done by the Joint Legislative Budget Committee during a Legislative session. This, combined with greater use of one-time special funds, questionable bond repayment proposals, and dipping into the principal of the tobacco trust fund, would keep us from digging out of our budget hole in the next two years.

Governor Barbour’s budget plan contains no new taxes and Governor Barbour will veto any bill that raises state taxes. Governor Barbour’s definition of a new tax is anytime more taxes are paid to the state government in exchange for no increase in state services.

The House budget plan raises taxes on small businesses and Mississippians through higher taxes and fees on environmental permits, sales tax processing, driver’s licenses, motor vehicles, and insurance. The House plan also passes along tax increases through higher fees on local governments.

Health Insurance for State Employees
Governor Barbour wants to give state employees more 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 the state’s taxpayers.

The House plan would continue the one-size-fits-all current approach to state health insurance, the costs of which could rise by 23 percent next year. The House plan spends $55 million to subsidize the failing health insurance system for state employees. This is money which could go to other government programs such as education, but is required to pay claims as soon as November 2004 if the plan is not reformed. It would be fair to give additional options to state employees and teachers whose different ages, incomes and situations call for different types of insurance coverage. If we do not reform the health plan, we only postpone the problem for a year and the health insurance deficit will grow even larger.

Governor Barbour’s budget eliminates the proposed cuts to Universities and Community Colleges. This proposal was the largest spending increase in the Governor’s budget. For K-12, the Governor accepted the funding level unanimously recommended by the Joint Legislative Budget Committee, which provided money for another teacher pay raise, but cut funding for the Mississippi Adequate Education program. However, even in these tight budget times, Governor Barbour believes that funding for education must continue to be the top funding priority of state government. That is why he is committed to working with the Legislature to find more money for K-12 education.

The House plan almost fully accepts the Governor’s funding recommendation for higher education, while increasing funding for K-12 to the FY 04 level plus the amount needed for the teacher pay raise. This is a goal shared by the Governor and Legislators alike, but the issue is how do we get the funds? For example, in his budget, the Governor did not raid the teacher supply fund, as the House did to provide $16 million for other parts of the education system. We should focus on reforming state government so that we can continue to fund all levels of education at a sustainable growth rate.

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Governor Haley Barbour
P.O. Box 139 Jackson, MS 39205
Phone: 601.359.3150 Fax: 601.359.3741

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