Legislators find $56.8M mistake in FY17 Mississippi budget

JACKSON, Miss. (AP) — Mississippi legislative leaders said Tuesday that they overestimated how much money the state could collect during the coming budget year by more than $56 million.

Lt. Gov. Tate Reeves and House Speaker Philip Gunn issued a joint statement that attributed the $56.8 million shortfall to a “staff error.” It is about a 1 percent mistake in a $5.8 billion general fund.

The announcement came as state agency directors were already trying to figure out how to handle budget reductions for fiscal 2017, which begins July 1. Legislators approved the budget late last month, and many departments are losing money. Some directors say they will leave jobs unfilled, while others are planning to cut services.

Republicans Reeves and Gunn said no immediate action is needed to fix the mistake in the revenue estimate. They said the shortfall could disappear if tax collections exceed expectations the first half of the budget year, from July through December.

Or, they said legislators could deal with the situation after their session begins in January. Budgets could be cut further, or the state could pull money from its cash reserves.

Gov. Phil Bryant has made two rounds of cuts during the current budget year because of lagging revenues.

The state Department of Mental Health said Tuesday that because of budget cuts entering fiscal 2017, it will close two chemical dependency units for men — one with 42 beds at the Mississippi State Hospital at Whitfield and one with 25 beds at the East Mississippi State Hospital in Meridian. Men needing the services will have to seek them from other health care providers, but that could mean new out-of-pocket expenses for some patients.

Department of Mental Health executive director Diana Mikula said other services will be reduced because of budget cuts. South Mississippi State Hospital in Purvis will close five beds for people needing treatment for serious mental illness. Ellisville State School will stop instruction for children from birth to age 3.

The Department of Mental Health had 8,971 employees in 2008, and that number dropped to 7,371 by 2015. Mikula said it’s not yet clear how many employees will lose jobs. The department will offer some of currently open positions to employees whose jobs are being eliminated as services are cut, she said.

State Treasurer Lynn Fitch on Tuesday said legislators’ overestimation of next year’s revenue could hurt the state in financial markets.

“Like many Mississippians, I am deeply concerned that the state essentially begins the new fiscal year on July 1 with an unbalanced budget,” Fitch said in a statement. “And, I fully expect that the credit rating agencies will be just as concerned.”

In late April, Fitch criticized legislators for passing a bond bill with projects she said could not meet minimum standards for the state to incur long-term debt. She also said legislators put $31 million less than needed into paying down the state’s debt.

Reeves, a former state treasurer, said April 21 that Fitch was “embarrassingly wrong” about the bond bill.

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Follow Emily Wagster Pettus on Twitter: http://twitter.com/EWagsterPettus .

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