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Governor Bryant Releases FY 2013 Executive Budget Recommendation

February 2, 2012

Filed under: Budget & Tax — Tags: appropriations, budget, Department of Revenue, Governor Bryant, legislature, MAEP, Medicaid, Mississippi, Mississippi Adequate Education Program, schools districts, smart budget act, State Personnel Board, taxes — admin @ 8:26 AM

Earlier this week, Governor Bryant released his Executive Budget Recommendation for FY 2013. The budget is to provide guidance as the legislature creates the budget.

It will be considered by the legislature in addition to the Joint Legislative Budget Committee’s recommendation and Governor Barbour’s recommendation that was released last Fall.

Bryant’s budget has some good elements as well as some proposals that bring cause for concern. The key components of Governor Bryant’s recommendation are below:

Small Increase for Department of Revenue
Bryant recommends a small $5million increase for the Department of Revenue to fund auditors who will collect more in taxes. It is estimated that the $5 million increase will bring in over $10 million in revenue owed to the state. However, even with the increase, the Department is still recommended for funding at a level below even FY 2011 levels.

Reduced Use of One Time Funds and No New Revenue
Bryant recommends reduced use of so called “one time” special funds for recurring budget items. This budgeting recommendation would make budgeting more straightforward. However, Governor Bryant is opposed to raising taxes and would make up for the reduction in funds with a cuts-only approach.

Lump Sum Authority and State Personnel Board Waiver
Bryant recommends that agencies be given “lump sum” appropriations. Currently, funding is granted with certain amounts provided for specific budget line items, like personnel, travel, equipment , etc. “Lump Sum” appropriations would allow agencies to move funds across budget categories without legislative approval. Waiving State Personnel Board protections would allow agency directors to make personnel changes regardless of an employee’s state service status. State Personnel Board protections promote a public sector work environment free from undue political influence.

Implement Performance Based Budgeting
Bryant recommends passage of the Smart Budget Act which would incorporate Performance Based Budgeting. For more information about Performance Based Budgeting see MEPC’s recent blog series on the subject.

Keep Medicaid Funding Level Despite Projected Increase in Participants
Governor Bryant recommends level funding for Medicaid. However, more participants will likely necessitate either cuts in services provided or cuts to reimbursement rates for providers.

Cuts for Education
Governor Bryant recommends a $72.9 million reduction in state funds for the Mississippi Adequate Education Program. Both Governor Barbour’s and the JLBC budget recommended level funding for MAEP. None of the budgets recommend full funding for the formula that allocates state funding across the state’s school districts. Bryant explains the reduction by suggesting that school districts use their own reserve funds to make up for the cut. School district fund balances are used for cash flow throughout the district’s fiscal year due to irregular funding schedules and for capital expenses. Furthermore, the amount held by schools districts vary greatly from district to district. Intending to address this concern, the Governor recommends only $6 million for an emergency loan fund for school districts with inadequate reserves.

While some of Bryant’s recommendations would improve revenue collection and make the budget process more straightforward, many of the recommendations would continue the “cuts-only” approach of the last administration. A balanced approach that includes new revenue would help the state invest in education and workforce development—both important for the state’s prosperity in the future.

Author: Sara Miller, Senior Policy Analyst

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Budget Reform with Performance Based Budgeting, Part Two

January 31, 2012

Filed under: Budget & Tax,Budget Reform,Performance Based Budgeting — Tags: budget, evaluate performance, funding decisions, Mississippi, performance based budgeting, programs, public programs, smart budget act, tax, tax expenditures — admin @ 8:17 AM

Last week, in part one of our examination of budget reform, we discussed some of the basics of Performance Based Budgeting. This week, we will outline some concerns about the how Performance Based Budgeting might be implemented.

Performance Based Budgeting aims to collect and evaluate performance data on programs and use that data to inform funding decisions. However, its effectiveness much depends on how a program’s performance is defined and how the data collected are used.

First, the standards by which public programs are measured should be crafted with public input and with acknowledgement of the outside factors influencing their results.

By their very nature, state agencies deal with complex problems, often with multiple influencing factors and without easy ways to measure results.

Second, budgeting decisions should continue to be based primarily on public needs and priorities.

While the budget process is not always smooth, the reason budget decisions are made by our legislature is because they reflect the priorities of the public through representative government. The most “successful” programs may not be the priority programs or vice versa. Would one want to cut public safety spending, because the crime rate went up?

Third, after years of budget cuts, how does one account for the chronic underfunding of programs contributing to an agency’s shortcomings?

Many programs have had year after year of budget cuts. The Mississippi Adequate Education Program is in line to be underfunded by about $1 Billion since it was last fully funded in 2008. Responsible implementation of Performance Based Budgeting would take into account lower funding levels and their impact on a program’s performance.

Finally, Performance Based Budgeting, if implemented, should be applied to all state programs, including those administered through the tax code, like economic development tax breaks.

Performance Based Budgeting is designed to judge the effectiveness of programs funded through the appropriations process. However, tax expenditures and incentives should also be reviewed for their effectiveness. They are enacted for a public purpose but are not regularly reviewed and in most cases data are not available to the public about how they are used.

Performance Based Budgeting can be used to inform the budget process and to improve budget transparency. It should not however replace public budget deliberations that take into account the needs and priorities of the people.

In the final post from this three part series, we will look at how Performance Based Budgeting is being used in other states.

Author: Sara Miler, Senior Policy Analyst

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State of Working Mississippi 2012 Chapter 1: JOBS

January 26, 2012

The release of MEPC’s State of Working Mississippi 2012 reveals that the 2000s challenged many Mississippi businesses, as well as working adults and their families. Chapter 1 of the report details trends in the state’s workforce, jobs and unemployment.

CHANGE IN EMPLOYMENT BY DECADE

Mississippi’s job losses in the 2000s appear particularly harsh when compared to the growth of the 1990s (see chart). Mississippi’s employment grew by 23.2% during the 1990s, in contrast to a 5.5% decline in the 2000s. The South experienced similar trends of strong job growth during the 1990s; however, the region did not experience the same level of overall decline in the last decade.

The latest data reveals that Mississippi was one of four states with an unemployment rate still above 10% in December 2011.

SHIFTS IN EDUCATIONAL ATTAINMENT AND AGE OF WORKFORCE

The percentage of workers with at least a bachelor’s degree rose to 22.8% during the decade, and 57.1% of the workforce has taken at least some college coursework. Even with gains, the state’s portion of adults with college experience registers below national norms (60.5%). Overall, more than 350,000 working-age adults still lack a high school diploma and college experience.

Older adults now represent a larger share of Mississippi’s workforce. Throughout the economic downturn in the late 2000s, many Americans delayed retirement to build economic security after suffering financial losses. In 2000, 13.3% of Mississippi workers were age 55 or over. By 2010, 18.7% of Mississippi’s labor force was at least 55 years old. In contrast, younger Mississippians now represent a smaller share of the state’s workforce.

RECOMMENDATION: (For full recommendations see complete State of Working 2012).

Increase wrap around supports for adults in adult basic education, job training and post-secondary courses. Strong wrap-around support services are critical for adults returning to school with the hope of gaining skills and moving into higher wage employment. Without these resources, even the strongest students will struggle to meet both the needs of their families and the demands of training. Examples of supports include: transportation vouchers, child care and staff dedicated to helping adults in adults basic education and GED programs transition to college-level classes.

Tomorrow: The SOW 2012 series continues with a closer look at wages by race, gender and educational attainment.

Author: Sarah Welker, Policy Analyst

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INTRODUCING THE STATE OF WORKING MISSISSIPPI 2012

January 25, 2012

Many communities across Mississippi continued to experience persistently high unemployment and underemployment, stagnant wages and economic insecurity. However, the state’s workforce remains resilient and continues to be one of the state’s greatest assets. Understanding how workers, industries and families have been affected over the last decade can lay a foundation for building up the workforce in the years ahead.

MEPC’s latest report, State of Working Mississippi 2012 is a comprehensive piece that looks at key aspects of the economy affecting Mississippi’s workforce from 2000 to the present. Specifically the report:

Inspects changes in critical areas of Mississippi’s economy since 2000 including: jobs, the workforce, wages, income, and state revenue.
Compares information in these areas with trends nationally and among Mid South states.
Examines each of these areas through the lens of race, gender and educational attainment.
Summarizes key takeaways and makes recommendations in each chapter for advancing working Mississippians and their families.

SELECT FINDINGS FROM STATE OF WORKING MISSISSIPPI 2012

TWO RECESSIONS RESULT IN JOB LOSS OVER THE DECADE

In Mississippi, employment peaked in February 2008 and then steeply declined until February 2010. In total, Mississippi lost 76,800 jobs over the two-year period. Mississippi’s job losses in the 2000s appear particularly harsh when compared to the prosperity of the 1990s. Mississippi’s employment grew by almost 25% during the 1990s, in contrast to a 5.5% decline in the 2000s. The Southern region and the United States experienced similar job growth during the 1990s; however, neither the South nor the nation experienced the same level of overall decline in employment in the 2000s.

MISSISSIPPI WORKERS EXPERIENCE LITTLE CHANGE IN WAGES

Many members of the state’s workforce have not seen an improvement in their wages since 2000, as companies were hit hard by two economic downturns, and state and local budgets tightened. The inflation-adjusted median wage in Mississippi grew marginally from 2000 to 2010, from $13.13 to $13.45. The gap between men’s and women’s wages narrowed over the decade, while the wage gap between white and African American workers persisted from 2000 to 2010.

WORKFORCE ADVANCES IN EDUCATIONAL ATTAINMENT

Mississippi’s workforce advanced in educational attainment over the decade, but needs to raise skill levels further to reach national norms. In 2000, 20.8% of the workforce received a bachelor’s degree or higher compared to 22.8% in 2010. Overall 57.1% of the state’s workforce has taken at least some college classes. However, over 350,000 working-age adults still lack a high school degree, and the share of workers without high school equivalency is larger in Mississippi than in the U.S.

Over the next several days we will take a closer look at the key findings and recommendations from each chapter of the report.

Author: Sarah Welker, Policy Analyst

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Budget Reform with Performance Based Budgeting

January 24, 2012

Filed under: Budget & Tax — Tags: budget, Mississippi, performance based budgeting, smart budget act — admin @ 8:01 AM

With the beginning of the legislative session and change in executive leadership, there has been renewed talk of state budget reform. Budget reform is necessary to improve the transparency of the process and to increase budget accountability.

One proposed reform includes Performance Based Budgeting. Performance Based Budgeting reforms aim to use data about the effectiveness of programs to inform budget decisions. Performance Based Budgeting can accomplish some of these goals. Budgeting is complicated, however, and any reform should be made with care.
In this three-part blog series on Performance Based Budgeting, we will delve into those issues. In part one we will go over a few basics about Performance Based Budgeting.

Performance Based Budget reforms seek to collect and evaluate performance data on programs and use that data to inform funding decisions. There are a wide range of budget reforms that can fall under a performance based budgeting system.

According to the National Association of State Budget Officers, twenty five states use some kind of performance budgeting. Mississippi currently collects some performance information that is reported by state agencies to the Joint Legislative Budget Committee annually on their agency budget request.

Last year, the State Senate passed the Mississippi Smart Budget Act (SB 2301) that would have implemented some performance based budgeting reforms. However, the bill was not passed in the House. It is likely that a similar bill will be introduced during this legislative session.

The next blog post in this series will explore some challenges to the implementation of effective Performance Based Budgeting and some concepts/questions that should be considered if it is to be implemented in a constructive manner.

Read my opinion piece on this in the Hattiesburg American.

Budget Reform with Performance Based Budgeting, Part Two

Author: Sara Miller, Senior Policy Analyst

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