JACKSON - Gov. Ronnie Musgrove praised Sunday the end of the 2003 legislative session that saw he and lawmakers agree on a proposal to shore up the budget without cutting services or raising taxes.
"An essential point of a good budget is not to spend all of your savings account. That's why I vetoed the bill the other day. By working together, we have not spent all of our savings, and we have money to deal with any revenue shortfalls," Musgrove told reporters after lawmakers adjourned for the year.
In tough economic times, Musgrove said it was important for lawmakers to use available sources for money.
Lawmakers worked through the weekend to find how to shuffle money to pay for the $3.6 billion budget for the fiscal year starting July 1 and still be able to pay the bills.
The House adopted the compromise funds transfer bill 112-9, and the Senate passed it later with no opposition.
"This is a fiscally sound plan," said Lt. Gov. Amy Tuck. "No one was happy with the prospect of using the rainy day fund, cutting services or raising taxes. This proposal allows us to maintain vital services and fully fund education without going into debt."
Senate Appropriations Committee Chairman Jack Gordon, D-Okolona, said the bill provides enough money to cover the deficits in Medicaid, corrections and other agencies and pay for education and other programs at the beginning of the fiscal year.
In the House, Rep. Bobby Moody, D-Louisville, said about $84 million will be used immediately to address the deficits. Moody said on July 1 more than $267 million would be transferred from various agency accounts to the treasury.
Musgrove had vetoed a similar bill that he said wiped out a rainy day fund used for emergencies and budget shortfalls when the Legislature is not in session.
By law, the state appropriates only 98 percent of its general fund tax collections. The remaining 2 percent is set aside to be used if tax collections do not come in as expected. The bill vetoed by Musgrove also would have amended the law so that the 2 percent money could be spent.
As part of the compromise, lawmakers agreed to spending the 2 percent for one year only.
The compromise enacted Sunday would still allow lawmakers to allocate all the money in the rainy day fund but replenish it with $50 million on July 1 by borrowing from the accounts of various state agencies. About 40 state agencies have deposits totaling nearly $1 billion, lawmakers said.
The compromise also resolved a dispute over Medicaid. House members wanted language protecting Medicaid from cuts, but the Senate resisted it.
Medicaid faces a $91 million deficit next year.
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