JACKSON - The dirty little secret about governmental financing in Mississippi is that the state's bonded debt tripled between 1994 and 2004, our per capita debt rose faster than most other states, and our bond rating dropped.
What few Mississippians know - and lawmakers are mighty quiet about it - is that it now takes more tax money to pay interest and principal on the state's bonded debt than it does to fund some vital programs as corrections, mental health or the University Medical Center.
In actual numbers, fiscal leaders know it'll cost $280 million out of the state general fund to service our state debt in fiscal year 2006, beginning July 1.
But in the $3.9 billion state budget lawmakers finally hammered out in special legislative session in May and signed by Gov. Haley Barbour, the final figure appropriated $65 million short of what will be needed to meet state debt obligations.
That means lawmakers in January will automatically be facing a $65 million deficit appropriation to service our outstanding bond obligations, and possibly more if additional bonds are issued.
For a number of years in the 1950s, 1960s and 1970s, state lawmakers, still remembering the bad old Depression days when Mississippi had gotten itself deep in the hole borrowing money, did virtually all major state capital outlays on a pay-as-you-go basis.
Consequently, in FY 1994, Mississippi taxpayers owed a state debt of only $0.9 billion.
But when lawmakers went on a bond issuing binge during the latter 1990s, the total state's bonded indebtedness soared, and now stands at $3.5 billion as FY 2005 ends.
And another $1.5 billion in bonds that have been authorized by the Legislature have not yet been issued.
However, before citizens become overly alarmed about our rising state debt, it must be pointed out that we're still well within the state bonded debt limit written into the state constitution by voters back in 1960.
A report by State Treasurer Tate Reeves to the Legislature earlier this year showed that under the constitutional debt limit, the state actually could have issued $5 billion more bonds than it had outstanding at the start of 2005.
However, the 1960 bonding provision, which limits state indebtedness to one and one half times the state general fund collected for the past highest of four years, is overly generous in the estimation of some legislative fiscal leaders.
Rep. Cecil Brown, D-Jackson, considered by most the Legislature's top fiscal guru, said he has been planning to push a constitutional amendment to tighten the authorized state debt limit. "It's just too high," Brown declared.
Although its not time yet to panic over the rising state debt, there are, indeed, some nuggets of genuine concern for Mississippians about the trend in state borrowing in a just-released study on rising state debt by Marianne Hill of the state's Economic Research Center in the state College Board.
One alarm sounded by Hill is that while in the early 1990s Mississippi was coasting along with a per capita state debt level below the U.S. median, in the next 10 years, our per capita state debt jumped to twice the national median.
Perhaps more worrisome in the Hill study is that the state's net tax-supported debt as a percentage of personal income of Mississippians in the last 10 years grew faster than almost every other state. Only Kansas and Oregon added more per capita debt than we did.
In 1992, per capita debt in Mississippi was $240, or 2.4 percent of personal income, putting us in the lower one-third of the nation as a whole. By 2003, our per capita debt had risen to $1,200, or 5.2 percent of personal income, making us eighth in nation.
Only such noted big spenders as New York, Massachusetts and New Jersey were ahead of us in high per capita debt ratios.
Readers must be reminded that we're talking here only about state per capita debt, not the national debt. In Washington, the national debt limit has been going through the roof in the Bush years with two foreign wars, one in Afghanistan and the other in Iraq, being fought on borrowed money.
As Hill points out in her report, the federal debt currently amounts to $26,793 for every man, woman and child in the country. It has increased $1,127 per person so far in this fiscal year and hasn't stopped rising, as Mississippi's own U.S. Rep. Gene Taylor, a close national watcher, notes.
In Mississippi if you threw into our debt mix what local governments owe, the total of what Mississippi residents owe in governmental obligations would be considerably higher.
According to Hill's report, the total debt outstanding for Mississippi's local governments as of FY2002 amounted to $5.77 billion, significantly topping what the state owes
Putting together both state and local debt, our per capita governmental debt obligations would rise to $3,464, according to the Hill study.
All of the above is not to scare Mississippians, but as Marianne Hill points out, the significant shift in the amount of the state's hard-pressed expendable cash going toward debt service means there's less money to take care of our day-to-day vital services such as health or education.
