JACKSON - Whew! Boy, I'm glad we got that out of the way.
Early in the 2003 governor's race, the two leading candidates have said that despite a state government financial crisis that could well approach $650 to $700 million in 2004, no new taxes are necessary to solve the problem.
Republican front-runner Haley Barbour went on the record right out of the gate saying he was "against any new taxes" and that getting what he had called "runaway" government spending under control would be his top priority.
"Three years ago, the state was in the best fiscal condition in its history," said Barbour on Feb. 15. "Now, it's in the worst financial crisis in history."
"I'm not for raising anyone's taxes until that spending is brought under control and government begins to live within its means as Mississippi families and small businesses already have to do," Barbour said.
A combination of state agency overspending in welfare, Medicaid and corrections had led incumbent Democratic Gov. Ronnie Musgrove and the Legislature to accelerate sales tax collections, raid the state's tobacco funds, spend non-recurring special fund revenue on recurring expenses and attempt to issue bonds to pay for recurring expenses rather than to "successfully manage spending," he said.
Read Barbour's lips. No new taxes.
Now comes Musgrove, who told the Associated Press on Monday: "There is no need to raise taxes. I am advocating operating state government much more efficiently, as I have proposed in my budgets over the last three years."
Musgrove's lips appear equally read.
Musgrove and the Legislature agreed on a $3.6 billion state general fund budget for the new fiscal year that begins July 1. The patchwork budget relied on tapping millions from state special fund accounts, throwing out the rule that requires that 2 percent of tax collections be set aside and the diversion of the tobacco trust fund payment to the general fund.
Yet while Musgrove and Barbour are both dancing the "no new taxes" watusi, the facts suggest that a different tune will be called come the 2004 regular legislative session. Consider the following facts:
- No increase in spending doesn't really help stave off a tax increase. If state spending remains level next year, lawmakers will have to find at least another $495 million for the budget shortfall and for scheduled teacher pay hikes.
- Cutting government services alone won't get the job done, either. Investigative reporter Jerry Mitchell established recently that state government could eliminate 15 smaller agencies and still not find enough money to fund the teacher raises in fiscal 2005.
- Economic growth almost certainly won't be fast enough to stave off a tax hike. Even if the state's economy grew 10 percent over the next year - and no one is predicting growth at even half that level - it would generate only $360 million in additional revenues. In a worst-case scenario, that would only be just over half the money needed.
Despite Barbour and Musgrove's political aversions to talking about raising taxes, the more likely reality is that whoever is elected governor will face the prospects of both raising taxes and cutting state government services.
Musgrove's budget plan this year called for raiding the special funds, $200 million in bonding and intercepting the tobacco trust fund payment. Any way you slice it, that plan relies on spending non-recurring funds for recurring expenses.
Barbour? There's been a lot of talk about "runaway" spending but deafening silence on specifically where government spending should be cut or how to cut it.
No new taxes? The voters are simply being told what they want to hear.
