Analysis: Mississippi in line for savings account boost

Mississippi may be making its first big deposit into its savings account in several years, but state government is still lacks enough savings to ride out a substantial downtown in revenues.

Posted: Sep 10, 2018 9:23 AM

JACKSON, Miss. (AP) — Mississippi may be making its first big deposit into its savings account in several years, but state government is still lacks enough savings to ride out a substantial downtown in revenues.

The Department of Finance and Administration is still in the process of closing the books on the year ended June 30, but spokesman Chuck McIntosh said the department estimates the state will have about $55 million to put into the rainy day fund. Overall, McIntosh said estimates show state government finished the 2018 budget year $110 million in the black. That's higher than earlier estimates circulated among lawmakers. Most of the remaining surplus would go to financing improvements on state government buildings.

The deposit could come a year after lawmakers raised the legal limit on the savings account from 7.5 percent of the state's $5.5 billion General Fund to 10 percent of the fund. However, the state currently only has $290 million in what's properly known as the Working Cash Stabilization Fund, just over 5 percent of state revenue raised for the General Fund. The balance had been going the wrong way in recent years as Gov. Phil Bryant dipped into the fund to offset weak revenue. It had been above $400 million in the 2015 budget year.

Lawmakers in some years have intercepted money that would otherwise go to reserves, which might be an attractive proposition as the state considers a pay raise for teachers, demands for higher contributions to employee pension funds, and other election-year spending demands. However, House Appropriations Committee Chairman John Read, a Gautier Republican, said last week he thought such a diversion would be unlikely.

"I think it will go through," Read said. "The more you have, the better off you are."

Boosting reserves could improve Mississippi's ability to withstand the next recession without major cuts to services, and the last recession is a stark lesson in what can happen. General Fund spending fell 13.5 percent from its peak in the 2008 budget year to the trough in the 2010 budget year. Because of federal assistance to states, though, Mississippi didn't break open the piggy bank until 2012. The state spent nearly $800 million over three years, though, trying to forestall service cuts.

If revenue fell 11 percent in one year, as it did from 2009 to 2010, Mississippi would need more than $600 million to prevent cuts. The state presumably wouldn't have the money, since the rainy day fund is limited to 10 percent of the General Fund.

The Pew Charitable Trusts, which researches state financial issues, says rainy day fund balances rose nationwide in the 2017 budget year to enough to run a typical state government for 20.5 days, a new high. Right now, Mississippi could finance 19 days of General Fund spending, less than the typical state. If the $55 million deposit goes through, that would rise to 23 days.

The good news from Pew is that Mississippi's tax revenue is less volatile than an average state, meaning it moves up and down less. Of the three major Mississippi tax sources Pew examines, corporate income is the state's smallest and most volatile, followed by personal income taxes and then sales taxes. And improving state revenues got a vote of confidence last week when one of the three big credit rating agencies shifted its outlook for state government finances from negative to stable.

But Pew warned Aug. 29 that Mississippi and others have less money in the bank than before the last recession, saying reserves "could cover a smaller share of government spending than they could have heading into the 2007-09 recession."

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 314710

Reported Deaths: 7254
CountyCasesDeaths
DeSoto21646260
Hinds20369416
Harrison17949309
Rankin13643278
Jackson13450246
Madison10113217
Lee9986174
Jones8384163
Forrest7689152
Lauderdale7198240
Lowndes6403148
Lamar623686
Lafayette6203119
Washington5341134
Bolivar4802132
Oktibbeha462998
Panola4596107
Pearl River4519146
Marshall4450103
Warren4393121
Pontotoc420872
Monroe4115133
Union411176
Neshoba4031176
Lincoln3969110
Hancock379586
Leflore3498125
Sunflower336290
Tate334784
Pike3327105
Scott316274
Alcorn313368
Yazoo311770
Itawamba300577
Copiah297465
Coahoma295579
Simpson295388
Tippah288768
Adams286982
Prentiss280060
Marion269380
Leake268473
Wayne262841
Grenada261587
Covington259881
George248148
Newton246862
Winston227581
Tishomingo227067
Jasper221148
Attala214473
Chickasaw208057
Holmes189174
Clay185554
Stone182833
Tallahatchie178941
Clarke178080
Calhoun170932
Yalobusha164638
Smith162534
Walthall134245
Greene130633
Lawrence128724
Montgomery127142
Noxubee126734
Perry126338
Amite123142
Carroll121829
Webster114532
Jefferson Davis107133
Tunica105726
Claiborne102430
Benton100025
Humphreys96733
Kemper95828
Franklin83923
Quitman81116
Choctaw76418
Wilkinson67531
Jefferson65728
Sharkey50217
Issaquena1686
Unassigned00

Alabama Coronavirus Cases

Cases: 539829

Reported Deaths: 11038
CountyCasesDeaths
Jefferson798271529
Mobile41261809
Madison35132506
Tuscaloosa25915455
Shelby25294249
Montgomery24705593
Baldwin21392310
Lee15987172
Calhoun14569319
Morgan14422280
Etowah13918353
Marshall12275225
Houston10641282
Elmore10147206
Limestone10065151
St. Clair9946245
Cullman9761194
Lauderdale9457243
DeKalb8865188
Talladega8339176
Walker7260278
Autauga7001108
Jackson6836112
Blount6771139
Colbert6320135
Coffee5578118
Dale4876113
Russell445138
Chilton4369113
Franklin426282
Covington4138118
Tallapoosa4044153
Escambia394777
Chambers3590123
Dallas3568153
Clarke351461
Marion3137101
Pike311977
Lawrence302698
Winston275773
Bibb264564
Geneva254078
Marengo249665
Pickens234862
Barbour232056
Hale223978
Butler219069
Fayette212662
Henry189643
Cherokee184645
Randolph182442
Monroe178141
Washington167739
Macon161150
Clay157157
Crenshaw153557
Cleburne149641
Lamar143236
Lowndes140553
Wilcox127430
Bullock123242
Conecuh110829
Coosa109228
Perry107826
Sumter104932
Greene92634
Choctaw61024
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High pressure will continue to dominate our weather forecast for the end of the weekend. We will see our area filled with plenty of sunshine but clouds will be on the increase into the evening hours. There will be some changes for the start work week in our weather forecast as low pressure brings back some chances for showers and thunderstorms.
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