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Windfall sweetens budget impasse


Staff and Wire Reports



JACKSON -- Microsoft Corp.''s settlement of an antitrust lawsuit filed by the state of Mississippi will result in a payment of $40 million in about 40 days, and the House''s Democratic leaders say the windfall should lead to a breakthrough in stalled state budget talks. 


However, the state''s Republican leaders don''t see this money as the key to reconciling the differences that have kept them apart from the House of Representatives. 


"The size of this settlement isn''t the magic wand that makes Mississippi budget problems disappear," said Dan Turner, Gov. Haley Barbour''s press secretary. 


But House Speaker Billy McCoy said the Microsoft money should "allow us to come to fruition on a positive plan for the next fiscal year." 


"Certainly this gives us a tremendous opportunity to solve some of the points of contention that we have faced in the budgeting process," McCoy said in a statement he issued Thursday. "It presents us with many possibilities that were not on the table when we last met." 


"It''s a perfect opportunity to be able to come to an amicable agreement," said House Majority Leader Tyrone Ellis of Starkville. 


However, Barbour and the Senate''s Republican leader indicated they will not support the House''s push to spend more money on schools and fund the state''s deficit-plagued Medicaid program without a hospital tax the governor wants imposed. 


"Of course, any additional money makes a budget agreement easier to reach, but one-time money doesn''t cure recurring revenue problems," Turner said. 


"Just as other sources of revenue, this will help the budget process," said Mick Bullock, communications director for Lt. Gov. Phil Bryant, who presides over the Senate. "However, the lieutenant governor does stress the importance of not using this one-time money on recurring expenses. This practice has gotten the state in financial troubles in the past." 


Mississippi Attorney General Jim Hood announced Thursday that a Hinds County judge approved a $100 million settlement of the lawsuit Mississippi filed against Microsoft in 2004. 


The suit claimed the Redmond, Wash.-based software manufacturer engaged in anticompetitive conduct that caused customers to pay more for software than they would have if there had been competition. It was similar to others filed by state attorneys general across the country. 


In addition, to the $40 million for the state treasury, Hood said Mississippi schools, businesses, local governments and others will get about $60 million in vouchers to buy software and computers with Microsoft products as part of the deal. 


Hood said he hoped the settlement would allow state lawmakers to put money in a fund that subsidizes and reduces drivers'' annual costs for car tags. 


A bill that increased the cigarette tax by 50 cents a pack was expected to add $27 million for car tags. But that would only go into the tag fund if a separate spending bill had been passed during the 2009 regular session. The session ended June 3 without an overall state budget for the upcoming fiscal year and without the earmark for car tags. 


"We are glad to bring on $40 million in 40 days because right now the Legislature really needs it," Hood said. "I have been in contact with the lieutenant governor, as well as the speaker of the house, and advised them. Hopefully, this $40 million ... will fill the gap." 


The House has been battling the governor and Senate over how much money to spend now and save later for state government, which has an annual budget of about $18 billion. 


The House has argued against the Republicans'' more conservative budget that would lay aside $60 million for another year. Democrats say putting off spending this money would cause state agencies to lay off employees and cut services. 


As the state moves close to the new fiscal year July 1, Barbour is also pushing lawmakers to approve a $90 million-a-year hospital tax to help pay for Medicaid, a government health insurance program for the needy. He also wants to save another $60 million in Medicaid federal stimulus funds to deal with budget shortfalls in future years. 


"Governor Barbour has consistently pushed for a fair and sustainable solution to Medicaid funding," Turner said. "There are a number of issues in the current budget stalemate that need to be addressed and a number of those issue deal with recurring expenses." 


Ellis noted the $40 million from Microsoft further pads what amounts to nearly $1 billion in surplus funds already stockpiled in the state treasury. Republican Senate leaders want to augment this with another $60 million from the state''s annual tobacco lawsuit payment to deal with a potential budget crunch in 2011. 


"That''s a substantial rainy day fund," Ellis said." How do you justify laying people off and cutting back on services when we have about $1 billion in the treasury? And it''s storming outside." 


Hood said those who qualify for Microsoft reimbursements must apply, submit proof of purchase and sign a release to receive vouchers of $5 to $12, depending on which Microsoft products they purchased after Jan. 1, 1996. Up to $8 million will be paid to the state if all vouchers are not claimed.




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