DOWN TO THE WIRE: Dems say they have Medicaid deal; Barbour still must sign bills before deadline

June 30, 2009



JACKSON -- Legislative leaders expressed confidence the House and Senate today will finalize the state budget just hours before the new fiscal year begins at midnight. 


This would come after three days of cranking out more than 100 appropriation bills -- including one for the Medicaid program that''s been the main sticking for months. 


"I am committed to seeing our entire work completed on time so that no state agency or citizen will suffer," said Lt. Gov. Phil Bryant, who presides over the Senate. 


House Democrats last night said they finally found a compromise with Republican Gov. Haley Barbour and the GOP-controlled Senate on how to keep alive the Medicaid program, which provides health care for about 600,000 poor people in Mississippi. 


The $4 billion program expires tonight if no laws are enacted to reauthorize and fund it. 


"I can''t guarantee anything, but I feel from the bottom of my heart ... we can get the enabling bill passed and funded," said House Speaker Billy McCoy, D-Rienzi. 


The Medicaid funding agreement includes a $60 million-a-year hospital tax that could go up to $90 million in a couple of years. House negotiators also agreed to preserve some of the budget-cutting authority the governor had been demanding for when Medicaid encounters deficits.  


The Legislature ended its regular session June 3 after the House and Senate couldn''t reach a budget agreement for all of state government. It was supposed to have been made in late March, but revenue shortages, questions about federal stimulus funds and disputes over Medicaid have bogged down legislators. 


Faced with the prospect of chaos if state government began the new year Wednesday without its appropriations. Barbour ordered the Legislature back Sunday for a special session. He had earlier said he could operate state government without the Legislature passing the budget on time. 


"Much progress is being made. However, significant challenges remain," Bryant said in a statement he issued last night as the Legislature worked until about 11 p.m. on budget bills. 


The House and Senate last night did give final approval to a 25-cent-a-pack tax increase on cheap-brand cigarettes to generate an estimated $9 million a year. This is in addition to the 68-cent tax increase enacted in May on all cigarettes -- premium and cheap brands -- to generate about $106 million a year.  


The House and Senate are aiming to have all the spending bills finalized by noon and sent to Barbour for him to approve.  


However, Rep. Jeff Smith, D-Columbus, said Barbour must work hard to review and sign more than 100 bills before midnight. 


"I''m worried the agencies will start Wednesday without the authority to spend money," Smith said. 


One point of contention between the House and Senate concerns more money for the state''s depleting car tag reduction fund, which is suffering a shortfall because of sluggish car sales tax collections. 


Lawmakers are clamoring to prop up the fund, which enables counties to reduce the price of car tags. While the Senate has voted to give the fund a $27 million subsidy, the House voted to provide another $37 million to be taken from Mississippi''s rainy-day fund. 


With $95 million already spent from that $365 million reserve fund, Senate leaders and Barbour have said they will not dip farther into it. 


While the Legislature has been struggling with revenue shortfalls due to the economic recession, the budget being finalized today has about $250 million more than what was appropriated in 2008. This is due in large part to the federal stimulus funds the U.S. Congress provided earlier this year to help states cope with the financial downturn.  


For the fiscal year ending today, state government began last July with about $20 billion in state and federal funds, according to the Legislative Budget Office. The state funds amounted to about $5.6 billion. 


For the fiscal year beginning Wednesday, about $5.9 billion in state funds is being spent, according to the LBO''s preliminary tally of appropriations to be sent to Barbour today. 


This is the first time in four decades Mississippi has come this close to starting a fiscal year without a budget. The state in 1968 began the fiscal year without funds as the Legislature struggled to pass budget bills. 


Legislators this year felt much public pressure to act before the fiscal year begins, said Mississippi University for Women political science professor Brian Anderson. 


"It seems more likely both parties (Democrats and Republicans) will be blamed by a public who sees a (government) shutdown as an unnecessary magnification of the current economic woes," Anderson said.  


"The public may not care much about the details of how a bill becomes law, but they react negatively when supposedly overpaid politicians let business sit on their desks -- especially if it means people go without paychecks or services."