"Thank you, Mr. Lt. Governor. As always, I appreciate your
presiding over this, our fifth State of the State together. I am
confident this term of office will be as productive as our first one.
This state would not have enjoyed the success I have been able to report
these past four years without the leadership of you and Speaker Gunn.
No governor has had the benefit of any better partners along the path to
Mississippi’s future. I earnestly and sincerely thank you both and your
honorable membership.
Each year I have noted the most energetic
applause has been reserved for the First Lady. Personally, observing her
hard work and dedication to the people we all represent, I can
understand that reaction. I need only now thank my First Lady for 39
years and Mississippi’s First Lady, Deborah Bryant.
I appreciate
all the statewide and district elected officials here tonight. I am
grateful to have the members of the Mississippi Supreme Court and
Mississippi Court of Appeals here with us. I have had the rare privilege
of appointing such fine jurists as Judge Dawn Beam and Judge James
Maxwell to the Supreme Court. I have appointed esteemed Harvard Law
graduate Jack Wilson and former U.S. Attorney Jim Greenlee to the Court
of Appeals. Tonight, we are all honored by the Courts’ presence.
Let
me say congratulations to all of the members here tonight, particularly
those who will be selected as committee chairmen. I can assure you the
leadership weighs every appointment with extreme deliberation and
attention. I am certain you will do no less in the consideration of your
important duties as committee chairmen.
Twenty-five years ago, I
took the oath of office as a member of the House of Representatives. It
has been a wonderful journey. But all along the way, I have remembered
the pride and excitement I felt upon becoming a representative in this
body and a humbled public servant. My goal then, as it is today, was to
do the most good. I believe we’ve all had help accomplishing our goals
in our personal and professional life. I am confident God continues to
rule over the affairs of man, and I believe he has blessed Mississippi’s
leadership and its people.
We now face a new year where I am able
to inform the people and the duly elected members of the House and
Senate, the state of the state in Mississippi is sound, disrupted only
occasionally by challenges of our own making. Allow me to expand on this
statement.
Fiscal year 2016 revenue projections were somewhat
optimistic. At the end of last year’s session the revenue estimating
committee projected a growth of 2.2 percent or about $124 million
increase over FY 2015. As was prudent, the Joint Legislative Budget
Committee re-adjusted the revenue after collections failed to meet
projections.
In November, the 2016 revenue estimate was reduced
by $65 million, necessitating future budget cuts. In order to balance
the state budget, I instructed DFA to transfer $35 million from the
Rainy Day Fund to the General Fund and instituted cuts to many agencies
of 1.5 percent. A number of critical agencies and some that already have
deficits were excluded from the cuts. This included public safety and
veterans affairs. The Mississippi Adequate Education Program and student
financial aid were also exempted.
Fortunately, our savings
account, or Rainy Day Fund, is available for such projected shortfalls.
If revenue continues to be under projections, I will transfer additional
funds and make similar cuts to state agencies. This is the governor’s
statutory responsibility, and I will not hesitate to carry out this
duty.
If I could add here a reminder that the Executive Budget Recommendation for FY 2016 was $68 million less in spending than was appropriated.
The EBR, as we call it in the governor’s office, is that document we
may start labeling, “Please read before discarding.” For your
convenience a copy of the Executive Budget Recommendation for FY 2017
has been placed on your desks.
As you will see our projections
keep most agency budgets level-funded for FY 2017. It is an easy guide
for balancing the state budget without spending one-time money for
recurring expenses, and it restores the balance of the Rainy Day Fund to
its statutory limit. It is full of tough decisions and sound business
practices, and it will not make everyone happy. However, it may help
prevent cuts in agencies next year by being fiscally conservative this
year. I feel certain that is your desire as well.
Interestingly
enough, the slowing revenue growth is curious to most of us, including
our state economist. The shortfall seems to be the result of a reduction
in sales and use tax collections. As expected, oil and gas severance
tax was under the prior year. However, individual income tax has
increased by $17.6 million over last year, reflecting the growth in
jobs. It appears taxpayers simply remain hesitant to spend on
consumer goods in this fragile economy. Some portion of the decline in
sales tax can also be attributed to online purchases where the state
receives little income. This decline in sales is clearly understandable
with the stock market dropping and the petroleum industry in a freefall.
Mississippi
is part of a global economy and not protected from its instability.
There are simply some conditions well beyond our control here in the
Capitol. So, let us concentrate on the improvements we can and should
make here in Mississippi, beginning with some good news.
As you
know, this year $150 million will be received from the Restore Act
settlement for appropriations by the Legislature. I have previously
announced some $54 million in economic restoration projects on the Gulf
Coast and over $200 million on environmental restoration and
conservation projects. Beginning in 2019, $40 million a year will be
forwarded to the Legislature from the settlement until 2033.
This
revenue will add $600 million to Mississippi’s coffers during those
fifteen years. I will obviously defer the decision regarding the
appropriation of these funds to the Legislature. However, I do feel
strongly about the restoration of the Gulf Coast. After all, it was the
Gulf Coast that felt the impact of the largest environmental disaster in
this nation’s history only five years after suffering our nation’s
worst natural disaster.
My work to bring these funds totaling over
$2 billion to the state is all but completed. I can assure you, this
effort could not have been possible without the help of our
congressional delegation, particularly Cong. Steven Palazzo, and your
state leadership, including Attorney General Jim Hood.
It is also
the hard work of the Mississippi Department of Environmental Quality and
Executive Director Gary Rikard, who helped shepherd this complex system
to a beneficial conclusion. They should be commended for a job well
done.
Unlike many of our neighboring states, who have had
financial and budget challenges, we do not have a large deficit but
rather a savings of nearly $400 million. As stated earlier, our income
could be better, and reductions in some budgets were necessary to meet
the revised income for FY 2016, but these are expected budget
adjustments when the economy slows and revenues decline.
It is
also a result of a 30 percent cumulative growth in budget expenditures
in the past five years. Our General Fund budget grew from $4.4 billion
in FY 2011 to $5.7 billion in FY 2016, a five-year increase of more than
$1 billion.
These increases have included $400 million more
spending on K-12 education and overall increases in education to include
a $100 million teacher pay raise.
In the last four years, nearly
every agency has seen more revenues and more spending on government
services. In fact, the State Personnel Board estimates that over 11,000
state employees have received raises in the past four years. This does
not include K-12, community colleges or our universities. Perhaps, after
reviewing state spending since 2011, it is time to slow down the growth
of government and give some relief to hardworking taxpayers.
I am
certain we will have a robust debate this session regarding tax
reductions. As for me, I believe we must work toward a plan where the
hardworking blue collar families of Mississippi get a tax dividend. It
may not be this year, but when we are having surpluses and a full
savings account, let’s pledge to give the people back a portion of their
hardearned tax dollars.
More Mississippians are working than any
time since November of 2008. Over 40,000 more people have jobs and more
than ever have begun to search for work. When companies begin to hire
and plants open, as they have in Mississippi, people come off the
sideline to try and find a career. This adds to the demand for more
jobs. Tonight, according to the Mississippi Works App, there are over
40,000 career openings available across this state, while over 12,000
individuals are receiving unemployment benefits, according to the
Mississippi Department of Employment Security.
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