Proposed raid on rainy day fund' short-sighted

By Staff
Jan. 7, 2001
According to both Gov. Ronnie Musgrove and a significant number of state lawmakers, the weather forecast for 2001 has already been made it's raining.
Both Musgrove and several lawmakers have proposed raiding the state's "rainy day fund" to make up for an anemic state revenue stream. Musgrove wants to take $50 million from the fund to shore up state agency spending against more mid-year budget cuts. Pre-filed bills in the Legislature seek to use "rainy day" funds to offset the $14.4 million dollar current year deficit in the Minimum Foundation Program for public education.
The "rainy day fund" was established in 1991 as a means to avoid "crisis budgeting" and as a direct result of Minimum Foundation shortfalls that existed a decade ago. The fund, officially called the Working Cash Stabilization Fund, carries a current balance of about $265 million.
In addition to the $14.4 million needed for the current year Minimum Foundation deficit, there's the MFP funds for the next fiscal year that the present Legislative Budget Committee recommendations don't address. Oh, yes, and there's the $23 million needed to fund the first year of the 2000 teacher pay raise plan.
Keep your eye on the ball
While the Legislature's disposition of the teacher pay plan i.e., will they pay up or renege on the promise to the state's teachers? is the item that will draw headlines, taxpayers should focus their attention on the Legislature's disposition of the current Minimum Foundation Program deficit and the stability of future funding of the MFP.
The Minimum Foundation Program is a long-term commitment that state government made to local school districts across the state. In 1954, the MFP was established to share the burden of the cost of public education by the state, counties and school districts. School districts and county and municipal governments have depended on MFP funds for almost a half-century as a significant source of funding.
School districts across the state are reeling during the current school year from the state's failure to meet Minimum Foundation Program commitments during the current fiscal year and shaking in their budgetary boots over the prospects of the Legislature failing to meet that commitment for the coming fiscal year.
During the current fiscal year, local school districts reacted to the loss of MFP funds by downsizing programs, allowing attrition to reduce non-essential personnel and general belt-tightening. But another year of MFP funding losses are likely to result in the necessity of local tax hikes in a number of school districts across the state.
Sticky politics
The politics of the situation is tricky pitting the desire of rank-and-file teachers to see the state make good on the promise of the 2000 pay hike package against the legitimate concerns of school superintendents and school boards to see the total $30 million promised by the Minimum Foundation Program and the Adequate Education Program fully funded.
And it appears that some segments of the Mississippi Legislature may well have taken cues from Congress in the early 1980s. During that time, the state endured the loss of Revenue Sharing Funds from the federal government, pushing the burden of taxation down the pipeline from Congress to state legislatures. The tactic allowed congressmen to tell their constituents that they "held the line" on new taxes while forcing state lawmakers to either raise taxes or cut services.
Trickle down' economics
Make no mistake that when the Mississippi Legislature fails to fund the Minimum Foundation Program and the Adequate Education Program, the same thing is happening. Even if lawmakers make good on the first-year of the promised teacher pay increase during the 2001 session, a failure to fund MFP and AEP commitments is the same kind of "trickle-down" economics that took place about 20 years ago in Congress that saw the local level taxpayers get "trickled" upon.
If the Legislature wades into that swamp, they leave themselves open to the clear judgment of the taxpayers that lawmakers made the politically expedient decision to fund the teacher pay increase while ignoring the fiscally responsible commitments that already exist to fund the Minimum Foundation and Adequate Education programs.
Without maintaining the baseline funding of Minimum Foundation Program and Adequate Education Program, the teacher pay raise will simply mean that we'll have better-compensated teachers working in cash-strapped school districts.
Cast your mind back
Taxpayers were told a half-century ago that taxes collected to fund the Minimum Foundation Program would do just that fund the Minimum Foundation Program. In recent years, taxpayers were told that the AEP would substantially meet bricks-and-mortar requirements for local school districts.
But now that the taxes have been levied as has been the case historically in this state on sales tax hikes, "sin" taxes and other gambits it appears that these programs can't be counted on by school districts as being either "adequate" or any type of reliable "foundation", minimum or otherwise.
Operating funds under existing programs for existing school districts should be equal in priority to funding the 2000 teacher pay increase. While teachers indeed deserve the pay raise they've been promised, taxpayers and their children deserve the school district operating funds that they've been promised as well.
Beware buck-passing
Attempts to pass the buck of funding school district operating funds from state government to the local taxing authorities should be seen for what they are blue smoke and mirrors designed to give lawmakers the political embrace of the teacher unions as "pro-education" while failing to maintain the educational system operating funds that were promised to the state's school children 47 years ago.
When your state legislator ignores MFP funding and then takes credit for holding the line on higher taxes, it's clear that what he's really done is virtually guarantee a property tax hike at the local level.
Like the old Fram oil filter slogan, you "can pay me now or pay me later" and when a politician tells you it's raining, check your leg first.
Sid Salter is publisher/editor of The Scott County Times in Forest. He can be reached at PO Box 89, Forest, MS 39074, by fax at 469-2004 or by e-mail at salternews@aol.com.