Mississippi Has Been Living Jackpot To Jackpot

Gov. Phil Bryant believes the time has come to add a lottery, creating yet another revenue stream for Mississippi. That will create suspense for the next few weeks.

There is no suspense about the state being on the financial ropes. For the past two years, sensible and austere revenue forecasts have not been met. One cut has followed another.

It’s also interesting that Mississippi has been living like a gambler, sustained by one jackpot after another for nearly 30 years. Absent a stable and rising core of revenue from more and better jobs, higher property values and increasing economic activity, Mississippi has time and again just gotten lucky finding cash to pay its bills.

Back in 1990, with no study, no inducements, no public conversation, and without the knowledge of most legislators who voted for it, Mississippi became a full-fledged casino state.

Since the first spin of a slot machine wheel, gamblers have provided as much as $344 million per year in direct taxes. Gobs more cash has been provided through payroll taxes, sales taxes, hotel taxes, property taxes. Casino-based revenue has slipped from its peak, but strictly in terms of public revenue, casinos, well, have anted up plenty.

With the new revenue, legislators cut vehicle taxes, raised teacher pay and started providing group health plans for educators. It was a fortuitous time.

During the next several years, lesser jackpots have hit when Mississippi was in tight times. This state’s share of the national settlement with Big Tobacco keeps rolling in, for example. There were just-in-time settlements of lawsuits filed in the state’s name. In 2005 when Mississippi was required to cover a $55 million loan default related to a state-backed beef processing plant, it came in handy that a $100 million check showed up from an income tax settlement with MCI-Worldcom.

Let’s be clear: There was nothing lucky about Hurricane Katrina, which also occurred in 2005. The greatest natural disaster in American history, Katrina killed 238 people and wiped clean thousands of acres in the southern half of the state.

But Katrina did result in a wide-ranging $5.5 billion federal aid package, hundreds of millions in insurance payments and thousands of jobs in construction and other trades. As part of the aid package, Mississippi’s share of all Medicaid payments was waived for a few years, saving state taxpayers as much as $1 billion in outlays guaranteed by the state treasury.

And now, to the most recent super-disaster, this one man-made. The deadly 2010 explosion and subsequent oil leak from the Deepwater Horizon drilling rig in the Gulf of Mexico had a crushing effect on the seafood industry. It was also a tourism-killer, based on images of oil-soaked beaches from Florida to Texas. Mississippi settled with British Petroleum (BP) on the figure of $750 million in damage to the state’s economy.

The first check ($150 million) came last July. In anticipation of its arrival, lawmakers assigned $41 million to several coastal projects. The balance remains unpledged and unspent.

In the Legislature last week, there was a tempest of sorts when a House committee killed a Senate-passed two-page bill to create a special account to receive future payments of $40 million per year from 2019 to 2033.

House members from the Gulf Coast said it didn’t provide sufficient assurances that the money would be spent where they believe fairness demands. From their perspective, every penny should be allocated to the counties where there was a direct impact from the spill.

We’ve got to face it: Mississippi truly stinks at setting aside money as special-purpose investments. The first foray back in the early 1980s was creation of an Educational Trust Fund that was to generate cash for K-12 schools. No sooner than the ink dried, the raid commenced.

The Big Tobacco billions were to be invested to generate Medicaid matching money. That lasted a few months. Today, installments are spent before they arrive.

About the time casinos were legalized, the Legislature also agreed to a 2 percent budget cushion, calling it the state’s Rainy Day Fund. It has some cash now, but has been depleted or not funded (ignored) at times, too.

No doubt many in the Legislature see the BP payments as the next jackpot, the next cache of “free money” to shore up lagging general revenue.

The upstate lawmakers vastly outnumber the downstate lawmakers, so more conversation is likely. But given the state’s history, this jackpot, like those before, will find its way into the General Fund.


Charlie Mitchell mugshot 2014Charlie Mitchell is a Mississippi journalist. Write to him at cmitchell43@yahoo.com.

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