Mitchell: Special Funds Grab Breaks Faith, Has Consequences

Lt. Gov. Tate Reeves says it’s Obama’s fault, but state agency chiefs are pointing a disappointed finger at Reeves and legislators.

For what?

The Great Scrape of 2016.

“It’s going to take at least a decade to fix this,” said Mike Chaney, insurance commissioner and former member of both the House and Senate.

Here’s the background:

Through the decades, the Legislature has imposed assorted fees to accomplish certain goals.

There are dozens of these quid pro quo laws.
• A dollar or so added to the cost of a marriage license funds domestic violence prevention.
• A few dollars on traffic fines supports the law enforcement training academy.
• Ten bucks on a fire insurance policy goes to buy fire trucks for small-town and rural volunteer fire departments.

Some funds are very large, such as the 2009 tax increase on tobacco. The tax went from 18 cents to 68 cents per pack with a promised emphasis on smoking cessation. Remember?

The largest of these pledges were an Education Trust Fund that was ordained in the 1980s and a Health Care Trust Fund that was to come from the billions collected in settling the state’s lawsuit against Big Tobacco in the 1990s. The Education Trust never really came to be; the Health Care Trust did, but was raided and depleted after only a few years.

Most, however, have been smaller — clearly targeted but less ambitious. Less visible, too.

Here’s what has happened:

As the 2016 session closed, the Legislature opted to sweep all money from all these accounts to balance the General Fund.

One big pot for every penny the state receives, regardless of the premise upon which the money was collected. The Legislature tacitly repealed every provision assigning revenue to specific operations without actually repealing anything.

The law may still pledge a dollar from every marriage license to domestic violence programs, but if the new budget didn’t allocate money for the purposes defined in collecting the money, then for the 12 months starting July there may be no money for those purposes. Period.

Heads of most state agencies are, in a word, aghast.

Chaney’s office collects the fire insurance policy premium tax, and he says he plans to allocate it as the law prescribed before the last-minute “scrape.” The total collected is about $16 million. If the state doesn’t like what he plans to do, “they can put me in jail,” Chaney said.

Secretary of State Delbert Hosemann, also a Republican and normally a soft-spoken former tax attorney, is seeing red. His office collects a $250 in filing fee from each nonresident limited liability corporation. About half the total collected from the fee, $1.3 million, has been returned to local governments to help pay for elections. “When the circuit clerks don’t get that money,” Hoseman said, “that’s when people will realize what this means.”

Hosemann was as livid as he gets. There was zero hesitation to award $262 million and provide a 25-year tax exemption to a foreign tire-maker for a loose projection to add 2,000 jobs (Continental Tire), he said. “Teachers can’t live on projections,” Hosemann said. “We ought to get out of it. There’s no justification for that.”

For his part, Reeves delivered “all is well” reassurances to Mississippi Today. Asked about why the state was in such a pinch, Reeves told the online news source, “In terms of why we’re not seeing significant economy growth, I think the primary reason is the Obama economy.”

Never mind, of course, that other states are prospering, the president is a Democrat and Reeves is a Republican, so having the nation’s worst economy is Obama’s fault. (Certainly makes one wonder whether Reeves thinks Bill Clinton is a genius, because state revenue grew by double-digit percentages in the Clinton years.)

In the interview, Reeves basically called the agency heads crybabies. Hosemann said the scrape was part of a plan to consolidate more power in the Legislature.

Here’s the gist: If a Bob takes $500 from Jim and promises to deliver a cow, but delivers a goat, that’s false pretenses — and Bob goes to prison.

That’s not exactly what the 2016 edition of the Mississippi Legislature, in its haste to deliver a balanced budget, has done. But it’s close.

Agency heads feel they were separately elected to provide specific services related to the fees the Legislature created for specific purposes.

They have every right to be distraught because those services will still be expected, but perhaps not provided.

Maybe then people will notice.

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

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