Will Mississippi Lawmakers Follow Alabama’s BP Settlement Template?

Across the state line to the east, Alabama lawmakers meeting in a special session approved a compromise plan to spend the lion’s share of that state’s $1 billion BP oil spill settlement on Medicaid, retiring state debt, and highway infrastructure in two Gulf Coast counties – and Alabama Gov. Robert Bentley has said he’ll sign that legislation.

Could that be a template of sorts as to how Mississippi lawmakers choose to spend our state’s BP settlement funds? Mississippi will receive almost $2.2 billion in total compensation for the 2010 BP explosion, fire, and resulting oil spill on the Deepwater Horizon oil rig in the Gulf of Mexico. The rig was leased to BP by Transocean.

The Deepwater Horizon explosion killed 11 men (with Mississippians among the dead), injured others and resulted in an estimated 210 million barrels of oil being spilled into the Gulf of Mexico. It was the nation’s largest offshore oil spill. Mississippi and other Gulf states suffered significant economic and environmental damages.

Mississippi got a $2.2 billion settlement from BP, but not all of that is subject to the unfettered will of the Mississippi Legislature. Specifics of the settlement include, over time, $750 million in economic damages that will be subject to state legislative appropriations.

There are other funds with regulatory strings attached that aren’t completely subject to legislative fiat, including some $183 million in Natural Resource Damage Assessment payments for environmental restoration, $582 million in Clean Water Act penalties to be used for research and economic development and for environmental projects.

This year, the Legislature used $42 million of the initial $150 million payment of the BP settlement to the state to bolster a stagnant state budget.

Gov. Phil Bryant, Lt. Gov. Tate Reeves, and Attorney General Jim Hood – along with Gulf Coast lawmakers – have all spoken to their belief that since the BP oil spill disaster most directly impacted the Gulf Coast, that’s where the preponderance of the settlement funds should be spent.

Bryant’s Go Coast 2020 commission issued a report that made specific recommendations on focusing the BP settlement funds on Gulf region projects that bolstered the local economy and created jobs. Reeves launched his own series of fact-finding meetings with the same general focus.

But upstate, lawmakers are not yet ready to concede to a plan that substantially excludes central and northern counties from benefitting from a portion of the BP settlement.

That’s problematic for the lower six Gulf Coast counties, who don’t possess the numbers in either the Senate or the House to impose their will on the rest of their legislative colleagues. So most legislative observers expect a bruising sectional fight over the BP settlement funds that rivals the fight over the state’s Hurricane Katrina relief funds back in 2006.

Former Gov. Haley Barbour and the state’s congressional delegation – led by U.S. Sen. Thad Cochran – worked with Congress and the Bush Administration to direct millions in hurricane relief to
Mississippi. While the Coast was obviously the hardest hit area of the state, damage was evident as far north as Monroe County in northeast Mississippi.

Hurricane Katrina’s 2005 fury came at a time when Mississippi was really struggling with budget problems, principally how to pay for the state’s Medicaid program. Voters will recall that legislators fell over themselves to use substantial portions of the federal funds provided for relief from Hurricane Katrina to meet the state’s Medicaid expenses.

It’s also not only possible but very likely that the Legislature could use the state’s BP money to offset spending they would otherwise make on the Gulf Coast – the so-called “fungibility” principle – and still share the wealth with central and northern counties.

Regardless, the looming sectional battle over the state’s BP settlement will be a prime mover in the 2017 regular session of the Legislature – or in possible special sessions that may arise earlier.

Sid Salter is a syndicated columnist. Contact him sidsalter@sidsalter.com.

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