Posted by
Gray Ghost on Tuesday, April 29, 2008 1:10:00 PM
The following was issued by the Governor of Mississippi office on April 29, 2008:
When Haley Barbour became Governor of Mississippi in January 2004, Mississippi was in its worst financial shape since the Great Depression. The State was in a $720 million budget hole; the State’s Rainy Day Fund reserves had dropped 90%, to less than $25 million; and there were loud calls for tax increases.
Four years later, without raising anybody’s taxes, Mississippi has a balanced budget, has rebuilt its Rainy Day Fund to the amount called for in law, and important priorities like education and law enforcement have received record funding increases. How?
Working with the Legislature, Governor Barbour controlled spending and increased revenue through economic growth, not tax increases. During the previous Administration, state spending increased 36% faster than General Fund revenue. In the five budgets under Governor Barbour, the opposite has occurred; General Fund revenue is growing 29% faster than General Fund agency spending, without raising anybody’s taxes. In the budget just adopted for FY ’09, for the second time in Governor Barbour’s tenure, appropriations will increase by less than 1% compared to this year.
When Governor Barbour took office, the State’s savings account - the "Rainy Day Fund" - had been depleted to pay for increased spending. In Governor Fordice’s last year, Mississippi had $233 million in its Rainy Day Fund. During the Musgrove administration, the state spent that down to just $22.6 million. At the end of the current fiscal year (June 30), Governor Barbour’s fourth budget, the Rainy Day Fund will contain $378 million, an amount equal to the statutory cap of 7.5% of the General Fund budget.
Although Mississippi’s bonded indebtedness exploded between 1990 and 2004 - increasing from $589 million to $3.1 billion - Governor Barbour has stopped State Government from swiping its credit card at every opportunity. In 2005, for the first time since 1987, the State paid off more debt than was issued, providing financial relief for generations to come. In the last five years, State debt has increased by only 1.6% after increasing 44% in the previous five years. This year, the Legislature approved only $8 million of net new debt available for future issuance.
A conservative governor, committed to fiscal discipline, can implement Republican principles.