Thank you, Mr. Lt. Governor. As always, I appreciate your presiding over this, our fifth State of the State together. I am confident this term of office will be as productive as our first one.
This state would not have enjoyed the success I have been able to report these past four years without the leadership of you and Speaker Gunn. No governor has had the benefit of any better partners along the path to Mississippi’s future. I earnestly and sincerely thank you both and your honorable membership.
Each year I have noted the most energetic applause has been reserved for the First Lady. Personally, observing her hard work and dedication to the people we all represent, I can understand that reaction. I need only now thank my First Lady for 39 years and Mississippi’s First Lady, Deborah Bryant.
I appreciate all the statewide and district elected officials here tonight.
I am grateful to have the members of the Mississippi Supreme Court and Mississippi Court of Appeals here with us. I have had the rare privilege of appointing such fine jurists as Judge Dawn Beam and Judge James Maxwell to the Supreme Court. I have appointed esteemed Harvard Law graduate Jack Wilson and former U.S. Attorney Jim Greenlee to the Court of Appeals. Tonight, we are all honored by the Courts’ presence.
Let me say congratulations to all of the members here tonight, particularly those who will be selected as committee chairmen. I can assure you the leadership weighs every appointment with extreme deliberation and attention. I am certain you will do no less in the consideration of your important duties as committee chairmen.
Twenty-five years ago, I took the oath of office as a member of the House of Representatives. It has been a wonderful journey. But all along the way, I have remembered the pride and excitement I felt upon becoming a representative in this body and a humbled public servant. My goal then, as it is today, was to do the most good. I believe we’ve all had help accomplishing our goals in our personal and professional life. I am confident God continues to rule over the affairs of man, and I believe he has blessed Mississippi’s leadership and its people.
We now face a new year where I am able to inform the people and the duly elected members of the House and Senate, the state of the state in Mississippi is sound, disrupted only occasionally by challenges of our own making. Allow me to expand on this statement.
Fiscal year 2016 revenue projections were somewhat optimistic. At the end of last year’s session the revenue estimating committee projected a growth of 2.2 percent or about $124 million increase over FY 2015.
As was prudent, the Joint Legislative Budget Committee re-adjusted the revenue after collections failed to meet projections.
In November, the 2016 revenue estimate was reduced by $65 million, necessitating future budget cuts. In order to balance the state budget, I instructed DFA to transfer $35 million from the Rainy Day Fund to the General Fund and instituted cuts to many agencies of 1.5 percent. A number of critical agencies and some that already have deficits were excluded from the cuts. This included public safety and veterans affairs. The Mississippi Adequate Education Program and student financial aid were also exempted.
Fortunately, our savings account, or Rainy Day Fund, is available for such projected shortfalls. If revenue continues to be under projections, I will transfer additional funds and make similar cuts to state agencies. This is the governor’s statutory responsibility, and I will not hesitate to carry out this duty.
If I could add here a reminder that the Executive Budget Recommendation for FY 2016 was $68 million less in spending than was appropriated. The EBR, as we call it in the governor’s office, is that document we may start labeling, “Please read before discarding.” For your convenience a copy of the Executive Budget Recommendation for FY 2017 has been placed on your desks.
As you will see our projections keep most agency budgets level-funded for FY 2017. It is an easy guide for balancing the state budget without spending one-time money for recurring expenses, and it restores the balance of the Rainy Day Fund to its statutory limit. It is full of tough decisions and sound business practices, and it will not make everyone happy. However, it may help prevent cuts in agencies next year by being fiscally conservative this year. I feel certain that is your desire as well.
Interestingly enough, the slowing revenue growth is curious to most of us, including our state economist. The shortfall seems to be the result of a reduction in sales and use tax collections. As expected, oil and gas severance tax was under the prior year. However, individual income tax has increased by $17.6 million over last year, reflecting the growth in jobs.
It appears taxpayers simply remain hesitant to spend on consumer goods in this fragile economy. Some portion of the decline in sales tax can also be attributed to online purchases where the state receives little income. This decline in sales is clearly understandable with the stock market dropping and the petroleum industry in a freefall.
Mississippi is part of a global economy and not protected from its instability. There are simply some conditions well beyond our control here in the Capitol. So, let us concentrate on the improvements we can and should make here in Mississippi, beginning with some good news.
As you know, this year $150 million will be received from the Restore Act settlement for appropriations by the Legislature. I have previously announced some $54 million in economic restoration projects on the Gulf Coast and over $200 million on environmental restoration and conservation projects. Beginning in 2019, $40 million a year will be forwarded to the Legislature from the settlement until 2033.
This revenue will add $600 million to Mississippi’s coffers during those fifteen years. I will obviously defer the decision regarding the appropriation of these funds to the Legislature. However, I do feel strongly about the restoration of the Gulf Coast. After all, it was the Gulf Coast that felt the impact of the largest environmental disaster in this nation’s history only five years after suffering our nation’s worst natural disaster.
My work to bring these funds totaling over $2 billion to the state is all but completed. I can assure you, this effort could not have been possible without the help of our congressional delegation, particularly Cong. Steven Palazzo, and your state leadership, including Attorney General Jim Hood.
It is also the hard work of the Mississippi Department of Environmental Quality and Executive Director Gary Rikard, who helped shepherd this complex system to a beneficial conclusion. They should be commended for a job well done.
Unlike many of our neighboring states, who have had financial and budget challenges, we do not have a large deficit but rather a savings of nearly $400 million. As stated earlier, our income could be better, and reductions in some budgets were necessary to meet the revised income for FY 2016, but these are expected budget adjustments when the economy slows and revenues decline.
It is also a result of a 30 percent cumulative growth in budget expenditures in the past five years. Our General Fund budget grew from $4.4 billion in FY 2011 to $5.7 billion in FY 2016, a five-year increase of more than $1 billion.
These increases have included $400 million more spending on K-12 education and overall increases in education to include a $100 million teacher pay raise.
In the last four years, nearly every agency has seen more revenues and more spending on government services. In fact, the State Personnel Board estimates that over 11,000 state employees have received raises in the past four years. This does not include K-12, community colleges or our universities. Perhaps, after reviewing state spending since 2011, it is time to slow down the growth of government and give some relief to hardworking taxpayers.
I am certain we will have a robust debate this session regarding tax reductions. As for me, I believe we must work toward a plan where the hardworking blue collar families of Mississippi get a tax dividend. It may not be this year, but when we are having surpluses and a full savings account, let’s pledge to give the people back a portion of their hard-earned tax dollars.
More Mississippians are working than any time since November of 2008. Over 40,000 more people have jobs and more than ever have begun to search for work. When companies begin to hire and plants open, as they have in Mississippi, people come off the sideline to try and find a career. This adds to the demand for more jobs. Tonight, according to the Mississippi Works App, there are over 40,000 career openings available across this state, while over 12,000 individuals are receiving unemployment benefits, according to the Mississippi Department of Employment Security.
It is this skills gap we must fill to reach our goal of full employment. Last year I asked you to invest $50 million into workforce training, utilizing our community colleges assisted by our State Workforce Development Board. These funds would go to modernize equipment at community colleges and place students into workforce training for the middle skills that are so desperately needed.
These additional workers will generate more tax revenue, helping fund state needs or providing the Blue Collar Dividend I spoke of earlier.
There is not a conflict with this administration in demanding accountability for these workforce funds. I am proud to say, we were the first state to submit a Workforce Innovation and Opportunity Act action plan to the U. S. Department of Labor. The plan is available online for your review on the Mississippi Works website.
Oversight of this program rests at the Mississippi Department of Employment Security. We have reconstructed the State Workforce Development Board and have submitted this reorganization plan to the State Auditor and Legislative Leadership for review.
It is now time to make the investment in Mississippi’s workforce before it is too late. We have $50 million sitting idle in the Unemployment Trust Fund. Let’s invest it now in workforce training, and I will show you Mississippi’s greatest potential. We can lead the nation in economic development if you will give us the tools to reach these goals.
Rush with me through the entrance to the future or stand behind as it closes on the careers of Mississippi’s next generation. The choice is yours. All you who will move boldly into this new opportunity, join with me tonight and move together forward.
Mississippi’s investments to incentivize industry have paid dividends to the state. Our return on investment report indicates an 11 to 1 return for every dollar spent for this purpose. I have given you my assurance in the past and will pledge once more to be ever-vigilant with these hard-earned tax dollars. More than a decade as state auditor gave me an abundant sense of caution. I will refuse any economic development project that will put your trust or the taxpayers’ investment at risk.
Time does not permit me to list all the accomplishments of our economic development efforts in the past year. For your benefit, I will summarize by providing the important outcomes. It includes the addition of over 5,000 jobs and $787 million in private investment in 2015.
In four years, MDA projects have brought the state over 21,000 jobs and $3 billion in private sector investment. We now do business on a global scale. In fact, according to the U.S. Chamber Foundation, we are the No. 3 state in America for export growth and the second best state for overall cost of doing business.
As always, I have promised to keep these remarks brief. No matter how long it takes. So let me move urgently to this administration’s aggressive agenda.
First, I need your help in providing security and protection for the nearly 5,000 foster children now under our care. As we all know, the Olivia Y lawsuit has tarnished the image of our state’s treatment of foster children and foster parents, many of whom serve from a sense of caring and Christian compassion.
As is required by the laws of this state and nation, we must accept our responsibility to adequately care for these children. I will ask your help to support Family and Children’s Services, currently housed in the Department of Human Services, to be fashioned as a separate agency that reports directly to the governor. To reduce the cost, we can utilize that portion of the funding currently being spent at the Department of Human Services for this division, plus an additional amount that must be decided by this Legislature.
I am concerned if we cannot make some aggressive commitments to foster care in the state, then the courts will do so for us. Many of us recently opposed a constitutional amendment that would have given the courts appropriation authority. I believe we should be just as determined not to accept the same principle in this instance. I ask you to make a decision that will protect our foster children and allow you to retain the appropriation authority in the Legislature where it belongs.
Fortunately, I am not alone in this desire to improve our foster care system. I have a powerful ally in a man of honor and distinction. He is a noted educator and jurist who traded the prestige and acclaim of the Mississippi Supreme Court to serve a calling to help our children. Please help me thank Justice David Chandler, the new Director of Family and Children Services.
I saved the best report for last. Please allow me to thank you for taking the courageous steps during the past four years in beginning the transformation of our public education system. Our efforts are beginning to make a difference. Last year, our fourth graders led the nation’s improvement in reading and math. Over 90 percent of our third graders passed their reading tests last year, and 95 percent of at-risk students in Jobs for Mississippi Graduates stayed in school, with 82 percent going onto a career, college or the United States military.
Two charter schools were opened in Jackson. Special needs children received scholarships to get the help they deserve, and Mississippi ranked fourth in the nation for the percentage of teachers who are board certified. Mississippi inched up the ladder of national ratings. We are not prepared to celebrate our state’s overall rating, but we are moving forward and intend to continue to do so.
I will ask you for more innovation by first changing how we go about selecting our local superintendents of education. Of the entire nation, Mississippi has one-third of all that are elected to that important position. There is a reason most of the nation has elected school boards and appointed superintendents . . . because it works.
I am not critical of all elected superintendents. Many do a superb job, but the very nature of a political office limits the pool of applicants for this important job to one district and only a few candidates. It would be similar to selecting the chancellor of Ole Miss only from applicants in Oxford or the president of Mississippi Valley State University from only those living in Itta Bena.
I realize we should not remove any elected superintendent from office, but we can work through those issues and find a better path forward. We should elect our school boards and allow them to appoint the district superintendents.
In my inaugural address, I asked you to imagine a Mississippi where schools competed for students. Where classrooms were designed for students’ success. Where parents and students could choose the school they desired to attend.
Just imagine that parents could take their hard-earned tax dollars and send their child to a school of their choice. Imagine the freedom of a parent in a failing school to send an at-risk child to a superior school nearby but outside the district. Why should only the affluent enjoy the benefits of these fine schools? Your zip code or income level should not determine your opportunity to get a good education. Let us make this bold decision and give these children hope.
We should also remove the barriers to charter schools and extend their range across district lines so children can pass through these imaginary walls to a better, brighter future. I ask you tonight to let them have this freedom and tear down these walls.
We can make progress in higher education by working with the IHL and community college boards to craft an associate’s degree credential for those students who complete the necessary number of scholastic hours at a four-year university.
For example, if a student attended a university for two years and completed the required course work, but had to leave the university for a legitimate reason, they could receive an associate’s degree related to their subject major. In several other states, this has been successful, and it can be here as well.
Of course, we would need to request the proper approval from the Southern Association of Colleges and Schools before moving forward, but I believe we should allow these students who leave college because of the unforeseen demands of life to receive some credentials that will help them begin their career.
Long ago, I declared this state must add 1,000 new physicians by 2025. With the College of Osteopathic Medicine at William Carey University and the new medical school being constructed at the University of Mississippi Medical Center, we are well on our way to our goal.
This session you have before you a physician’s compact bill that will allow Mississippi to join other states and accept a medical license from any of the compact states. A physician from Alabama could move to Mississippi and his license to practice medicine would be accepted by the Mississippi Board of Medical Licensure. This reciprocity may result in physicians relocating to Mississippi from a number of states.
This new and innovative movement is being led by Dr. Clay Hays, chairman of the Mississippi State Medical Association and the Mississippi Healthcare Solutions Institute. It has received the support of the Mississippi Board of Medical Licensure, led by our very own Dr. Virginia Crawford. Please join me tonight in thanking both of these noted physicians for their contribution to our state’s medical profession.
A great deal of effort has gone into a transportation plan developed by the Mississippi Economic Council, our state chamber of commerce. The independent analysis of our highways and bridges was not left to a government agency, but to a group of our business leaders. The man steering this noble effort is not in the asphalt or cement or the construction business. He is one of our state’s most respected industrialists, and his company is a national leader in the poultry business.
He is also a philanthropist and sponsor of the Sanderson Farms Championship, our PGA Tour golf tournament. He is with us tonight and we should all thank my friend, Joe Sanderson.
So now we have a decision to make. How do we generate sufficient revenue to maintain and keep safe the roads and bridges that are our economic life line and not place an undue burden upon the working people of this state? Both Joe and I have offered a recommendation.
There is no reason we cannot balance an increase in fuel tax with an equal and sufficient tax reduction. This tax cut does not need to apply to large corporations. They are and have been receiving the reduction in fuel cost for some time now.
It is the working families of Mississippi I am concerned about. I have full confidence in your ability to find this common ground. I will be working with your leadership to help do so before this session ends.
I’d be remiss if I didn’t mention the 11 people in North Mississippi who lost their lives in the tornadoes of Dec. 23. Our prayers are with all those affected by those terrible storms that struck just two days before Christmas. I have directed the Mississippi Emergency Management Agency to help those still in need.
I’m grateful to the Federal Emergency Management Agency for its quick action in declaring the affected counties a federal disaster area. I’m also sincerely thankful to the churches and volunteer organizations that have provided aid and comfort and are doing so as we speak.
In closing, I encourage us all to reflect upon the words of King Solomon and his prayer. The wisest king of antiquity wrote: “I am but a little child. I do not know how to come out or go in. Give your servant, therefore, an understanding mind to govern your people that I may discern between good and evil.”
May we all have such a prayer in our hearts as we move forward together. Thank you and God bless all.
1/26/16
Magnolia Tribune
