- Welcome to the complex multiverse of government finance, writes columnist Bill Crawford.
Over the next three months, legislators will focus on a $7 billion General Fund budget to run state government for FY 2026. Interestingly, that’s only about 25% of the total $28 billion budget they will ultimately be called upon to approve.
Welcome to the complex multiverse of government finance.
The math begins with the estimated $11 billion the Mississippi Department of Revenue should distribute for FY 2026. The department will divert about $3.4 billion of that to more than 100 special funds. That leaves $7 billion for the General Fund budget plus the rainy day set aside and reserves held to spend later during the session.
About $675 million from the special fund diversions will come back to support the General Fund budget in lines entitled State Support Special Funds.
That leaves over $20 billion to account for in the $28 billion overall budget. Most of that will come from recurring federal funds but billions will also come from a variety of fees, assessments, interest, and billings that do not pass through the Department of Revenue. This $20 billion is lumped into budget lines entitled Other Special Funds.
For example, the legislature will provide over $656 million in public university support from General Funds. But the universities’ total operating budget will exceed $3.5 billion. Almost $90 million will come from State Support Special Funds, like the Education Enhancement Fund, but the huge remaining balance will come from federal funds, tuition and fees, and other university generated funds – about 80% of the overall budget.
The largest General Fund allocation and third largest Other Special Funds allocation will go to fund public schools – $2.9 billion in General Funds out of the $7 billion, another $1.9 billion from Other Special Funds, and under $400,000 from State Support Special Funds.
The largest component of the overall $28 billion budget, about 29%, will come from Medicaid expenditures estimated at $8.1 billion. General Funds of $846 million and State Support Special Funds of $63 million provide about 11% of that total. The balance will mainly come from federal funds and the provider bed tax.
Interestingly, one of the largest budget components gets nothing from the General Fund. The Department of Transportation budget of $2.3 billion comes totally from Other Special Funds (the fuel tax, federal funds, the lottery, etc).
Then there is another universe of funds.
The budget committee held over $2 billion out of its budget recommendation. The Capital Expense (slush) Fund holds $1.1 billion, the rainy day fund has $667 million, and $450 million was held in reserve to budget later (think tax cut). Plus one-time federal and non-recurring state funds were not budgeted.
So the real budget total is unknown.
“A foolish man devours all he has” – Proverbs 21:20.
Bill Crawford
