Governor Wants Federal School Money Saved for Next Year (MS)

September 2, 2010

Cash-strapped Mississippi school districts, expecting to get financial aid through federal legislation passed in August, may not see any of that money this year if Gov. Haley Barbour has his way.

Questions abound over how and when school districts and other state entities, all dealing with budget shortfalls, can use about $225 million approved by Congress and signed into law by President Barack Obama.

If some school districts do not get a portion of the federal money this year, they will have to raise local taxes.

The federal legislation provides two pots of money to help Mississippi school districts and other state agencies.

School districts are poised to get $98 million in what are known as jobs funds. Barbour recently asked the local school districts to save that money for the fiscal year beginning July 1.

The upcoming fiscal year is expected to be at least as difficult as the past three, especially as other sources of federal stimulus money will no longer be available.

During the 2010 legislative session, the state was not expecting to receive the $98 million, which federal officials have said is designed to rehire teachers and other school employees who have lost their jobs during the current budget woes.

But officials were expecting other financial aid from the federal government. That financial aid was available by providing the states a lower matching rate to pull down federal Medicaid funds.

Lowering the Medicaid match would free up state money to be spent in other areas, such as on education.

Mississippi officials estimated they would get about $185 million through the enhanced Medicaid-rate program. The Legislature and Barbour passed legislation to spend $110 million of that, saving the rest for the upcoming budget year.

Under the agreement, $82 million would go to the local schools, $15.3 million to the state universities and $2 million to mental health. Public health, public safety and other entities would receive a smaller portion.

But Congress did not pass the legislation in the manner the state Legislature expected. The state will get only $127 million more from the enhanced Medicaid matching rate instead of the anticipated $185 million.

Late Tuesday, the governor sent out a news release saying he and legislative leaders have agreed that money would be saved for the fiscal 2012 budget, which starts in July.

That means, based on past statements, Barbour’s plan is for school districts not to spend any of the $98 million during the current school year.

But House Education Chair Cecil Brown, D-Jackson, said he agreed to save the enhanced Medicaid money with the understanding the districts would be able to spend money from the $98 million in jobs funds.

That money goes directly to the school districts. Barbour can ask the districts not to spend the money, but he cannot stop them, Brown said.

But Sen. Hob B ryan, D-Amory, said there is no money in the jobs funds for other agencies facing tight budgets, such as higher education and mental health.

“The governor and a handful of legislative leaders have broken faith with legislators who passed a bill saying this money would be appropriated this year if it was available,” Bryan said. “You have people being held in jail right now with mental illness. And you want to put money in the bank.”