Legislative leaders opt not to release typical pre-session budget plan after disagreement with governor

Legislative leaders have opted not to produce a budget recommendation to serve as a guideline for the upcoming 2024 session.

Normally, the 14-member Budget Committee, which includes outgoing House Speaker Philip Gunn and Lt. Gov. Delbert Hosemann, develops a budget recommendation before each session begins in January. But during Wednesday’s meeting, Budget Committee members adjourned without adopting a budget recommendation.

House Pro Tem Jason White, R-West, who is expected to be elected by the membership as speaker in January, said the committee opted not to develop a budget recommendation because there was not an official revenue estimate agreed to by the Budget Committee and Gov. Tate Reeves.

“We didn’t have an agreement on a number,” said White.

READ MORE: Governor, legislative leaders deadlock on how much money the state has to spend next year

An initial step in developing a budget is for the governor and Budget Committee to agree in November on the amount of revenue expected to be collected during the upcoming fiscal year to fund the budget. Reeves wanted a revenue estimate of about $118 million more than supported by the Budget Committee.

Both White and Hosemann said Wednesday they anticipate legislative appropriators will begin work in January on separate budget proposals from the House and Senate using the revenue estimate supported by the Budget Committee. Hosemann said he hopes to meet with Reeves before he releases his budget proposal — due Jan. 31 — to discuss with him using the lower number.

At the very least, Hosemann said, “I would hope that (agreeing on a revenue estimate) would be worked out before March with the governor.” March is essentially when work will begin in earnest on developing a budget to fund state services, such as education, health care and law enforcement.

Reeves has said he supports the higher budget recommendation — $7.64 billion — because it would make it easier to pass in the 2024 session his plan to phase out the state income tax, which accounts for a little less than one-third of total state general fund revenue.

Hosemann again reiterated Wednesday current collections do not support the higher estimate supported by Reeves. The lieutenant governor pointed out that for three of the first five months of the current fiscal year, revenue has met the current estimate only because of interest earnings. Without those earnings, Hosemann said, revenue collections would be below the amount projected by the 2023 Legislature to fund the budget for the current fiscal year.

Hosemann added that he, like the governor, wants to consider tax cuts during the upcoming session. He said he would like to consider reductions in the income tax and the 7% tax on groceries. But he discounted efforts to pass legislation to totally eliminate the income tax sometimes in the future, saying it made sense to work each session to try to make incremental tax cuts.

Hosemann said through such incremental cuts, “it could be eliminated in 10 years, faster than what is being proposed” by the governor and others in past legislation.

This is the first time in recent history that the Budget Committee will not develop a budget recommendation. Before the 2003 session, then-Gov. Ronnie Musgrove and the Budget Committee did not agree on an estimate, but the committee still offered a budget recommendation.

Still, the recent posturing between the governor and legislative leaders most likely not derail work to pass a state budget. At some point in March or near the end of the session, the legislative leaders most likely will meet and hash out a revenue estimate and work to pass a budget. The governor in March will have no official role in developing that estimate. At that point, the governor will have the option to veto or sign those budget bills into law.

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