The Mississippi Legislature will have $76.3 million more to spend than it did during its 2023 session.

Members of the Joint Legislative Budget Committee met Friday morning and adopted a revenue estimate for the upcoming fiscal year, which begins July 1. The estimate is $7.6 billion – up 1% from the final estimate from last year.

The estimate is a bit misleading because since the COVID-19 pandemic, as federal funds poured into Mississippi and state revenue soared, the Legislature has spent much less each year than the state collected.

For instance, despite a revenue estimate at the end of the 2023 session of $7.5 billion, the state appropriated only $6.66 billion in general funds, creating a surplus that can be used in future years primarily for one-time expenses instead of recurring expenses.

Setting the revenue estimate by the 14-member Legislative Budget Committee is a key step in developing a state budget to fund education, health care and other key services for the upcoming fiscal year.

Asked if the Legislature had the money to address all the needs during the 2024 session, Lt. Gov. Delbert Hosemann said, “We are hopeful. We have been prudent … We have issues, Medicaid, PERS, education.”

Hosemann was referring to efforts to expand Medicaid, though studies indicate there would be no cost to the state for a number of years if Medicaid was expanded to provide health care to those earning up to 138% of the federal poverty level as allowed by federal law. On the other hand, there would be a cost to the state to expand to less than 100% of the federal poverty level as Hosemann’s Senate plan proposes.

The federal government provides states more money for expanding to 138% of the federal poverty level as the House has proposed. During the final weeks of the session as legislators work to develop a budget, efforts also will be made to reconcile the House’s and Senate’s positions on Medicaid expansion.

Plus, some legislators are proposing a sizable cash infusion into the state’s massive Public Employees Retirement System, known as PERS, to help ensure its financial viability.

And both the House and Senate have proposed increasing funding for K-12 education by at least $200 million, but currently the two chambers appear at loggerheads on whether to divvy those funds under an existing funding formula or to develop a new one.

House Appropriations Chairman John Read, R-Gautier, said there is never enough money to meet all the needs.

“The money will only go so far,” he said. Read said he asks agencies for priorities, and he focuses on those priorities as he works to develop a budget.

The 14-member Budget Committee accepted the recommendation from five financial experts it depends on for advice on a revenue estimate.

Normally, the governor and budget committee adopt an initial revenue estimate in the fall based on the recommendations of the experts. But this past fall, Gov. Tate Reeves and the budget committee were unable to agree on an estimate.

The committee, led by Hosemann, contended the estimate made by the experts and embraced by Reeves was too high.

The estimate adopted Friday was about $40 million less than the estimate the financial experts recommended in the fall.

Hosemann pointed out that the growth in revenue collections this year is being fueled to a large extent by interest earnings caused by the rise in interest rates. State Economist Corey Miller, who speaks for the financial experts,  pointed out to the legislative leaders “revenues from interest on investments are up 30%, coinciding with the increase in interest rates over the last two years.”

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