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Eric J. Shelton/Mississippi Today

Economic development committee members listen to a presentation during an economic development committee meeting at the Capitol in Jackson, Miss., May 7, 2020.

The decision to extend Mississippians’ tax deadline until July 15 will likely force Gov. Tate Reeves and the Legislature to dip into the rainy day fund to balance the budget for the current fiscal year that ends on June 30.

It is likely too late to make budget cuts in the current fiscal year to offset the revenue shortfall that is beginning to amass as a result of the economic slowdown related to the COVID-19 pandemic – leaving the rainy day fund as the best option to offset drops in tax collections.

Reeves recently said the state’s Working Cash Stabilization Fund, commonly called rainy day fund, contains $550 million. Under current law, the governor can spend $50 million in the fund without legislative approval.

“If that becomes necessary, we will work with the Legislature to make that happen,” Reeves said of dipping into the rainy day fund. “It is certainly a possibility.”

Lt. Gov. Delbert Hosemann said earlier that he was hopeful leaders could make it through the current fiscal year without dipping into the fund and have it on standby for the next fiscal year when sluggish tax collections also are expected. While revenue was expected to plummet during the final months of the current fiscal year because of the coronavirus-induced economic slowdown, officials hoped there was enough of a financial cushion to avoid the use of the rainy day fund. Before the pandemic hit, state revenue collections had been moderately strong.

But when officials decided earlier this month to move the income tax filing deadline to July 15, it meant that money the state normally collected in the current fiscal year – because of the April 15 deadline to file tax returns – would not be collected until the next fiscal year as people delayed filing their tax returns. The state opted to move its filing deadline to July 15 to coincide with the delay granted on the federal level to give those struggling with the fallout of COVID-19 more time to file their taxes.

The delay should boost revenue collections for the next fiscal year, but with many businesses closed in March and April and with record unemployment, revenue collections still are expected to be dismal at least early in the upcoming fiscal year, making budget cuts in areas like education, health care and law enforcement a possibility.

For April, revenue collections – thanks in large part to postponing the tax filing deadline to July 15 – were $244 million short or 29.5 percent short of the official projection, according to the report released on Monday by the Legislative Budget Committee.

April’s dismal report means the financial cushion that the state had going into the month of April has evaporated. The state has now collected $26.3 million or .57 percent less in revenue than the amount that was appropriated during the 2019 session to fund state agencies and education entities, making it likely that the rainy day fund will be needed to plug budget holes.

The big drain on revenue was, of course, because of the personal income tax collections – related at least in part to the postponement of the filing deadline. Personal income tax collections were $125.8 million or 43.5 percent below the estimate. But most other sources of revenue also were down. The sales tax collections were down $17.6 million or 8.9 percent while the corporate tax collections, which also were impacted by the delay until July 15 to file, were down 50.8 percent or $89.9 million.

One of the only bright spots was the use tax collections, which is a 7 percent tax collected primarily on internet sales. They were up 6.3 percent, or $1.7 million, in April.

The Legislature’s work in May and June to pass a budget for the upcoming fiscal year will be impacted by the drop in tax collections, making budgets cuts a possibility. Legislators are hoping to pass a teacher pay raise for the upcoming fiscal year of about $1,000 annually, costing $78 million. The revenue situation will make that effort more difficult.

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The Mississippi state auditor has officially questioned $94 million in welfare spending connected to what the office has called the largest public embezzlement scheme in state history.

Here’s what was bought versus what we could have been bought with funding from the federal Temporary Assistance for Needy Families program, which is intended to assist families in poverty or prevent families from reaching poverty.

Here’s a breakdown of the calculations in each item:

Volleyball versus child care:

Nonprofit Mississippi Community Education Center paid the Southern Mississippi Athletic Foundation $5 million through a lease so the foundation could build the new state-of-the-art volleyball stadium on campus, Mississippi Today first reported. The nonprofit said it would use facilities to conduct programming for the area’s underserved population but since has used the university facilities for one event.

The average annual cost of child care in Mississippi is $5,436, according to Economic Policy Institute. Five million dollars could have paid for a year’s worth of child care for 920 low-income families so they could go to work.

Self-help training versus electricity

Ted DiBiase Jr.’s companies received $3,147,487 from Mississippi Community Education Center and Family Resource Center of North Mississippi to conduct various leadership training and motivational self-help courses, according to the audit.

That amount could have paid the average electricity bill of $138.63, according to U.S. Energy Information Administration, 22,704 times.

Famed quarterback endorsements versus diapers

With the $1.1 million in welfare funds the nonprofits paid Brett Favre for speaking engagements he never attended, according to the audit, Mississippi could have purchased roughly 3 million diapers, about a year’s worth for 1,145 moms. The average cost of diapers is $80 a month, according to the National Diaper Bank Network.

Diapers are essential to the health of babies, but nationally, 57 percent of parents with diaper needs who rely on child care, most of which require parents to provide diapers, said they missed an average of four days of school or work  in the past month because they didn’t have diapers, the Network reported.

Luxury vehicles versus transportation stipends

Mississippi Community Education Center bought three vehicles — a 2018 Armada, Silverado Chevrolet Truck and Ford F250 — for its founder Nancy New and her sons Zach and Jess totaling $166,318, according to the audit.

TANF pays transportation stipends of between $200 and $300 for low-wage workers to get to work. With the amount the News spent on their vehicles, the state could have funded 655 stipends — a full year’s worth for 55 workers.

Flora horse ranch rent versus rent for low-income families

Mississippi Community Education Center paid $371,000 towards the loan on Marcus Dupree’s Flora ranch, owned by his foundation but which appears to be a personal residence, the auditor said and Mississippi Today first reported, not including the $198,846 it paid Dupree in salary.

For the amount it paid on his mortgage, the state could have covered one rent payment on the average 2-bedroom apartment ($750, according to the National Low Income Housing Coalition) to prevent eviction for 494 families.

Fitness boot-camp versus meals

Mississippi Community Education Center paid Paul Lacoste’s company Victory Sports Foundation $1,309,183, which included a $70,000 vehicle, to operate a boot-camp style fitness program that Lacoste also charged some participants a fee to attend, according to the audit.

Mississippi could have used $1.3 million to buy 446,820 meals averaging $2.93 each, according to Feeding America.

Questionable spending versus basic cash assistance

Mississippi spent just 5 percent of TANF in 2018 on basic cash assistance to needy families, about $170 a month for a family of three, which they can use towards the essential items — toiletries, school supplies, cleaning products, rent, utility bills —  that can’t be purchased with Supplemental Nutrition Assistance Program benefits, formerly known as food stamps.

The cash assistance reaches about 3,500 families, roughly 6 percent of families living in poverty in Mississippi.

If Mississippi had spent $94 million on cash assistance, it could have reached roughly 46,078 families, or 42 percent of families living in poverty.

Read all of our welfare in Mississippi coverage here.

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si.com

Michael Jordan’s stab at baseball did not get a glowing review from Sports Illustrated in 1994.

This past Sunday night, we reached the part in Michael Jordan’s The Last Dance in which Jordan – at age 31 and having not played baseball in 14 years – leaves the Chicago Bulls to try to make the Major Leagues.

This was 1994. As it happened, Jordan began his second professional sports “career” with the Birmingham Barons, the Chicago White Sox Class AA affiliate. The Barons included two former outstanding Mississippi college players: Chris Snopek of Ole Miss and Kerry Valrie of Southern Miss.

Rick Cleveland

I mention Snopek and Valrie here to show just how audacious it was what Jordan was trying to do. Snopek once hit .407 and with power for Ole Miss. Valrie, when he wasn’t intercepting passes to beat Alabama as a safety for the Southern Miss football team, was a speedy, line-drive hitting baseball standout.

Both Snopek and Valrie had spent several years in the minor leagues working their ways up to Class AA, which is well-recognized as the make-it-or-break-it level of professional baseball. It is often said that Class AA is where you show whether or not you can hit in the big leagues.

Jordan, after 14 baseball-less years, was trying to start there! It was ludicrous.

No doubt, Jordan was quite possibly the greatest athlete on the planet. Nevertheless, I thought what he was trying to do was unrealistic at best and foolhardy at worst and wrote just that in The Clarion-Ledger. And, on April 8, 1994, when Jordan made his Birmingham debut, I drove over to Hoover Metropolitan Stadium to see it happen. It was, as you might suspect, something akin to a circus atmosphere: standing room only crowd of more than 10,000 for a team that rarely drew even half that many. All the national news outlets were covering and so were reporters from Japan and Korea.

My first impression was that Jordan did look mighty swell in a baseball uniform – tall, strapping, broad shoulders, and slender waist.

And then he stepped into the batter’s box and did not look so good – at all. Actually, Jordan narrowly escaped calamity before he ever came to bat. The second batter for the Chattanooga Lookouts lofted what should have been a routine fly ball to right field, where Jordan was playing. Jordan misjudged it, recovered and then made a leaping catch. If you’ve ever seen a little league game, you’ve probably seen the same thing happen. No matter, from the crowd reaction, you might have thought Jordan had leaped over the moon to rob a home run.

When Jordan, batting seventh, came to the plate in the second inning, he lifted a lazy fly ball that either the second baseman or right fielder could have caught. The right fielder took it. And that was the batting highlight of the night for Jordan. He struck out on both his second and third at bats, looking like a uniformed impostor on his last at bat, flailing at a third-strike breaking pitch that he missed by a foot.

Jordan was on deck when the game ended and most of the sellout crowd was still around – a testament to just how big a draw he was.

Afterward, both Valrie and Snopek sang praises of their famous teammate.

Kerry Valrie

“People talk about his lack of bat speed,” Valrie said. “All I can say is he hits as many balls out of the park in batting practice as anyone.”

Perhaps, but that’s why they call them batting practice fast balls.

Chris Snopek

Said Snopek of Jordan, “If he were 22 or 23 now, there’s no question he would become a Major Leaguer. He has the tools. The only question is his age.”

From all accounts, Jordan was a terrific baseball teammate. He catered elaborate post-game meals and even paid to upgrade the Barons’ team bus that took them from ballpark to ballpark around the Southern League. “Everybody is pulling for him,” Valrie said. “He’s a great guy. He just wants to be one of the team like everyone else.”

But he was Michael Jordan, of course. And baseball surely made him human. When Class AA pitchers learned he could not hit a breaking pitch, that’s virtually all he was thrown. He struck out 114 times in 436 at bats. He eventually hit .202 for the season. That’s right: The greatest athlete in the world couldn’t hit his weight at Class AA.

In retrospect, we probably should remember his successes – amazing considering the circumstances. He did drive in 51 runs. He did walk 51 times. He did steal 30 bases.

You know the rest of the story. Jordan went back to basketball the next year and led the Bulls to three more NBA titles, further establishing himself as the greatest basketball player in history of the sport.

But baseball, as it does so many, humbled him.

“I’m just learning the game,” Jordan told us that night. “I’m trying to get to where these young guys are right now. My hand-eye coordination is good, but it has been trained to do something else for 14 years. It’s going to take a lot of swings, a lot of practice. I’m here to give it a shot.”

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Eric J. Shelton/Mississippi Today

Mississippi House speaker Philip Gunn, center, and Lt. Gov. Delbert Hosemann, right, talk after Gov. Tate Reeves press conference at the State of Mississippi Woolfolk Building in Jackson, Miss., Thursday, May 7, 2020.

On the night Tate Reeves won the 2019 governor’s race, most of the state’s top Republican elected officials stood to the side of the stage, close to the cameras, at the new governor’s victory party in downtown Jackson.

As the GOP officials listened to Reeves’s speech and scoped out reporters for live interviews, Speaker of the House Philip Gunn, who was a few hours from being elected to his third straight term as speaker, stood alone and quiet in the back of the room.

That night, the state’s political landscape changed dramatically: Reeves, the two-term lieutenant governor who sparred often with Gunn at the Capitol, was moving into the less powerful governor’s office; and Delbert Hosemann, the three-term secretary of state, was elected lieutenant governor.

Gunn, standing in the back of the room that night, must have known he’d soon have a shot at becoming the most powerful politician in Mississippi. In the past week, during the historic power struggle between the executive and legislative branches of government, he did it.

For weeks, Reeves insisted he had sole spending authority over the $1.25 billion in coronavirus relief funds the state of Mississippi had received from the federal government. But Gunn and Hosemann disagreed and abruptly called lawmakers back to Jackson on May 1 to ensure that they, not Reeves, would have that authority.

In response, Reeves threatened to veto the bill lawmakers almost unanimously passed and sue the Legislature. Gunn bowed up to those threats in the most public way — the first time since Republicans gained complete control of state government in 2012 that a GOP legislative leader stood up to a GOP governor so forcefully.

On May 1, Gunn lambasted Reeves in a press conference. Gunn, a litigator for a Ridgeland law firm, might as well have been delivering the closing argument in a courtroom, taking Reeves’ claims and citing previous court rulings and even years-earlier statements from Reeves himself to prove why they were wrong.

Gunn turned the moment into a constitutional lesson and even used one of Reeves’ go-to campaign lines about government overreach against him.

“The governor says that by letting him spend the money, he can get it where it needs to go more quickly,” Gunn said at the May 1 press conference. “That makes for a good sound bite, but what voice does that give to our citizens in the decision making process?… This is the type of mentality that says the government knows better than you how to spend your money.”

That press conference did little to subdue Reeves, who subsequently insisted that the Legislature was violating the state Constitution, that lawmakers “were trying to steal the money” from him, and that “people will die” because of the legislative intervention in the spending process.

So Gunn, the notoriously shrewd political navigator, tightened his gloves. On May 4, he sent a blistering seven-page letter to Reeves, breaking down why the governor was wrong about 12 separate claims he had publicly made. Gunn, who wrote every word of the letter himself, sources close to the speaker told Mississippi Today, pointedly questioned the governor’s motivations.

“In your comments Friday, you portrayed legislators as thieves and killers,” Gunn wrote to Reeves in the May 4 letter that was quickly leaked to Mississippi Today by lawmakers. “You said we ‘stole the money’ and people would die. Such cheap theatrics and false personal insults were beneath the dignity of your office.”

Gunn’s letter continued: “We request that you stop attempting to sensationalize this situation and work with the Legislature to solve the issues before us. This is the spirit in which our government has worked since 1817 and it shouldn’t stop today. We invite you to put aside an all out media war with the legislative branch and to work with us to provide the checks and balances that the spending of $1.25 billion should require.”

After he received the letter, Reeves stopped criticizing the Legislature. Two days later, Reeves, knowing he was in a corner, invited Gunn and Hosemann to the Governor’s Mansion to discuss a truce — one that would allow Reeves to avoid the embarrassment of a historic and near certain veto override in his first 120 days in office and an intra-party legal battle.

But Gunn wasn’t quite finished asserting his power.

On May 7, Gunn and Hosemann sat at Reeves’ daily press briefing to announce the agreement they had reached. Reeves kicked off the presser, speaking broadly about “ongoing conversations” regarding how the three would work together in coming days. Reeves declined to concede that he had lost the fight and would not have the spending authority.

Hosemann went next, softly acknowledging that legislative leadership would bring Reeves to the table to discuss how they should spend the federal funds. But Hosemann left ambiguity about the agreement the three had reached and who, exactly, would get the spending authority.

Gunn went last and, true to his blunt form in the days before, left absolutely no doubt about how this chapter of Mississippi political history would end: Reeves would have no spending authority, and the legislative leadership had gotten exactly what they wanted all along.

“The conclusion that we’ve reached is the Legislature will appropriate those dollars while working in conjunction with the governor administering those dollars,” Gunn said.

Gunn couldn’t have won the fight without Hosemann, who deserves credit. The two worked closely together as they plotted how to shut out the governor through legislation, and how they could override a veto or win a potential lawsuit.

But several times, the lieutenant governor stopped short of criticizing the governor’s position and left uncertainty about the decisions that were made. Additionally, several Republican senators who have remained close with Reeves made it impossible for Hosemann to guarantee unanimous support for the legislative leaders’ maneuvering.

After the May 7 press conference, Mississippi Today reporter Bobby Harrison stopped Gunn in the hallway. “Mr. Speaker, that letter,” Harrison said with a smile.

The speaker’s staffers laughed, but Gunn, with a straight face, replied: “I had no intention of that letter being made public.”

Whether true or not, Gunn’s letter — and his forceful actions during the struggle — showed Mississippians in no uncertain terms who holds the most power in this new era of state politics.

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President Donald Trump tweeted on April 21 that soon discussions would begin on legislation to provide “relief to state/local governments for lost revenue from COVID-19.”

The relief would be to provide funds to offset what is expected to be a dramatic drop in tax collections for state and local governments because of the coronavirus-induced economic slowdown. Without federal help, state and local governments could be forced to make large budget cuts, resulting in government worker and teacher layoffs that would further the economic slowdown and result in citizens losing services at a time they are most needed.

A few day later Trump seemed to be having second thoughts.

Bobby Harrison

Trump  tweeted,”Why should the people and taxpayers of America be  bailing out poorly run states (like Illinois, as example) and cities, in all cases Democrat run and managed, when most of the other states are not looking for bailout help? I am open to discussing anything, but just asking?”

During a recent news conferences, Gov. Tate Reeves seemed to be playing up the red state (Republican) vs. blue state (Democratic) comparisons.

“I have heard many governors, typically in blue states, spend a lot of time talking about the fact their governments, particularly state governments have a chance of being bankrupt because of this,” he said. “I don’t think Mississippi is in that position. We may have to tighten our belts. We are used to doing that.”

But he did concede, “We are going to see significant revenue losses” and ultimately said he supports federal help to fill budget shortfalls.

Preliminary numbers indicate Mississippi’s tax collections were about $240 million short of projections for April. At this point, it is likely the governor will be forced to dip in the rainy day fund to make it through the end of the fiscal year on June 30.

It also might be worth noting that Mississippi (in good and bad economic times) consistently gets more federal help than most states. According to a study by the New York-based Rockefeller Institute, Mississippi gets $2.01 in federal help for each $1 its citizens pay in U.S. taxes. Only Virginia, home of a large portion of the federal workforce, Kentucky, home of Senate Majority Leader Mitch McConnell, Alabama, West Virginia and New Mexico get a better return on their tax dollar than Mississippi.

Several blue states, like New York, Massachusetts, New Jersey and Connecticut, get less than a $1 back for each $1 their citizens send to Washington. Illinois, which seems to be the poster child for poorly run blue states, sends in a $1 and gets a dollar back.

Those states might say they would not need help if they were receiving the same deal as Mississippi.

The fact is that Mississippi has a disproportionally high percentage of poor people, who receive more federal aid. Some believe that is the way government is supposed to work.

And truth be known, Reeves and other state leaders know the economic slowdown is going to impact Mississippi’s state and local governments.

“Our municipalities are heavily dependent on sales tax revenue…I expect them to see dramatic reductions,” said Shari Veazey, executive director of the Mississippi Municipal League. Many cities, such as Oxford, Tupelo and Hattiesburg, already are planning and making cutbacks.

State government in Mississippi is expected to be impacted by drops in both the sales and income taxes – the two largest sources of revenue.

Reeves recently pointed out that normally casinos, which account for less than 5 percent of total state collections, generate between $10 million and $15 million per month in revenue to the state.

Casinos are closed. And does anyone believe it will be business as usual when they reopen? No doubt many people will stay away out of fears of the coronavirus and others will stay away because they no longer have disposable income to gamble.

In the so-called Great Recession that began in 2008, Mississippi experienced what was then an unprecedented drop in revenue for two consecutive years.

Before those reductions in 2009-10, the state had experienced only one other year since 1970 where revenues were less than in the previous year. Records before 1970 are not available.

Mississippi received more than $1 billion in federal funds to plug budget holes during the Great Recession and still had large budget cuts.

Most agree that the current economic downturn could be worse. The non-profit Center for Budget and Policy Priorities estimates that state revenues could drop during a three-year period $650 billion (cumulative in both red and blue states) compared to the $690 billion drop during a five-year period during the Great Recession.

If that is the case, states, including Mississippi, might not be red or blue, but in the red.

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