Governors, Legislatures, and Budgets: Diversity across the American States

By Edward J. Clynch; Thomas P. Lauth | Go to book overview

without raising taxes. Sluggish economic conditions coupled with popular demands for more services force public officials to cut existing programs or take a bigger share of the private economy.

In the late 1970s Mississippi's economy expanded significantly beyond the national average, but in the early 1980s the state's growth was static while the country's growth surged ahead. Mississippi's economy zoomed out of the 1973-1975 recession. Between 1976 and 1980 the state's gross state product, in 1982 dollars, increased by 18.8 percent compared to a 12.7 percent climb in the gross national product. 20 Its per capita income moved from 54 percent of the national average in 1960 to 71 percent in 1979. Only South Carolina, with an 18 percent gain, closed the gap with the national average at a rate greater than Mississippi's 17 percent. Yet Mississippi still entered the 1980s with the nation's lowest per capita income. 21

After decades of real economic growth, world conditions in the early 1980s, including declines in agricultural prices, falling energy prices, and the movement of low-skilled manufacturing jobs out of the country, buffeted the state's economy. Mississippi's 1985 per capita income slipped to 67 percent of the national average. In 1982 dollars the state's gross product between 1980 and 1985 grew only 2.6 percent while the GNP increased by 12.5 percent. 22

Mississippi's economy dropped off in the 1980s. Does the economic downturn affect the state's revenue capacity in a meaningful way? State revenue growth kept pace and even exceeded inflation for most the 1980s, but only because policymakers in Mississippi, like many states, chose tax increases to maintain the revenue base. 23 In 1983 the state increased the general sales tax from 5 to 6 percent and raised the income tax on more affluent citizens by increasing the rate on taxable income over $10,000 from 4 to 5 percent. Although Mississippi experienced budget rescissions in four years during the 1980s and reduced many agency appropriations in 1987 when revenue fell, the tax increases permitted public kindergartens to start and elementary and secondary teacher salaries to double after 1981. When faced with no alternative because of poor economic conditions, policymakers opted for higher taxes to enhance support for education.


CONCLUSION

The struggle in Mississippi between reformers who want to bring the state into the mainstream of American life and the backers of the traditional order has spilled over into budgeting. The new budget process gives the governor more leverage than before, but the legislative leadership still retains considerable clout. Like Texas, Mississippi remains a long way from an executive-centered system. The governor develops a budget proposal, but the JLBC budget serves as the basis for legislative action. The legislature may well continue to use the JLBC budget as its working document. The legislative budget, in effect, gives the legislative leadership a chance to write the budget before legislative consideration. Not surprisingly, legislators take cues from the leadership during the session. Moreover,

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