Chaos and Compromise

The Evolution of the Mississippi Budgeting Process

Brian A. Pugh

• Publisher: University Press of Mississippi
• Year: 2020
• ISBN:
  9781496830203
• Topic: Negocios y empresa
• Subtopic: Teneduría de libros y presupuestos

Chaos and Compromise: The Evolution of the Mississippi Budgeting Process takes the topic of budgeting and makes it exciting, and not just for political junkies. Instead of focusing on numbers, this book looks at the policymakers responsible for the budget. Brian A. Pugh provides a historical perspective on the decisions and actions of legislators and governors going back more than a century. Pugh reviews how Mississippi's budget making evolved and sifts legislation and litigation as well as those legislators and governors responsible for developing this process. Pugh explains in detail the significant actions taken by the legislative, judicial, and executive branches of government that affected Mississippi's procedures. Significant legislation covered includes the passage of Senate Bill 356, which gave the governor the authority to prepare and submit a budget recommendation in 1918; the passage of the Administrative Reorganization Act of 1984; the passage of the Budget Reform Act of 1992; and the passage of the Financial and Operational Responses That Invigorate Future Years Act (FORTIFY) during the First Extraordinary Session of 2017. The first two chapters provide a historical perspective and give the reader an understanding of how legislation and litigation contributed. The book also covers interventions by the courts, which led to the unprecedented separation of powers case Alexander v. State of Mississippi by and Through Allain (1983). In addition to discussing important laws and legislators, Pugh takes a detailed look at six of Mississippi's recent governors—Bill Allain, Ray Mabus, Kirk Fordice, Ronnie Musgrove, Haley Barbour, and Phil Bryant—to examine their methods for getting the legislature to include their ideas in the often anguished process of making a budget.

Chapter 1

The Origin and Evolution of Mississippi’s Budget Process and Control over It

One cannot discuss Mississippi’s budget process without first understanding the control of Mississippi government’s power structure, which has changed significantly over time. Mississippi’s first constitutional convention convened in the town of Washington in Adams County to finalize a draft constitution and voted, after deliberating and amending the proposed document, to adopt Mississippi’s first constitution.¹ The convention delegates signed the constitution on August 15, 1817;² it was a simple and brief document consisting of a mere eighteen pages.³ The Mississippi Constitution of 1817 established a weak executive and a strong legislative branch of government, and it provided for an independent judiciary, the latter being similar to that of the US Constitution. Mississippi’s early constitutional framers were reluctant to give the executive branch too much power, because they were still suspicious toward a powerful executive. Political scientist Tip H. Allen Jr. explained why the young state was hesitant to give the executive branch too much power, stating “Mississippians still remembered their nation’s bitter conflicts with the British king and colonial governors, as well as their own recent feuds with territorial governors.”⁴

The feud came with Mississippi’s very first territorial governor, Winthrop Sargent (May 7, 1798–May 25, 1801), who was appointed by President John Adams and later dismissed by President Thomas Jefferson. Governor Sargent was a Harvard-educated aristocrat, as well as a Massachusetts Puritan and devout Federalist, who clearly did not connect with Mississippians. Governor Sargent acknowledged in a private letter to Secretary of State John Marshall that he was not “over anxious of popularity [and] I shall never be so far Degraded, as to become the Machine of the Multitude.”⁵

The first Mississippi Constitution gave the legislature a tremendous amount of power, including the ability to appoint all major state officials except for the popularly elected governor and lieutenant governor and the gubernatorially appointed judges. However, some of the legislature’s power was taken away just fifteen years later when a constitutional convention convened in Jackson in September 1832 to draft a new state constitution. The Mississippi Constitution of 1832 was passed after six weeks of work, and similar to the Constitution of 1817, the new constitution was a short document of only eighteen pages.

The Mississippi Constitution of 1832 was a product of the democratic theme in America, known as Jacksonian democracy, which stressed greater participation by the people in the political process. Historian J. F. H. Claiborne described the Mississippi Constitution as “imperfect indeed, but the freest in the world.”⁶ Legislators no longer selected most of the constitutional officials, because those positions were now elected by the people, and the people also gained the ability to elect all judges. Electing all judges by popular vote was quite innovative at the time, making Mississippi the first state to do so, and by 1961 all states had followed Mississippi’s example.⁷ The Constitution of 1832 was clearly a gain for the people regarding the judicial branch, but the executive branch remained weak under the new constitution.

Mississippi’s next constitution, the Mississippi Constitution of 1868, was unconventional in two major ways compared to the first two, because it was born of military defeat in the Civil War, and because eighteen of the ninety-seven delegates elected were black. Mississippi was under the supervision of Gen. Edward Ord after the conclusion of the war, and he called for a convention that would write a new constitution that would meet Congress’s requirements for the state’s restoration into the Union. The Mississippi Constitution of 1868 was framed after delegates assembled in Jackson and drafted the twenty-four-page document. It provided the executive branch with more power, compared to the 1817 and 1832 constitutions, giving the governor the authority to appoint judges with the consent of the senate—thus eliminating the elective judiciary of the 1832 constitution. Furthermore, the governor’s term was extended to four years, instead of the two-year terms granted in the previous two constitutions, with no limitation on succession. In other provisions, the legislature was directed to meet annually, and the state’s first poll tax was introduced, which was intended to support education and not to prevent people from voting.⁸

The Mississippi Constitution of 1890 reversed the trajectory taken by the 1868 constitution and reverted back to the tradition of a weak governor, and further diminished the strength of the office by making the governor ineligible for immediate reelection. One benefit gained by the governor in the new constitution was the partial veto over appropriation measures. The 1890 constitution also mandated biennial legislative sessions instead of the annual legislative sessions called for in the previous constitution. One constitutional barrier affecting the legislature’s ability to increase public spending was the requirement that all bills raising revenue receive a three-fifths vote in the Mississippi Senate and House of Representatives.⁹

The constitutional convention finished its work on the 1890 constitution by late October, and the final document was formally adopted on November 1, 1890. The Mississippi Constitution of 1890 is still the state’s basic law, because a constitutional convention has not convened since 1890. The constitution does not mention a constitutional convention, but the assumption is that the legislature has the authority to call one. One major criticism of the 1890 constitution is that the executive branch suffers from a lack of power and executive functions because the constitution provides for the independent popular election of heads of key executive departments.

In Mississippi the governor does not have the number of will and pleasure appointments that provide governors in other states with backdoor leverage over budget proposals. Government officials that are appointed by executive officials in most states, such as state insurance commissioners and transportation commissioners, are elected in Mississippi, further diluting executive influence. Although the legislature lacks the constitutional or statutory powers to govern or select the professional department heads elected by the people, they still control the agencies’ appropriations and may sometimes try to use that as leverage for controlling some agency decisions.

Legislative Dominance over the Budget

The Mississippi Legislature dominated the budget process for just over one hundred years following the end of Reconstruction in 1877, with the exception of a few decades in the early-to-mid-twentieth century. The legislature did not control the budget process by giving itself blatant authority; instead, it controlled the budget process by weakening the influence of the executive branch of government. Mississippi governors lack the constitutional and statutory budgetary powers of chief executives in many other states. The Mississippi Legislature has allowed the governor to be a part of the budget preparation and proposal phase since the early 1900s but has rarely paid attention to the executive budget recommendation (EBR).

The legislature established the Commission of Budget and Accounting in 1955 to replace the Budget Commission, an executive commission created in 1932, which gave themselves control over the budget-making process. The old Budget Commission had no legislators serving on it, while the new five-member Commission of Budget and Accounting was made up of four legislators and the governor. Today’s budget process consists of two budget recommendations sent to the full legislative body, one being sent by the governor and the other by the Joint Legislative Budget Committee (JLBC), which the legislature established in 1984. Historically, the latter budget recommendation has been used as the starting point for deliberation on appropriations when the legislative session begins. The JLBC membership currently consists of fourteen individuals, and they are all legislators except for the lieutenant governor, an executive branch official who presides over the senate. The JLBC and its staff are discussed at length in chapter 3.

Executive Involvement

The legislature gave the executive branch of government the authority to submit a budget recommendation in 1918 when it approved S.B. 356 on March 27 of the legislative session.¹⁰ The senate bill empowered and directed the governor to prepare and submit to the legislature a budget for handling the state’s affairs for the biennial period (today the legislature meets annually, and an annual budget is submitted). State agencies that were supported in whole or in part by state funds were required to submit to the governor’s office a detailed estimate of expenditures necessary for the biennial period, along with an explanation of the changes compared to the previous year’s appropriation. The governor was given the authority to revise the estimates submitted by the agencies and offer his own recommendation to the legislature.

S.B. 356 also gave the governor the responsibility for properly summarizing the revised expenditures and making sure that they did not exceed revenue. The governor also had to provide detailed revenue sources for all of the recommended expenditures. Further requirements by the law mandated that the governor make a part of the budget an official statement by the auditor of public accounts. The auditor of public accounts was then directed to furnish an official budget document consisting of the state income from all sources and expenses, as well as disbursements, for all purposes as shown by the books in the auditor’s office for each of the two preceding years. Finally, a detailed statement of the bonded and other indebtedness of the state had to be submitted, along with the revenue and expenditure statement, to show a true picture of the state’s financial condition. The governor’s budget had to be mailed to each member of the legislature ten days prior to the convening of the legislative session; the governor then had to present the budget on the first day of the session. For thirty-seven years after the passage of S.B. 356—1918 through 1955—the Mississippi budget was prepared by the executive branch and submitted to the legislative branch for consideration.¹¹

Gov. Theodore G. Bilbo was in office when S.B. 356 passed, and he was the first governor to submit an executive budget under that act. Bilbo was a very controversial governor, but he found ways to get the legislature to support his fiscal agenda. Bilbo believed that the rich should pay more and the poor should pay less. In his inaugural address to the legislature, Bilbo explained that the remedy for the state’s poor financial situation was “a complete revision of our whole fiscal system under which … the tax burden is not only not equal and uniform, as provided in the Constitution, but falls heaviest on those least able to bear it, and in its imposition is grossly unjust, unequal and inequitable.”¹² He inherited a large budget deficit when he entered office and was successful in recommending several tax measures to correct the situation.

Jackson Daily News editor Fred Sullens, a huge opponent of Bilbo, begrudgingly admitted that “we must give the devil his due and frankly admit that Theodore’s administration has been one of substantial achievements.”¹³ Positive words from Bilbo’s editorial antagonist Sullens was no small matter. It was quite apparent that Sullens was no fan of Bilbo, describing him as “a pimp and frequenter of lewd houses.” Bilbo’s response to Sullens showed that the resentment was mutual when he retorted that Sullens “is a degenerate by birth, a carpetbagger by inheritance, a liar by instinct, an assassin of character by practice, and a coward by nature!”¹⁴ Bilbo proved to be both a filthy-mouthed orator as well as a governor who could balance a budget, at least during his first term (1916–1920). Bilbo was elected to a second term (1928–1932) and had little budget success, leaving office with a huge budget deficit.

Bilbo accomplished his fiscal agenda during his first term while having a less-than-stellar relationship with many members of the legislature. Prior to becoming governor in 1916, a youthful Senator Bilbo was accused by fellow senators of taking bribes and was nearly expelled from the Mississippi Senate. The hearing to expel Bilbo was held on April 14, 1910, and the senate fell one vote short of the two-thirds majority required to dismiss him, with the final vote count being 28 to 15. The senate asked Bilbo to resign after it failed to remove him, but he refused. After Bilbo’s refusal to resign, a resolution was adopted, by a vote count of 25 to 1, condemning his acceptance of a bribe and calling him “unfit to sit with honest, upright men.”¹⁵

During his first term, Bilbo was successful in getting the legislature to support his fiscal agenda to raise taxes on the rich, but the legislature did not fund his whole budget request. With Bilbo, as with other governors, the final budget approved by the legislature in most cases was significantly different from what the governors recommended. Legislatures in other states rarely ever approve executive budgets in their entirety without some modifications.

Martin S. Conner was inaugurated as governor of Mississippi on January 19, 1932, during the worst depression in American history. Governor Conner was fully aware that he could not dig Mississippi out of the financial crisis alone and knew that it would take a collaborative effort with the legislature. He acknowledged in his inaugural address the grim reality of the disruption in the state economy that he and the members of the legislature had to confront:

We assume our duties when men are shaken with doubt and with fear, and many are wondering if our very civilization is about to crumble. The problems presented to us by this unprecedented, worldwide condition demand for their solution sane minds, clear vision, and courageous hearts…. In our deliberations here we must speak frankly and act justly.¹⁶

Conner became familiar with the state’s revenue problems when he served as speaker of the house and had to work with Lt. Gov. Lee Russell, who was thought to have “run the Senate for Bilbo.”¹⁷ Then-Speaker Conner and Russell did not get along well. “Despite their personal animosity, Conner and Russell served on a special committee between the 1916 and the 1918 legislative sessions with Alfred Stone, Bilbo’s appointee to the new tax commission. Bringing national experts to Jackson, they sought ways to end Mississippi’s chronic shortage of tax revenue.”¹⁸ Although Conner prided himself on his commitment to fiscal responsibility, he understood that drastic measures had to be made to overcome the state’s financial crisis.

Governor Conner inherited a bankrupt treasury and a $13 million deficit from Bilbo’s second term. The “Bilbo administration had bequeathed to its successors a near-empty treasury with a balance of only $1,326.”¹⁹ Conner proposed a 3 percent sales tax to the legislature to eliminate the deficit.²⁰ Conner did not hide his thoughts of what would happen should the legislature fail to pass a tax increase. He explained:

If you will enact a three percent tax upon sales, together with other revenue measures … I am prepared to accept full responsibility for the result…. If you fail to adopt this program or neglect to make provisions for other suitable and fair means, and as a result, the state’s obligations are not met, its credit not restored … I warn you now, in all kindness of spirit, and give notice to the people of Mississippi, that I decline to share the responsibility which will be yours.”²¹

Connor knew that he would have to get support from key legislative leaders in order to get the sales tax passed. He solicited help from four of the most influential legislators—Speaker of the House Thomas L. Bailey, Rep. Walter Sillers, Rep. Laurence Kennedy, and Rep. Joseph George, who were known as the “Big Four”—to essentially guarantee that the act would pass. Conner’s relationship with members of the Big Four went back to his days as a legislator. “Sillers joined Conner and Bailey to form a clique to run the House of Representatives” before eventually bequeathing “the speakership to Bailey when he resigned to run for governor.”²² Conner’s relationship with the Big Four proved advantageous in getting the tax increase passed.

The Emergency Revenue Act of 1932 was the “most spectacular fight during [the 1932 legislative] session,” and it became law with the passage of H.B. 328.²³ “By a change of one vote the Emergency Revenue Act was passed and signed into law by Governor Conner on April 26, 1932. It provided for a 2 percent retail sales tax.”²⁴ With the enactment of the sales tax, Mississippi became one of the first states in the nation to pass a sales tax. The tax increase eventually fixed the revenue problem, and when Conner left office in 1936, the state had a $3 million surplus.²⁵ Alfred Holt Stone, chairman of the State Tax Commission, was responsible for the administration of the sales tax, and he stated that “[t]he first six months of operation in Mississippi has resulted in the collection of revenues to the amount of $1,173,721…. We have gone far enough, however, to justify the statement that the administration of the law has been satisfactory.”²⁶ Conner contributed a great deal to the efforts...