State’s special fund management ‘deplorable’

Editorials

January 17, 2010

Anonymous The Laurel Leader-Call Sun Jan 17, 2010, 01:21 PM CST

The Mississippi Legislature's track record on managing special funds — the tobacco trust fund, the State Tax Commission lawsuit settlement, transportation funds, and the list goes on — is rather deplorable.

Lawmakers have managed to scavenge special fund or "one-time" money that they promised taxpayers would be "inviolate" and spent it to the nubs, many times for purposes unrelated to the original intent that special funds were set aside in the first place.

Now that Mississippi is mired in a recession of historic proportions and is experiencing record revenue shortfalls, the temptation for lawmakers to leave no special fund undisturbed is again sky high.

Special fund raids are also apparently becoming enticing for local governments as well. One of the options on the table as lawmakers attempt to pass a fiscal 2011 budget is to allow school districts to use their 16th Section principal funds to help meet general revenue expenses such as teacher salaries.

Rep. Mark Baker, R-Brandon, introduced House Bill 394 to "begin a discussion" about how the state could extend schools some flexibility with regard to their funds.

Baker's legislation would allow school districts to tap into their 16th Section school trust land principal funds to make up for expected deep state budget cuts to education.

"It's one thing to think about the future generations, but you can't do that when you're forgetting about the present generations," said Baker.

Right now, districts can use the interest generated from those funds for general revenue purposes or borrow from the fund with 4 percent interest for capital expenses. Jefferson Davis School District, for instance, had a $17.35 million 16th Section Land fund balance in 2008, according to the secretary of state's office. Oil and gas royalty income also has bolstered funds above $10 million for the school districts of Adams County and Natchez, Jones County, Lamar County and Wayne County. Another 27 school districts have account balances topping $1 million; and an additional 66 schools have between $16.50 and $500,000, the secretary of state's office reported.

But Secretary of State Delbert Hosemann, whose duty it is to safeguard school trust lands, says drawing down the principal fund will deplete interest payments in the long run for schools that manage 16th Section funds.

Hosemann further contends that opening up the principal funds also will negatively impact the amount of matching money that north Mississippi school districts without 16th Section lands, the state's 43 Chickasaw Cession counties, receive as part of a court settlement.

School trust lands are just that — trusts — for Mississippi schoolchildren. Spending a child's education funds to get through a bad budget year is poor policy at home and it's poor state and local government policy as well. Don't do it.

– The Clarion-Ledger, Jackson

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