Lieutenant Governor Tate Reeves has put his fiscal credibility on the line.
The former investment banker told voters in 2011 he was “a true, proven fiscal conservative with a record of executive leadership who will take the difficult stance necessary to ensure our state makes the right financial decisions.”
Reeves appeared to make the right financial decisions during his two terms as State Treasurer and during his first term as Lieutenant Governor when he championed tight budgets, limited borrowing, tax cuts, and “ending the long-time shell game of spending one-time money on recurring expenses.”
Then came 2016.
That’s when tax cuts he championed came home to roost, reducing state revenues so much that Gov. Phil Bryant had to make two mid-year budget cuts, take money out the rainy day fund, and, then, call a special session to take even more out of the rainy fund.
During its 2016 regular session, the Legislature yielded to last minute pressure to pass the Budget Transparency and Simplification Act endorsed by Reeves. Among other things, this controversial bill grabbed millions from agencies’ special funds to shore up the fiscal year budget that began July 1st …once again using “one-time money on recurring expenses.”
Mounting evidence indicates that hasty calculations and underestimating the impact of multi-million dollar tax cuts will lead to a more substantial budget shortfall this year.
And, despite weakening revenue collections, Reeves championed and got passed $415 million in new tax cuts.
So, is the Lieutenant Governor providing “executive leadership” to make the “right financial decisions?”
Elected Republicans, State Treasurer Lynn Fitch, Insurance Commission Mike Chaney, and Secretary of State Delbert Hosemann, have criticized the Legislature’s fiscal actions.
Appointed Republican heads of major state agencies questioned the wisdom and legality of the new budget act and announced unanticipated layoffs and program shutdowns.
Democrats called for “a return to fiscal sanity.”
The unapologetic Reeves said he doesn’t respond to Democrats’ complaints, adding, “they’re frustrated.
This response and others lead some observers to wonder if the intelligent Millsaps College alumnus is becoming more politician than leader. They point to his weak leadership on efforts to raise taxes for needed road and bridge repairs and his reluctance to accept ownership of current fiscal problems, e.g. blaming the Revenue Estimating Committee for underestimating tax revenue, legislative staff for a $56 million revenue miscalculation, and the “Obama economy” for the sluggish state economy (other states’ successes notwithstanding).
In contrast to Reeves’ leadership, they point to how just retired House Appropriations Chairman Herb Frierson took responsibility for problems with the new budget act. During the special session he said, “It was my responsibility to be more diligent, and I wasn’t.”
In response to criticism, Reeves contends that state finances are sound, any budget act problems can be easily remedied, long-range tax policy shouldn’t be based on short-term revenue problems, and his tax cuts will ultimately spur economic growth and tax revenues.
The coming year will fully reveal how 2016 impacted Reeves’ fiscal credibility … and future electability.