Budget Terminology

Fiscal Year – The State of Mississippi fiscal year (FY) begins July 1st and ends June 30th. The fiscal year of cities, counties and the federal government begins October 1st and ends September 30th. The Year refers to the ending year of the FY. (Ex.: The fiscal year beginning July 1, 2024 and ending June 30, 2025 is "FY 2025.")

Major Objects of Expenditure – The nine expense categories used within the statewide accounting system. They are: 1) Salaries; 2) Travel; 3) Contractual Services; 4) Commodities; 5) Capital Outlay – Other than Equipment; 6) Capital Outlay – Equipment; 7) Capital Outlay – Vehicles; 8) Capital Outlay – Wireless Communication Devices; and 9) Subsidies, Loans and Grants.

Performance Measures – Statistics which quantify the results achieved by government programs. Three types of performance measures are utilized with the State budget system: 1) Program Outputs (volume); 2) Program Efficiencies (cost per unit); and 3) Program Outcomes (results or quality). The use of performance measures is required by statute as a result of the passage of SB 2995 of the 1994 Legislative Session. Performance measures are included in agency budget requests and in appropriation bills for the majority of the State General Funds.

Strategic Plan – A 5-year plan prepared by an agency that establishes long-range goals for the agency and a course of action to achieve those goals. The preparation of strategic plans was required by SB 2995 of the 1994 Legislative Session. Strategic plans are submitted by each state agency along with their annual budget request.

Lapse – The unexpended portion of any General Fund or State Support Special Fund (SSSF) appropriation which is returned ("lapsed") back to the General Fund or respective SSSF at the close of the fiscal year.

Built-ins – New costs arising from new or expanded programs which are deemed as mandatory due to state or federal law, court order or previous legislative commitment. The calculation of built-in costs is often difficult in that while a new program may be mandated, the level at which it is to be funds is not mandated.

Attrition – A reduction in personnel which occurs through the normal processes of resignations and retirements. The word “attrition” is often used incorrectly to refer to a reduction in salary costs achieved by deleting a portion of the funding associated with vacant positions.

Continuation – A level of funding that would allow all currently authorized programs within an agency to continue at the current level of services. New or expanded programs normally require funding above the continuation level. Continuation funding may be more or less than the prior year’s funding level.

Deficit/Additional Appropriation – An additional appropriation is an appropriation made to supplement an original (or “regular”) appropriation. Additional appropriations are normally made during the legislative session that follows the session in which the original appropriation was made. A “Deficit” appropriation originally referred to an appropriation required to alleviate a severe or unanticipated shortage of funds but is now used interchangeably with “additional” or “supplemental”.

Statement I – The primary financial statement reflecting the annual budget recommendation of the Joint Legislative Budget Committee. The format of Statement I presents a financial flow chart of all General Fund cash balance, revenue, and appropriations for both the current fiscal year and the upcoming fiscal year covered by the recommendations.

Out-Year Projection – A budget document which illustrates a multi-year budget plan based upon a series of revenue and expenditure assumptions. The out-year projection is particularly useful in analyzing the budget impact or programs whose costs are phased-in over several years. The use of out-year projections began as a recommendation contained within the budget study required by the Budget Reform Act of 1992.

Transfer – A shift of funds among the major object of expenditure amounts set forth in an agency’s appropriation bill (when funding is not appropriated in a lump sum). Certain statutory restrictions apply: 1) No funds can be transferred into or out of salaries; 2) No funds can be transferred into equipment; and, 3) No major object of expenditure can be increased by more than 10% above the original appropriation amount. The transfer transaction must be approved by DFA.

Escalation – An increase in an agency’s special fund expenditure authority and/or position count above the level specified in the appropriation bill. The source of the escalated funds is normally federal funds but the language in some appropriation bills allows the escalation of special funds. The escalation transaction must be approved by DFA.

Recurring/Non-recurring – This is a designation given to both sources of revenues and expenditures. A revenue source or expenditure is designated as recurring if under existing law it will continue into the next fiscal year. If the revenue source or expenditure will not continue into the next fiscal year, it is designated as nonrecurring. A non-recurring revenue source of expenditure is considered to be a “one-time” type of funding source.

Allocated/Unallocated – A designation that refers to sources of funds. Available funds that have not yet been recommended, appropriated, or sometimes, simply not yet expended may be referred to as being unallocated.

Lump Sum Appropriation – An appropriation without budget controls at the object of expenditure level. Funds are appropriated in a single figure for General Funds and /or Special Funds. The agency may expend these funds without spending caps on categories of expenditures such as salaries, equipment, etc.

Line-Item Appropriation – An appropriation with budget controls at the object of expenditure level. Funds are appropriated in multiple figures for General Funds and/or Special Funds. The agency may expend these funds within the spending cap allotted on categories of expenditures such as salaries, equipment, etc.

In-Range Adjustments – Salary adjustments made under this mechanism are capped at a cumulative total of 7% per fiscal year. There are three mechanisms:

Title Change – Positions for which salary adjustments are being made due to a change in the title and duties of the position. (Ex: Secretary to Nurse). May be upward, downward, or lateral.

Additional Compensation – Additional form of compensation to employees in the delivery of essential services within or outside of the standard work schedule or workplace. Includes travel, standby pay, call back pay, shift pay, special duty pay or type/duty/location pay.

OBRS – The Online Budget Request System (OBRS) is the Legislative Budget Office’s web application used by state agencies to enter and submit their annual budget request. Agency budget requests that have been approved by LBO Analysts are published to the LBO website, Budget Request System page.

State Support Funds – Includes State General Funds and State Support Special Funds. It does not include Federal Funds or agency-generated Special Funds.

Significant State Support Special Funds:

Budget Contingency Fund (BCF) – A fund created to receive transfers from other fund sources, including general and special funds. The BCF was first used in FY 2002 to supplement the State General Fund. Funds expended from the BCF are considered non-recurring. In FY 2017, the BCF received the first installment payment of $150 million from the BP Litigation Settlement, that was later transferred to various recipients. In FY 2021, the BCF received $900 million in Coronavirus Relief Funds. In accordance with HB 1814 of the 2020 Regular Session, all funds that had not been expended by December 15, 2020, were transferred to the Unemployment Insurance (UI) Trust Fund by December 30, 2020.

BP Settlement Fund (BPSF) – A fund created in SB 2002 of the 2018 1st Extraordinary Session. The fund receives 25% of the court ordered payments due the State of Mississippi as a result of the BP Settlement litigation. The fund began receiving $10 million annually in FY 2019 and will continue through FY 2034. The fund is administered by DFA at the direction of the Legislature through appropriations made.

Capital Expense Fund (CEF) – A fund created to provide support for capital expenses needs, repair and renovation of state-owned properties, and specific projects authorized by the Legislature. The fund receives non-recurring supplemental funds from other fund sources, including general and special funds. The general funds received are derived from a distribution of the fiscal year unencumbered ending General Fund cash balance as set out in statute.

Education Enhancement Fund (EEF) – A fund created for the supplemental support of K-12, Two-Year Colleges, and 4-Year Institutions of Higher Learning. The statute requires that a percentage of state sales and use tax collections be deposited into the Education Enhancement Fund. These funds are then allocated based on a statutory formula to K-12 Education, Two-Year Colleges, and 4-Year Institutions of Higher Learning. SB 2001 of the 2018 1st Extraordinary Session established the state lottery and required net lottery proceeds in excess of $80 million be deposited into the Education Enhancement Fund each fiscal year.

Gulf Coast Restoration Fund (GCRF) – A fund created in SB 2002 of the 2018 1st Extraordinary Session. The fund receives 75% of the court ordered payments due the State of Mississippi as a result of the BP Settlement litigation. The fund began receiving $30 million annually in FY 2019 and will continue through FY 2034. The fund is administered by the Mississippi Development Authority at the direction of the Legislature through appropriations made.

Health Care Expendable Fund (HCEF) – A fund created to receive statutorily authorized transfers from the Health Care Trust Fund. The Health Care Trust Fund receives the court ordered payments due the State of Mississippi as a result of the lawsuit won against tobacco manufacturers. Health Care Expendable Funds are to be appropriated for health-related purposes.

Tobacco Control Fund (TCF) – A fund created for the support of tobacco cessation programs. The Tobacco Control Fund receives a portion of the court ordered payments due the State of Mississippi as a result of the lawsuit won against tobacco manufacturers.

Working Cash Stabilization Fund (WCSF) – A fund created to aid the Office of the State Treasurer with cash flow needs throughout the fiscal year, cover any projected General Fund revenue shortfalls that may occur in a fiscal year, and provide funds for the Disaster Assistance Trust Fund when requested. These funds are derived from a distribution of the fiscal year unencumbered ending General Fund cash balance after the close-out period has been completed as set out in statute. In accordance with SB 2002 (FORTIFY Act) of the 2017 1st Extraordinary Session, the FY 2018 cap is calculated by taking 10% of the appropriation amounts reflected in the State of Mississippi’s Budget Bulletin which includes appropriations, reappropriations, and additional/deficits for the fiscal year that the unencumbered General Fund cash balance represents. Prior to FY 2018, the cap was 7.5%.