As Chair of the Board of Directors for College Savings Mississippi, I recently had to deliver to the Legislature a resolution requesting a special appropriation of $12.6 million to help close a shortfall in the MPACT Legacy program. This is the fourth resolution making a request for a special appropriation.
You may recall that the Board made the decision in 2012 to defer enrollment in the Mississippi Prepaid Affordable College Tuition (MPACT) program in order to do its first actuarial audit. Unfortunately, the audit confirmed our suspicions that the program was not sustainable as structured. The Board restructured MPACT and reopened it to enrollment in October 2014. The new program, MPACT Horizon, is now cost-neutral to taxpayers and more cost-effective for college savers. And, in each audit done since reopening, it has met or even exceeded its funding goals.
But, the Legacy program still carries a $126.4-million shortfall from before deferment. In fact, MPACT Legacy is only 72.1% funded and without a cash infusion from the Legislature, it will be insolvent by 2025. MPACT carries the full faith and credit of the State, so taxpayers will bear the brunt of the insolvency one way or the other. By asking for smaller cash infusions each year, the Board hopes to reduce that burden.
Jason Branning, Investment Committee Chairman for the College Savings Mississippi Board, and I recently wrote a piece in the Clarion-Ledger to explain this situation. You can read it here. You can also read the Board’s resolution to the Legislature here and accompanying cover letter here.