JACKSON — In a letter to Gov. Haley Barbour yesterday, State Treasurer Tate Reeves notified the governor and legislative leaders of an additional unanticipated shortfall of revenue for the FY 2011 budget.
Each year, several tobacco companies transfer the State of Mississippi an amount of money based upon tobacco usage nationally and other factors. The payment received Dec. 31, 2009, by the Office of the Treasurer was $109,745,998.40. In comparison, the 2008 payment was nearly $118 million.
The FY 2010 budget adopted by the Legislature appropriated $94 million (of which $60 million was not allocated to a specific expense) of the tobacco payments from the Health Care Expendable Fund (HCEF) and $22 million from the Tobacco Control Program Fund.
“Fortunately, the Legislature made a wise decision by not allocating $60 million from the HCEF in FY 2010, so this will not affect the current budget year,” Reeves said.
However, the Executive Budget Recommendation (EBR) and the Joint Legislative Budget Committee (JLBC) recommendation, estimated at least $115 million would be received and budgeted for the FY2011 budget year – in addition to the expected $60 million not allocated in FY 2010. Yesterday’s announcement suggests that at least an additional $20 million should be reduced from expected revenues in the EBR and the JLBC recommendation.
“This shortfall compounds the budget challenges by nearly $20 million in FY 2011. It also further illustrates the problems caused by the reliance of one-time sources of revenue for recurring expenses,” Reeves added.
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