Barbour slashing budget again

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Published: December 4,2009

Tags: revenues, state budget, state government, tax collegtions

JACKSON — Gov. Haley Barbour announced $54.3 million in budget cuts made necessary because state revenue projections have persistently outpaced actual collections.

Combined with the $170 million in budget cuts Barbour ordered in September, most state agencies now have had their fiscal year 2010 budgets trimmed by 5 percent – so far.

Barbour said, “Our budget situation is tough like every other state’s fiscal outlook. There is no indication that our tax collections will improve anytime soon. Therefore, I do not believe this is the last time I will have to reduce state spending this year.”

In the first five months of FY 2010, actual tax collections were 9.36 percent, or $172.5 million, below collections for the same period in FY 2009.

Mississippi’s budget continues to miss the revenue projections made at the end of FY 2009. So far in the current budget year, state revenues have come in 7.38 percent, or $136.8 million, below the estimate for the FY 2010.

The Governor’s Office said some agencies and programs will not be affected by this round of cuts. These include the Mississippi Adequate Education Program, Office of the Auditor, the Mississippi Tax Commission, National Board Certification program for teachers, Chickasaw Interest, the Ayers settlement, debt service and student financial aid. The budgets of the Departments of Human Services and Rehabilitation Services partially will be held harmless to comply with legal settlements. The Department of Corrections will receive a 1 percent reduction totaling $3.2 million.

Assuming revenues continue to decline, Mississippi faces a potential $386-million shortfall in FY 2010. Even with these two rounds of budget cuts, Barbour likely will be forced to reduce budgets by more than $150 million later in the fiscal year.

Barbour is statutorily prohibited from cutting any agency by more than 5 percent until spending for all agencies has been cut 5 percent. This requires uniform cuts across the board. In order to achieve additional savings in FY 2010 under current law, Barbour said he may be forced to reduce National Board Certification, potentially violate the terms of court orders and settlements and make deep cuts to agencies that have taken on additional responsibilities with no additional funding. He has asked the Legislature for the authority to change the law to allow the Governor to order non-uniform spending reductions up to 10 percent before making even cuts across agencies.

“Governors need the ability to reduce state spending with surgical precision, not a shotgun blast,” Barbour said. “Current law sets a trap: if a governor fails to make necessary cuts, he violates state law and the balanced budget requirements of the state constitution. If a governor truly has to make cuts equally across the board, he would potentially be forced to violate existing court orders and settlements, and to push critical state services to the breaking point.”

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