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Barbour cuts additional $54 million from budget

December 3rd, 2009 No comments

To the surprise of nobody, the major announcement Gov. Haley Barbour had for the FY2010 budget this afternoon was that he was reducing it by $54 million.

This is the second time Barbour has had to trim spending since the fiscal year started July 1. In September, he slashed $172 million, mostly on education. Today’s announcement brings the total amount of cuts for FY2010 to $224 million.

Today’s action hit agencies that already had built-in cuts from FY2009 to FY2010. Those agencies were exempt from the September cuts. State law does not allow Barbour to cut any agency more than 5 percent until every agency has been cut at least 5 percent, so the agencies that escaped in September fell under the axe today.

They include the Division of Medicaid, which Barbour cut by 5 percent, or $19.2 million. The Department of Corrections, which was held harmless in September, was cut 1 percent ($3.2 million). Aside from corrections, debt service and court-ordered portions of the Department of Rehabilatation Services, the Department of Human Services and the Ayers settlement, the state’s higher education budget is the only agency that hasn’t been cut by 5 percent, but it’s close, at 4.7 percent.

Barbour was quick to warn this would not be the last time he has to adjust the budget. Because the total deficit for FY2010, according to revenue estimate the Joint Legislative Budget Committee adopted in November, is expected to reach $386 million, an additional $160 million in cuts will be necessary before the fiscal year ends June 30.

“It is clear that state revenue will not recover by the end of this fiscal year,” he said.

Mississippi’s revenue has fallen short of estimates for 15 consecutive months. In November, collections were 6.88 percent, or $24.8 million, under projections. For the first five months of the fiscal year, they are 7.3 percent, or $136.8 million, short.

Categories: Haley Barbour, News, Politics, State revenue Tags:

Barbour sharpening his axe

December 3rd, 2009 No comments

Gov. Haley Barbour will hold a news conference this afternoon to, according to a press release from his office, announce “major decisions” regarding the state’s budget.

That’s pretty easy to translate. “Major decision” means “more cuts” to the state’s budget that has already had $172 million trimmed from it in September.

November’s revenue came in 6.88 percent, or about $24.8 million, under estimates. For the fiscal  year that started almost exactly five months ago, revenue is $136.6 million shy of where revenue experts thought it would be. If that pace holds until next June 30, the nearly $330 million deficit will be right in line with what Barbour said he thought it would be when he made the first round of cuts in September.

Barbour will share the particulars at 2 p.m. Magnolia Marketplace will have the details shortly thereafter.

Categories: Haley Barbour, News, Politics, State revenue Tags:

Northrop Grumman/EADS drops a bombshell in tanker bid

December 1st, 2009 No comments

Magnolia Marketplace was about to call it a day when a Google alert caught our attention.

Several national media outlets are reporting that Northrop Grumman/EADS is threatening to pull out of the competition with Boeing for a $35 billion contract to supply the U.S. Air Force with a new fleet of refueling tanker planes.

In a letter with today’s date on it, Northrop Grumman President and COO Wes Bush told the Pentagon that the company believes the request for proposals basically rigs the competition to the point that it would be almost impossible for Boeing not to win it.

Obviously, if today’s threat became reality, it would be met with a healthy amount of disappointment in the Gulf Coast’s aerospace corridor, and more specifically, Jackson County in Mississippi, where Northrop Grumman’s shipbuilding division is located.

The leaders of the multi-state aerospace alliance that was launched recently, Gov. Haley Barbour among them, made it plain that their first priority was helping Northrop Grumman/EADS win the tanker contract.

Details of Bush’s letter can be read here.

Revenue down — again — in November

December 1st, 2009 No comments

For the 15th straight month, Mississippi’s tax revenue collections have been less than what estimates said they would be.

Numbers released today by the Mississippi State Tax Commission show that November’s revenue is 6.88 percent, or $24.8 million, below projections. For the first five months of FY2010, which started July 1, revenue is $136.6 million short of where the state’s financial experts thought it would be. That’s a 7.38 percent shortfall. If that pace holds, the total deficit for FY2010 will come in a shade under $330 million.

Gov. Haley Barbour has already cut $172 million out of this year’s budget. More cuts are a guarantee. In a statement released this afternoon, Barbour called them “unavoidable” and reiterated that the budget for FY2011 will look nothing like budgets of fiscal years past.

Categories: Haley Barbour, News, Politics, State revenue Tags:

Barbour speaks from across the world

November 10th, 2009 No comments

Gov. Haley Barbour just finished a conference call with reporters, but the big news is where he was sitting while he was speaking: Baghdad.

Barbour was in Iraq visiting soldiers in the Mississippi National Guard’s 155th Armored Brigade as part of a Veterans Day excursion. He couldn’t divulge many details of his trip, per Defense Department Policy.

Anyway, Barbour’s executive budget recommendation is due to the Joint Legislative Budget Committee Monday, the particulars of which dominated much of the 25-minute chat.

Barbour said last week that an additional $200 million in cuts would be necessary to FY10′s budget because of declining tax revenue. Barbour trimmed $172 million — mostly from education — from the budget in September.

“This budget recommendation will be anything but business as usual,” said Barbour, reciting a line he has used often when describing the state’s fiscal situation. “It will include some dramatic ways to restructure (state agencies and government) but it will not be Draconian. We’re not gutting anything. We are going to push very hard to be sure we’re spending on our priorities.”

Barbour did not provide any specifics, but did offer that some of the things he will propose will not save a huge amount of money until FY12, which starts July 1, 2011.

The state’s revenue estimating group told members of the JLBC last week that FY10′s total shortfall will reach $370 million, which is about $20 million more than Barbour’s high-end estimate he made in announcing the September cuts.

Barbour predicted, based on information from the revenue estimating group, that FY11′s total shortfall could exceed $700 million, which is why his budget recommendation due Monday will be a financial shell of those he’s presented in the past, he said. Contributing mightily to that deficit is the state’s Medicaid program, which will lose $200 million starting Jan. 1, 2011, in a combination of decreased federal match money and increased costs. Several hundred million dollars’ worth of stimulus money will also be gone by then.

“We may have to find another $500 million to $600 million in 2012 over and above what we have to find for this year and for FY11,” Barbour said. “We’re going to have to make more big savings (in FY12) even if revenue keeps dropping,” Barbour said.

On a lighter note, Barbour spoke at length about some of the soldiers he’s rubbed elbows with since he arrived in Iraq earlier this week after visiting with wounded Mississippi soldiers at Walter Reed Army Hospital Monday in Washington.

“This warrior mentality that they have is so strong and when one compares it to the liberal media elite or some people in Washington, it has a very powerful effect on me to see these very brave, very strong, very good people,” he said.

Categories: Haley Barbour, News, Politics, State revenue Tags:

Party switching, number crunching (and special sessioning?)

November 5th, 2009 No comments

After the press conference where seven Simpson County politicos announced that they preferred Elephants to Donkeys, Magnolia Marketplace and a few other media outlets got a few minutes to ask Gov. Haley Barbour some questions.

I’m sure he was thrilled.

Anyway, Barbour reported nothing new about the will-there-or-won’t-there surrounding the special session to deal with incentives for an advanced manufacturing company, presumably a German maker of steel pipes, to build a $300 million facility and create 500 jobs in the Delta, presumably Tunica County.

Barbour did not reveal the name of the company. He did say that it was dealing with “an external issue” that was not related to the agreement between it and the state. He did not elaborate.

“They’re making progress,” he said of the company. “We’re not going to call a special session until that’s fully resolved. I don’t see any problem. I don’t think it’s going to be very long.”

With October’s revenue almost 7 percent below estimates, Barbour will be forced to cut the FY10 budget a second time pretty soon. He is meeting with the Joint Legislative Budget Committee this afternoon, where the JLBC is expected to present a revenue estimate for the remainder of FY10, which ends June 30, 2010.

“There’s no question in my mind that we’re going to need at least $200 million more in reductions in spending this fiscal year,” said Barbour, who cut $172 million from the budget in September.

Making that an even more difficult task, Barbour said, is the state law that says no agency’s budget can be cut more than 5 percent until every agency has been cut at least 5 percent.

“We will continue to have to make significant cuts.”

Budgets notwithstanding, this has been a pretty good week for Barbour. He’s the chairman of the Republican Governors Association, and the GOP won two pretty important gubernatorial races Tuesday in Virginia and New Jersey. President Barack Obama carried both those states – New Jersey by 15 percent – last November.

Barbour compared Tuesday’s elections to those of 1993, in which New Jersey and Virginia both elected GOP chief executives. Those races, Barbour said today, served as a springboard to the 1994 Contract with America, in which Republicans took control of both houses of Congress for the first time in 40 years. Barbour was chairman of the Republican National Committee at the time.

“In the same way, I believe these elections the day before yesterday, where Republicans won and won handily, shows that the American people are not happy with the policies that (Obama’s) administration is pursuing,” Barbour said. “They think there’s too much spending and too much debt.”

Speaking of presidential politics, a reporter from a Jackson television station asked Barbour if he harbored any plans to run for president in 2012, a question Barbour gets often. He responded that he was focused on next year’s Congressional races, in which Republicans will try to party like it’s 1994.

When the reporter pressed him on his gameplan as far as running for the White House, Barbour said he “had no plan to,” which is a long way from slamming the door on the possibility.


Special session may be off for good

November 3rd, 2009 No comments

Rumors are swirling this morning that the German manufacturer of steel pipes that wants to build a $300 million facility, and create 500 jobs, in Tunica is having trouble securing financing.

Separate sources in the House and Senate have said it was their understanding that there would be no special session any time soon, if ever, to deal with incentives for the company, whose name has not been officially released by Gov. Haley Barbour’s office. Barbour announced two weeks ago that there would be a special session last week but those plans were put on hold. Barbour said in announcing the postponement that the hang-up was not related to the deal between the company and the state.

Barbour spokesman Dan Turner had no comment this morning.

October revenue numbers well below estimates

November 2nd, 2009 No comments

It’s appropriate that Halloween was two days ago, because the state’s revenue collections for October that were released just a few minutes ago are frightening.

Per Kathy Waterbury of the Mississippi State Tax Commission:

• The MSTC collected $390 million in October, which is $27.8 million below the estimate made just before the Legislature adjourned the 2009 session in late June. Advancing the Halloween theme, that represents a shortfall of 6.66 percent.

• For the first four months of fiscal  year 2010, revenue is 7.42 percent short of estimates, for a total shortfall of $105.2 million. Spread out over the entire fiscal year, that would put the state short about $315 million by the time FY11 start next July 1. That number is right in the middle of Gov. Haley Barbour’s $275 million to $350 million estimate he made when he announced budget cuts in September.

As has been the case in prior months, sales tax revenue and individual income tax revenue led the downward spiral, Waterbury said.

Magnolia Marketplace will be at the monthly meeting of the Stennis Capitol Press Corps at lunch today. Ole Miss Chancellor Dr. Dan Jones is the speaker. It will be interesting to see what he says about his institution’s budget situation as it relates to today’s revenue news. We’ll have the details as soon as they’re available.

No special session this week? (Updated)

October 28th, 2009 No comments

Magnolia Marketplace just got off the phone with one lawmaker who doesn’t plan to be in Jackson Friday for a special session to deal with a manufacturer who plans to build a facility in the Delta. According to speculation, a German maker of steel pipes would like to build a $300 million plant in Tunica, creating 500 jobs.

Gov. Haley Barbour announced last week at the Mississippi Economic Council’s Hobnob that he would call legislators to Jackson this week to offer the company a state-backed incentive package. Barbour has said state incentives would represent no more than 10 percent of the total cost of the project.

“That is correct,” said one lawmaker, who requested anonymity, when asked if the special session had been delayed. “The deal isn’t dead. They’re still trying to make it work, but it won’t be in time for anything to happen this week.” The lawmaker added the hold-up did not originate from the state or county level, but from the company.

Barbour spokesman Dan Turner would not comment.

Updated at 12:03 p.m. : A source who had just been briefed on the situation said it was a “coin flip” as to whether there would be a special session Friday.

Updated again at 1:12 p.m. : Barbour has just released a statement confirming that there will be no special session this week. In the statement, Barbour said the issue was not between the state and the company. Here is the full text of his statement:

The Special Session planned for Friday, October 30, has been postponed due to a technical issue unrelated to the proposed agreement between the company and the State.

“The company needs additional time to complete its preparations for executing the project, and we expect to call the Legislature in for a brief Special Session as soon as these preparations are complete.

“It is this Administration’s policy not to present projects to the Legislature until all details are finalized, even if the unresolved point is not between the company and the state.”

Barbour confirms special session for next week

October 21st, 2009 15 comments

Gov. Haley Barbour confirmed at the Mississippi Economic Council’s Hobnob this morning that he will call lawmakers to Jackson for a special session late next week to deal with an economic development project in the Delta. The project, Barbour said, is a $300 million advanced manufacturing deal that will crete 500 jobs. He didn’t offer any other details.

Obviously, the first thing that leaped to Magnolia Marketplace’s mind was GreenTech, the Chinese start-up that wants to build hybrid cars in Tunica. The job count or the cost Barbour announced doesn’t match, though. GreenTech’s first phase will cost $1 billion, according to the company, and create 1,500 jobs.

Speculation after Barbour’s announcement centered around some sort of steel manufacturing facility. Really, without somebody coming out and saying it, it will be hard to tell exactly what Barbour has up his sleeve. But Magnolia Marketplace is sure going to try to find out.

Updated at 1:02 p.m. : Just wrapped up a conversation with a source who requested anonymity, and who said that all signs point toward an automotive-related project in Tunica, but not GreenTech. Rather, the source said, an auto parts manufacturer is planning to set up shop. There were no details available as to the name of the company or if it was affiliated with either of the state’s current automotive manufacturers, Nissan or Toyota.