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.