While Mississippi did not meet its revenue projections in fiscal 2010, Gov. Haley Barbour last week said the decline wasn’t as much as expected and that the state will have a final balance of $50 million to $60 million.
“June’s revenue confirms what has been clear throughout the last 12 months,” Barbour said in a release. “The fiscal year 2010 budget spent too much money.”
State tax collections in June, the last month of the fiscal year were 8.85%, or $54 million, below the estimate.
For all of fiscal 2010, the general fund took in 8.28%, or $405.4 million less than was originally budgeted.
Barbour ordered spending reductions five times during fiscal 2010 because of revenue shortfalls and to maintain a balanced budget as required by the state’s constitution.
The cuts he ordered equaled the shortfall anticipated by the Joint Legislative Budget Committee’s revised revenue estimate for fiscal 2010. The Republican governor reduced spending in fiscal 2009 as well.
“Unfortunately, my reductions in fiscal 2009 were too small, leaving the state with a $20 million shortfall that required the state to use the rainy-day fund to close out our books,” Barbour said. “Because of the need to preserve our rainy-day fund for use during the next fiscal years, the spending reductions I ordered this year were more cautious.”
Spending was reduced by $466 million to general fund and non-exempt special fund agencies in fiscal 2010. But because revenue collections were not as far off as initially projected, officials expect a final fund balance of up to $60 million.
“These funds will be crucial in preparing the budget for fiscal 2012 and spending for future years, which I expect to be as financially difficult as we saw in fiscal 2010 and 2009,” Barbour said.
He warned that the fiscal 2012 budget will be even more challenging as Mississippi loses hundreds of million dollars in federal stimulus funds, and said the fund balance from the current year can be used to help balance the budget as the state copes with the loss of federal funds.
While Mississippi braces for losses in sales and tourism taxes and oil royalties due to the unprecedented oil crisis in the Gulf of Mexico, Barbour did not mention these potential impacts on the state budget in his end-of-the year message.
