Gov. Haley Barbour on Monday urged Mississippi agencies to closely monitor expenditures as general fund collections in July were $26.2 million, or 11.27%, below estimates. Actual collections for the month fell $56 million, or 21%, compared to July 2008.

“State tax collections in July were much lower than anticipated,” Barbour said in a release. “We cannot ignore the fact that revenues continue to fall below our expectations. State agencies must spend tax dollars responsibly and keep in mind that cuts may be needed in the current fiscal year.”

In fiscal 2009, falling collections caused $200 million to be cut from the $5.6 billion budget.

The Legislature approved a $6 billion budget for the fiscal 2010, which began July 1. The budget includes $523.2 million from the American Recovery and Reinvestment Act.

State economists have warned that revenue may fall below expectations through fiscal 2012.

“The effects of the current recession will continue to impact the state budget in the months and years to come,” Barbour said. “Mississippi faces serious budget problems. State agencies will have to live within their means while we keep a balanced, conservative budget intact.”

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