Mississippi Gov. Haley Barbour has ordered another $54.3 million in budget cuts, as 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 2010 budgets trimmed by 5% so far.
“There is no indication that our tax collections will improve anytime soon.” Barbour said. “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 fiscal 2010, actual tax collections were 9.36%, or $172.5 million, below collections for the same period in fiscal 2009.
Mississippi’s budget continues to miss the revenue projections made at the end of fiscal 2009 in preparation for the fiscal 2010 budget, Barbour said.
Current revenue has come in 7.38%, or $136.8 million, below the estimate for the fiscal 2010.
Some agencies and programs will not be affected by this most recent round of budget cuts, including the budgets for debt service, the Mississippi Adequate Education Program and teacher’s certification program, the auditor’s office, the Mississippi Tax Commission, and student financial aid. The budgets of human and rehabilitation services will be partly held harmless from budget cuts to comply with legal settlements.
But Barbour said if revenues continue to decline, Mississippi faces a potential $386 million shortfall in fiscal 2010 and he may be forced to reduce budgets by more than $150 million later in the year.
State law prohibits Barbour from cutting any agency by more than 5% until the budgets of all agencies have been cut 5%, which requires uniform cuts across the board. The restriction could force Barbour to violate the terms of court orders and settlements and make deep cuts to certain agency budgets, he said.
Barbour said he has asked the Legislature for the authority to change the law so that he can order specific budget cuts up to 10% before being required to make uniform budget cuts.