December 3, 2009
GOVERNOR BARBOUR MAKES FURTHER CUTS TO FY 2010 STATE BUDGET
Revenues continue to fall requiring adjustment to spending plan Governor Haley Barbour today announced $54.3 million in budget cuts made necessary because state revenue projections have persistently outpaced actual collections.
Combined with the $170 million in budget cuts Governor Barbour ordered
in September, most state agencies now have had their Fiscal Year 2010
budgets trimmed by 5 percent – so far. “One of my top priorities is keeping Mississippi on solid financial ground,” Governor Barbour. “Our budget situation is tough like every other state’s fiscal outlook. There is no indication that our tax collections will improve anytime soon. 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 FY 2010, actual tax collections were 9.36 percent, or $172.5 million, below collections for the same period in FY 2009. Mississippi’s budget continues to miss the revenue projections made at the end of FY 2009. So far in the current budget year, state revenues have come in 7.38 percent, or $136.8 million, below the estimate for the FY 2010.
“Our taxpayers deserve the very best, most effective, and most
efficient services the state can offer within the confines of
available revenues and the requirements of a balanced budget. We must
deliver no less,” Governor Barbour said.
Some agencies and programs will not be affected by this round of cuts.
These include the Mississippi Adequate Education Program, Office of
the Auditor, the Mississippi Tax Commission, National Board
Certification program for teachers, Chickasaw Interest, the Ayers
settlement, debt service and student financial aid. The budgets of the
Departments of Human Services and Rehabilitation Services partially
will be held harmless to comply with legal settlements. The Department
of Corrections will receive a 1 percent reduction totaling $3.2
Assuming revenues continue to decline, Mississippi faces a potential
$386 million shortfall in FY 2010. Even with these two rounds of
budget cuts, Governor Barbour likely will be forced to reduce budgets
by more than $150 million later in the fiscal year.
The Governor is statutorily prohibited from cutting any agency by more
than 5 percent until spending for all agencies has been cut 5 percent.
This requires uniform cuts across the board. In order to achieve
additional savings in FY 2010 under current law, Governor Barbour may
be forced to reduce National Board Certification, potentially violate
the terms of court orders and settlements, and make deep cuts to
agencies that have taken on additional responsibilities with no
additional funding. He has asked the Legislature for the authority to
change the law to allow the Governor to order non-uniform spending
reductions up to 10 percent before making even cuts across agencies.
“Governors need the ability to reduce state spending with surgical
precision, not a shotgun blast,”
Governor Barbour said. “Current law sets a trap: if a governor fails
to make necessary cuts, he violates state law and the balanced budget
requirements of the state constitution. If a governor truly has to
make cuts equally across the board, he would potentially be forced to
violate existing court orders and settlements, and to push critical
state services to the breaking point.”
The Governor must trim spending as mandated by Mississippi Code
§27-104-13, which requires the State Fiscal Officer to balance the
budget when state revenue falls below estimates for the fiscal year.