Governor Makes Further Cuts to FY 2010 budget

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

million.

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.

Attachments:

* letter to State Fiscal Officer, Kevin Upchurch, regarding budget cuts * a list of the agencies affected by the cuts.

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