Barbour: Miss. agencies might need to trim budgets

Published 11:08 pm Saturday, October 11, 2008

Gov. Haley Barbour is telling agencies they should prepare to trim their spending if the tumultuous national economy continues to drag down state tax collections.

“Just as Mississippi families and businesses are revising their budgets and looking for ways to save money, we in state government must tighten our belts, too,” Barbour said in a statement Friday. “High fuel costs and lower-than-expected tax collections mean we must further control our spending.”

State Tax Commission records show Mississippi revenues were 2.3 percent behind estimates for the first quarter of the fiscal year, from July 1 through Sept. 30.

Barbour, a Republican, wants state agencies to be ready to cut spending by 2 percent before the fiscal year ends June 30.

Barbour is not ordering any immediate cuts. Spokesman Pete Smith said the governor is simply trying to make agency directors and legislators aware that Mississippi’s economy could be adversely affected by the national economic problems in coming months.

The general fund — the largest part of the state budget — is about $5.5 billion. This is where cuts would be made.

State lawmakers are getting set to write a budget for the next fiscal year, and Barbour is asking agencies to trim 4 percent from their spending requests.

Officials say first-quarter revenues were $24.8 million behind because corporate tax collections fell short.

Businesses in parts of Mississippi, Louisiana and Texas were given extensions to file their taxes because of hurricanes Gustav and Ike. Mississippi officials say there could be uncertainty about corporate collections until early January, when the filing extension ends.

House Speaker Billy McCoy, D-Rienzi, often disagrees with Barbour on spending and public policy, but in a telephone interview Friday, McCoy said Barbour is “probably doing the right thing” by urging caution with state spending.

“The budget process we have allows us to look at review a reasonable period of time ahead of a problem and allows us to adjust to it,” McCoy said. “We have all kinds of safeguards.”

Barbour has not had to order across-the-board budget cuts since he took office in January 2004. The state has rebuilt its financial reserves the past four years.