The operations of Mississippi state agencies will be put under a microscope this year as lawmakers grapple with shrinking revenue and increasing government costs, Senate Appropriations Chairman Alan Nunnelee said Tuesday.

Nunnelee told his committee the growth of an agency’s constituency base and its performance measures should be scrutinized before considering a budget increase.

“If the same agency is serving more people, then quite reasonably that agency should be spending more money,” Nunnelee said.

The bite of a national recession has left its mark on Mississippi as Gov. Haley Barbour prepares to announce another round of budget cuts on top of the 2 percent reductions he ordered last November.

Nunnelee, R-Tupelo, said the state’s general fund budget has increased by $1.3 billion since 2003. Numerous agencies have asked for additional money to operate in the fiscal year that begins July 1.

“What results are we getting today that we did not get five years ago? That’s the question that businesses around the state are asking as we deal with tough economic times,” Nunnelee said.

Ed Legrand, executive director of the Mississippi Department of Mental Health, said he welcomes lawmakers’ scrutiny of his agency. What they’ll find is that his department has grown rapidly in the last decade.

Legrand said the Legislature has approved two new psychiatric hospitals, seven crisis intervention centers, two specialized treatment facilities and a residential center in Newton.

“Obviously when you increase by 12 new programs, you have increased operating expenses and the majority of our operating expenses are employees,” said Legrand, whose agency employs 8,900.

Legrand said before Barbour’s budget cuts, the agency was seeking an additional $60 million.

Legrand said the first wave of budget reductions forced his agency to scale back by $5.5 million, which meant losing 100 jobs through attrition, reducing grant programs and some operating costs.

“For instance, instead of doing a glossy newsletter, we’re doing everything by e-mail,” he said.

An additional 5 percent budget reduction would lead to the closing of state-funded group homes and early intervention programs.

“When we make additional cuts, we will have to eliminate employment positions and that will affect the services we provide to the mentally ill, the mentally retarded and persons affected by alcohol and drug addictions,” Legrand said.

Rep. George Flaggs, D-Vicksburg, a member of the House Appropriations Committee, said the economic downturn is an opportunity for lawmakers to look at performance-based budgeting.

“I’ve said all along we shouldn’t approve agencies’ requests. They should prove their need,” Flaggs said.