DATE: June 30, 2010
GOVERNOR BARBOUR’S STATEMENT ON THE
END OF THE FISCAL YEAR
“June’s revenue confirms what has been clear throughout the last 12 months: the Fiscal Year 2010 budget spent too much money. State tax commission collections in June, the last month of the fiscal year, were 8.85 percent, or $54 million, below the estimate. All told during FY 2010, the state general fund took in 8.28 percent, or $405.4 million, less than was originally budgeted.
“Because of these shortfalls, I was forced to order spending reductions five times during FY 2010 to ensure Mississippi’s budget remained in balance as required by our Constitution. The cuts I ordered equaled the shortfall anticipated by the Joint Legislative Budget Committee’s revised revenue estimate for FY 2010. I also was forced to reduce spending a year earlier, in FY 2009. Unfortunately, my reductions in FY 2009 were too small, leaving the state with a $20 million shortfall that required the state to use the Rainy Day Fund to close out our books.
“Because of the need to preserve our Rainy Day Fund for use during the next fiscal years, the spending reductions I ordered this year were more cautious. Spending was reduced a total of $466 million in cuts to general fund and non-exempt special fund agencies during FY 2010. Because our revenue collections have not been as bad as was initially feared, initial projections suggest that we will have a final balance of $50 to $60 million.
“These funds will be crucial in preparing the budget for FY 2012 and spending for future years, which I expect to be as financially difficult as we saw in FY 2010 and FY 2009. While preparing the FY 2011 was a difficult process because of declining revenue, FY 2012 will be even more challenging as we will lose hundreds of million dollars in federal stimulus funds. The money from the close of the current year can be used to help balance the budget in the difficult years to come, as we cope with the budget cliff created by the loss of federal funds and weather the effects of the global recession.”