While national economic indicators are improving slightly, Mississippi’s state budget situation is not.
Gov. Haley Barbour said this week that state tax collections again fell short of estimates, another $28.5 million short for the month of October. Since the fiscal year began July 1, that shortfall is $111.7 million. Tax collections are down about 7.5 percent.
Those figures have ominous meanings for the short and long term as state fiscal leaders began trying to map a course for getting Mississippi through the recession.
The continuing shortfalls indicate that the worst could be yet to come. As is the case nationally, consumers are spending less, which impacts the state’s primary revenue source: sales taxes. Unemployment and cuts in government, which is a major economic force in the state, impact that spending.
Barbour has already made budget cuts for the current fiscal year and has indicated more will be coming. Agencies that previously were exempted – Corrections, Medicaid, Rehabilitation Services and Human Services – now likely will have to take cuts as well. Education already has been cut 5 percent and now school leaders are preparing for another round.