JACKSON – Gov. Haley Barbour slashed an additional $54.3 million out of the state budget for the current fiscal year Thursday, but stressed that the cuts are not nearly enough to deal with the current slowdown in tax collections.
“There is no indication that our tax collections will improve anytime soon,” said Barbour in a prepared statement. “Therefore, I do not believe this is the last time I will have to reduce state spending this (fiscal) year.”
Barbour, who announced the cuts during a news conference from his Sillers Building office, said he is cutting by 5 percent every agency that he did not cut in September.
His cuts then took nearly $172 million from the budget, including $158.2 million from education from the kindergarten through university level.
On Thursday, he trimmed an additional $5.7 million out of education in areas that did not sustain the full 5 percent cut in September. He had cut the Adequate Education Program, which provides the basics of operating the local school districts, by 5 percent in September.
When state tax collections come in at a rate lower than what is needed to fund the budget, the governor is required by law to make cuts. But he cannot cut any agency more than 5 percent before he reduces all agencies 5 percent.
The agencies being cut 5 percent Thursday include Medicaid, the judiciary, the Department of Mental Health and many smaller agencies.
Barbour said the cuts of $19.2 million in Medicaid will not take effect until February and will be reflected in reimbursement rates to health care providers. Frances Rullan, a spokesman for Medicaid, said the goal is not to make cuts to beneficiaries.
Barbour said the agencies he cut Thursday – unlike those cut in September – already were reduced 5-7 percent from the amount they received last year in the original budget passed by the Legislature.
That means some agencies will be receiving as much as 12 percent less than they received last year.
Treasurer Tate Reeves said his budget will be at the level it was in fiscal year 2004. He said he already was dealing with the cuts by not replacing two vacant positions and by eliminating some part-time posts.
“Inevitably, there will be jobs lost,” Barbour predicted.
State employee layoffs are even more likely because Barbour estimated that an additional $150 million in cuts will have to be made during the final six months of the fiscal year if the current sluggish trend in tax collections continues.
For the first five months of the fiscal year, tax collections are below projections by $136.8 million, or 7.4 percent.
Because of limitations placed on his ability to cut by state law, Barbour said he cannot make additional reductions unless the Legislature changes the law. On Thursday, Barbour urged legislators to make that change quickly when they convene in January or to make the cuts themselves.
“Governors need the ability to reduce state spending with surgical precision, not a shotgun blast,” he said.
Legislators, especially House Democrats, have voiced reluctance to giving the governor additional authority to make cuts.
“I don’t want to give him a blank check,” said House Appropriations Committee Chair Johnny Stringer, D-Montrose.
“I know what he would do is just cut education.”
Barbour has not cut the fund that pays the state’s debt service, or the funds to pay for lawsuit settlements. He also cut Corrections by only 1 percent and did not reduce the enhanced pay going to the nationally board certified teachers.
He also did not cut agencies that are funded by special fees or assessments.
Bobby Harrison/NEMS Daily Journal