JACKSON, Miss. (AP) — Gov. Haley Barbour and key lawmakers have set a “cautiously prudent” revenue estimate for the next budget year, citing predictions that the state’s economy will lag behind any national recovery.
Barbour and the Joint Legislative Budget Committee, which met on Tuesday, also revised the revenue estimate for the current fiscal year, increasing it by $46 million.
Officials were acting on the recommendations of a committee led by state economist Darrin Webb, who says it will take years to fully recover economic ground lost during the recession.
The fiscal year 2012 budget estimate is nearly $4.6 billion, a 1.3 percent increase over the current year. The fiscal year begins next July 1.
Barbour said he was reluctantly agreeing with the recommendation, which Webb described as “cautiously prudent.” The estimate will help guide lawmakers as they begin work on how to divide state revenue among agencies for the budget year that begins July 1.
“It may technically be a recovery, but you don’t have anything on Main Street, Mississippi that feels like a recovery,” said the Republican governor, who participated in the meeting by teleconference.
Webb said evidence signaling the end of the national recession included an expansion of the U.S. gross domestic product over the last five quarters and the Institute for Supply Management index that shows manufacturing activity has been expanding for the last 15 months.
Still, Mississippi lost 74,700 jobs between February 2008 and September 2010. Webb said if the state maintained a 1.4 percent growth rate in employment over the next several years, it would be 2015 before all jobs lost would be recovered.
“We’ve dug a very deep hole,” Webb said.
Several of the state’s agencies are operating with bare-bone budgets after the state has experienced declining revenue over the past few years.
Rep. Cecil Brown, D-Jackson, said revising the current year’s budget will free up money for agencies that might run deficits. He said the rest could carry forward.
The slightly higher revenue estimate for next budget year isn’t expected to result in many agencies or programs receiving significant budget increases. Several were propped up this year with stimulus dollars — money that won’t be available in fiscal year 2012.
“I think it’s going to be tough,” said House Speaker Billy McCoy, D-Rienzi. “Priorities will take place. What will come out of the final process, I couldn’t tell you.”
However, lawmakers will have an extra $55 million to work with during the 2011 session that starts in January. Barbour said the money will come from a disaster recovery fund created after Hurricane Katrina.
The federal government appropriated funds for the state’s Medicaid program, which freed up millions in state dollars, Brown said. Initially, the disaster fund was to be used as match money for federal funding. Barbour said Tuesday about $55 million won’t be needed for that purpose.
The budget committee will continue meeting this week as it works on a spending proposal to present to the full Legislature. Barbour is expected to release his budget proposal in December.
SHELIA BYRD / The Associated Press