Revenue collections back on downward trend

By Bobby Harrison/NEMS Daily Journal

JACKSON – After a brief reprieve in March, the pattern of dismal state revenue collections resumed in April.
Collections for the month were $45.1 million, or 8.5 percent, below the official estimate that legislators and Gov. Haley Barbour used during the 2009 session to build the budget for the current fiscal year.
Despite the poor showing, it does not appear additional budget cuts will be made.
“April’s collections do not require additional spending reductions at the present time,” the governor said in a prepared statement late Monday.
Barbour already has cut the budget for the current fiscal year $499.1 million, or 9.5 percent for most agencies.
With two months left in the fiscal year, collections are $295.4 million below the fiscal year estimate.
Unless the downturn in collections for May and June is much worse than the current trend, the state actually could end the fiscal year with a surplus because of Barbour’s cuts.
“I think there is a 50-50 chance there will be a lapse of more than $100 million,” said Sen. Hob Bryan, D-Amory, who has been critical of the amount cut from the budget by Barbour.
For the year, tax collections are 7.7 percent below the estimate and 6 percent, or $226.7 million, below the amount collection through April of last year.
The March tax collections were 1.4 percent, or $6 million, above the estimate.
Before March, the state had gone 18 months without meeting the revenue estimate and 15 months collecting less that it did a year ago during the same month.
Barbour said April’s collections “confirm what we have known all along – the deep global recession continues to affect our state’s revenue, and it may take years for collections to fully return to pre-recessionary levels.”
While April’s collections were $45 million below the estimate, the state did collect about $7 million more revenue than in April 2009.
The cuts this year have resulted in some furloughs of state employees and a reorganization at the campuses of the eight universities, resulting in layoffs. Numerous school districts have announced staff reductions, including teachers, for the upcoming fiscal year.

Contact Bobby Harrison at (601) 353-3119 or bobby.harrison@djournal.com.