UPDATE: Gov says 'dismal' revenues mean more cuts likely

JACKSON — Mississippi’s tax collections fell 10 percent short of expectations in September, and Republican Gov. Haley Barbour said more budget cuts are coming in the remaining nine months of the fiscal year.

“These dismal facts reinforce what I said earlier,” Barbour, on a business trip in Asia, said in a written statement. “It is likely that more spending cuts will be necessary in this fiscal year to ensure a balanced state budget. The fact that state law will not permit me to cut any agency more than 5 percent until every agency is cut at least 5 percent may present some additional challenges.”

The State Tax Commission said Thursday that for the first three months of the fiscal year, revenues were 7.7 percent below where experts thought they’d be. That’s a shortage of $77.4 million for the first quarter. The biggest portion of that shortfall — $44.9 million — was in September.

Mississippi’s tax collections have now fallen below projections 13 months in a row. Senate Appropriations Committee Chairman Alan Nunnelee, R-Tupelo, called the trend “alarming.”

“(September) was the worst month of this fiscal year,” Nunnelee said. “As a businessman, it tells me that we haven’t hit bottom yet.”

Citing the lagging revenues, Barbour sliced nearly $172 million, or about 2.9 percent, from the $6 billion annual budget in early September. Most of the money was taken from education.

Barbour has told state agencies repeatedly that the economy could continue to struggle for years.

State economist Phil Pepper told lawmakers last week that Mississippi has fewer people employed now than it did in 1997.

“The consumer has little to make him want to go out and spend money,” Pepper said.

The Tax Commission said the state collected $40.5 million less this September than it did in September 2008. The figures include sales, income and other types of taxes.

Top lawmakers already are starting to map out a budget for the fiscal year that begins next July 1, and they’ve warned agency chiefs that money will be tight.

House Appropriations Committee Chairman Johnny Stringer, D-Montrose, said the latest tax-collection figures show that some state programs need to be eliminated.

“I hate to see us keep cutting good programs across the board, where good programs become mediocre,” Stringer said Thursday.

He said, for example, that the state can’t afford to keep separate campuses for its residential high schools where students have to be academically or artistically talented. The Mississippi School for Math and Science is on the campus of Mississippi University for Women in Columbus. The Mississippi School of the Arts is about 200 miles to the south, in Brookhaven.

Earlier this year, Stringer proposed moving the arts school to MUW, but the House defeated his plan after Brookhaven civic leaders lobbied to keep the arts school.

Emily Wagster Pettus/The Associated Press