Mississippi remains in a long list of states suffering from the shock of major revenue declines as the recession continues to diminish tax collections related to retail sales, income tax, casino levies, and the travel-tourism industry.
Gov. Barbour, in an official communication from his office on Monday, urged Mississippi’s agencies to monitor all spending because the first month of collections in the 2010 fiscal year shows a drop of $26.2 million in general fund revenue – 11.27 percent below official projections.
All revenue for the month fell $56 million, or 21 percent, compared with collections for July 2008. Barbour said “cuts may be needed in the current fiscal year.”
Mississippi has a $6 billion budget, approved on June 30 for the July 1 start of the fiscal year. The budget includes $523.2 million from the American Recovery and Reinvestment Act – the stimulus package. The stimulus was used to balance Mississippi’s budget, temporarily covering serious revenue shortfalls.
Some states actually are worse off than Mississippi, having failed to adopt timely budgets, and some have drastically trimmed state services and payrolls.
Across the South, the states which are our chief competitors for economic development and quality of life all are suffering high unemployment (many are in double digits, including economic powerhouses like Georgia, North Carolina, South Carolina and Florida).
Mississippi’s June unemployment rate, the latest compiled, was 9.8 percent, reflecting major jumps in jobs losses during the past 18 months. Northeast Mississippi’s rate was even worse – 11.2 percent.
Mississippi cannot spend beyond its means because our constitution prohibits deficits. Spending must be cut or revenues increased when money runs short.
Widespread revenue worries among the states means all states in economic difficulty will redouble efforts to attract new jobs and their related prosperity – and the tax revenues coming with them.
Mississippi will be in the mix, and in the process our cautions must include not cutting services and programs that help guarantee our competitiveness with peer states. The list would include a public education, jobs training, university funding, and transportation.
We also believe the $523.2 million from the federal stimulus in this year’s budget should set a precedent for its acceptance as long as it’s available, and as long as the recession drives the need.
All spending requires cautions, but caution and forethought also must be applied to any refusal of federal stimulus funds that help keep our state competitive.
The goal remains a strong economy with a strong revenue stream, but a recession economy requires unconventional good decisions.