While Webb said the state most likely is in recovery from the worst economic downturn since World War II, “we are very weak, probably behind the nation.”
The 14-member Legislative Budget Committee heard a report from Webb and other state financial experts at the conclusion of four days of meetings with agency heads.
The Budget Committee, which includes Speaker Billy McCoy, D-Rienzi, and Republican Lt. Gov. Phil Bryant, who presides over the Senate, will use the information gathered this week in developing a budget recommendation later this year for the 2011 Legislature.
Webb told the committee that between the fall of 2008 and now the state has lost 78,000 jobs, or 6.6 percent of total employment. The current level of employment – about 1 million workers – is equivalent to the level of 1996.
He said it might take as long as 2015 to regain those jobs and even that projection might be an overly optimistic estimate.
“We have dug a very deep hole that it will take us a long time to get out of,” Webb said.
The information is important to legislators on two levels – first, the overall health of the state’s economy, and, second, the revenue picture as it relates to the amount of money that will be available to appropriate.
During the past two years, the Legislature and governor have struggled with an unprecedented drop in state tax collections. The Legislature expects another difficult budgeting process during the 2011 session.
Ed Morgan, executive director of the Department of Revenue, told the committee that for the first two months of the current fiscal year, tax collections are $18.7 million, or 3.3 percent, above the estimate.
While that is good news, Morgan said it is too early to call it a trend, though he did say “we are certainly encouraged.”
While the economy remains vulnerable, Webb predicted that the state, like the nation, would continue to have slow growth. At one point, he referred to it as “painfully slow economic growth.”
But, Webb warned, some national economic forecasters have put the chance of a setback or “a double-dip recession” at about 25 percent.
Through Thursday, Morgan said, tax collections for the month are about $19 million ahead of the pace for last September. While that is good news, he said, the trend could slow or reverse itself during the final days of the month.
During the week of the budget hearings, the committee heard requests from agency heads totaling $1.3 billion more than what was appropriated last year.
“If you look at the number of things we have got to fund,” Bryant said at one point, “we are about out of money already.”
Contact Bobby Harrison at (601) 353-3119 or firstname.lastname@example.org.