Governor: More cuts coming for state departments & agencies

By Jon Kalahar - email

JACKSON, MS (WLOX) - Every year, the Mississippi Economic Council invites hundreds of the state's business leaders to the capitol to hear from state elected officials concerning the business climate of the state.

In 2007, business owners heard how the state economy was the strongest it had ever been. Just twelve months later, the outlook couldn't be more different.

"I just want you to understand that next week when we announce these cuts, we're going to have to cut into MAEP and Medicaid," said Governor Haley Barbour.

That was the bad news from Governor Haley Barbour, and any good news might be years away. After cutting $42 million from the state budget last November, the continued downturn in state tax collections will require more cuts.

"We told all the departments and agencies, long, long, months ago, be prepared for two to four percent cuts. So a lot of those people have had a two percent cut. Getting another three percent won't be like getting five percent from zero today," said Barbour.

Now the state legislature has the unenviable task of trying to generate a revenue source. Representative George Flaggs has long favored a cigarette tax increase to pay for Medicaid, but now has changed his tune.

"I think the Governor is right, we shouldn't earmark the tobacco tax. We should put it in the general fund and ultimately it will lessen the impact of every budget," said Flaggs.

Still, the House passed a bill Wednesday to restore money cut from the higher education budget by taking money out of the state's $300 million rainy day fund. It's money that, the Governor says, will need to last another two to four years. Senate finance committee chairman Dean Kirby says the state's economy is uncertain at best.

"We don't know where we are,'" said Sen. Kirby.

Governor Barbour says the cuts will be announced next week and will range from $175 million to $310 million.

The Governor says the cuts to Medicaid and the adequate education program will not be more than five percent.