GULFPORT, MS (WLOX) - Governor Haley Barbour says the state is bracing for some serious financial challenges ahead.
During his speech to the Gulf Coast Business Council on Wednesday, the governor said Mississippi is likely headed for a $300,000,000 revenue shortfall this year. And the next two years could be even worse.
Part of the governor's plea to spend the remaining Katrina relief dollars and create thousands of new jobs is because the national recession is creating a "very serious" budget problem for the State of Mississippi.
"But we've got a new issue facing us and that is that we're in a deep recession. And it's going to get worse," Governor Barbour told his audience.
Hastening the pace of Katrina recovery was the governor's primary mission in this address to community leaders. But he pulled no punches in sharing a dismal state financial forecast.
"The state revenue is going to be somewhere between 240 and 265 million dollars less than we estimated last year. And most of that drop off is in the second half of the year," he said.
Governor Barbour told the Gulf Coast Business Council the national recession began to impact state finances last fall, when revenue dropped in November. Since then, it's quickly spiraled downward.
"I think we should anticipate that these last four months of the fiscal year, March through June, that revenue is going to be considerably worse than it was the first half of the year," said Governor Barbour.
The governor also cautioned that once the national economy begins to recover, the state's finances will lag behind.
"For state governments, and this is almost uniform, the worst year for state revenue is the year after the recession ends," he said.
That's why he warns that the state will likely be facing a "very serious budget problem" in 2011.
"Certainly what we need to prepare for. My motto is very simple: Pray for the best, but prepare for the worst," says Governor Barbour.
Again, that dismal projection for state finances is another reason Governor Barbour urged South Mississippi leaders to get busy spending those Katrina relief dollars. Those hurricane-related projects can create new jobs and give our communities a welcome boost in this struggling economy.