JACKSON, Miss. — Haley Barbour recently projected a bleak future for the State of Mississippi. He reveald his Executive Budget Recommendation for Fiscal Year 2010. “This is my sixth budget recommendation, but it is my first during a period of declining state revenue,” he said. “Indeed, because of the severe shortfall earlier this month, I was required to make budget cuts of some $42 million for the current fiscal year, FY09 [which ends July 30, 2009].”
Barbour predicted additional revenue shortfalls before the end of this fiscal year, with more cuts perhaps during FY09.
Accordingly, he contended: “This is going to be a hard budget year. We need to be prudent, and conservative, and recognize that this is going to affect us for the next four years.”
Barbour continued his comments: “Considering the contraction of many other nations’ economies, there is every reason to expect this recession will not be as brief or shallow as were those of 1990-91 and 2000-01; rather it is prudent to anticipate and prepare for a longer, deeper economic retrenchment, [such as that from 1970-1982].”
Though the governor stated that he was “praying for the best,” he warned that Mississippians should be preparing “for the worst.” In what he referred to as a realistic Executive Budget Recommendation for Fiscal Year 2010, he favored full funding to include the following: (1) a $60.8 million increase in funding for the Mississippi Adequate Education Program; (2) the Legislature should enact a provider fee system to fund a $90 million shortfall in the Medicaid program, or face deep cuts; (3) [in adherence to the Governor’s Tax Study Commission’s recommendation] spend $15 million to upgrade technology at the Mississippi State Tax Commission, which will help the agency recover unpaid taxes; and (4) provide $1.5 million to establish a Mississippi Health Insurance Exchange, which allows small businesses that do not offer employee-sponsored health insurance to provide coverage for workers.
Additionally, the governor indicated that based upon a Tax Study Commission he created earlier in the year, the recommendation calls for a tobacco tax increase of 24 cents per pack, thereby increasing Mississippi’s cigarette tax to 42 cents per pack. He then noted that the tax increase equates to that of Alabama, Arkansas, Louisiana, and Tennessee.
Of smokeless tobacco, Barbour explained: “There is an increase in revenue…by converting it to a volume-based tax like cigarettes.” The tobacco increases, Barbour hastened, “would generate some $80 million in additional revenue in FY10, and, if passed early in the Regular Session, about $13 million this fiscal year.”
Claiming to be committed to a net tax cut as proper budget policy, Barbour explained that tax increases are not driven by budget policy, but by health care policy. Thus, “this term I will propose tax cuts in greater amounts than these increases.”
On another note, Barbour expressed his opposition to the federal government bailing out the auto industry. He said, “I don’t think it will never stop, and the steel industry is right behind [it].” He added that such a move would affect the Southern automobile industry. A stimulus package, like auto, would be bad in that it’s just a “one time cost.”
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