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November 16, 2009

GOVERNOR BARBOUR PRESENTS FY 2011 EXECUTIVE BUDGET RECOMMENDATION

Shrinking revenues call for transformative government, cautious spending

Governor Haley Barbour today proposed a 12 percent budget reduction for most state agencies and called for the merger of some state agencies, universities and school districts in his Executive Budget Recommendation for Fiscal Year 2011.

The $5.5 billion state budget includes $370 million in stimulus funds that will cease after the coming fiscal year, which begins July 1. Governor Barbour is required by state law to submit a budget to the Legislature.

"About this time last year, state revenues started showing the effects of the recession," Governor Barbour said. "What we're seeing now is the full brunt of a soft economy, and state government must react accordingly. Clearly, business as usual won't keep essential services operating, and it won't work for the taxpayers. This budget crisis is real, and we cannot delay making difficult, long-term budget decisions.

"The October 2009 figures mark 14 consecutive months where we have missed our revenue estimate and the 11th consecutive month in which the state actually collected less money compared to the previous year.  My first four years revenue exceeded the estimate every year, but now revenue is coming in far below the estimate made just a few months ago.  So we must be prudent and conservative."

The Governor's budget recommendation for Fiscal Year 2011 relies heavily on six main principles and funds state government accordingly:

  • The most urgent need in Mississippi is to create more and better jobs.  Where an agency plays a significant role in enhancing our job creation efforts, it is reflected in Governor Barbour’s recommended funding for that agency.
  • The same is true of revenue collection.  Raising taxes during an economic downturn slows recovery and puts an unfair burden on Mississippi's taxpayers, but we cannot let tax cheats deprive the state of revenue it is owed already.  Governor Barbour proposes increasing the budget of the Tax Commission, so it can hire additional auditors to collect money the state is already owed. 
  • Government's first function is ensuring the public’s safety.  While nearly all agencies must experience spending reductions, Governor Barbour is recommending that law enforcement programs or budgets take less of a spending reduction so they can continue their vital service of protecting Mississippi families.
  • Education is Mississippi's No. 1 economic development issue and No. 1 quality of life issue, and we must identify significant cost-savings that don’t diminish educational opportunities for our children.  Now is the time to reduce administrative costs and for local districts to use their "rainy day funds" just as the state is drawing down on its Rainy Day Fund.  Restructuring that will save money in 2012 and beyond must begin now.
  • The State of Mississippi must establish budget priorities, invest in state government entities that generate revenue, and streamline government by seeking efficiencies and savings, while allowing maximum flexibility for agency heads.  Governor Barbour is recommending several specific actions that can be taken by areas of state government to improve efficiencies, and I believe there are many others where savings can be achieved if management is allowed to accomplish this.  It is necessary to adopt these proposals for FY 2011 to fully realize the savings by FY 2012 when available funds continue to plummet.
  • Although Medicaid is an entitlement program, it is imperative that this agency achieve real cost-savings, along with the rest of state government.  However, without certain changes in state law, Medicaid’s hands will be tied as to making substantial cost-savings to the current program. It's time to allow Medicaid to achieve spending reductions without harming the quality of services provided to our citizens.

To view Governor Barbour's budget proposal, click here.
To view Governor Barbour's letter to legislators, click here.