Barbour Slashes $54.3M in Second Round of Budget Cuts

December 4, 2009

Gov. Haley Barbour is whittling another $54.3 million from the state budget as revenues continue to fall, but Mississippi’s remaining $160 million shortfall likely will be addressed in January after the legislative session begins.

"When the Legislature spent more money than we had, it falls on the governor to make the savings, which I do," he said.
Barbour i s making his second round of budget cuts since July 1. The cuts, coupled with those in September, amount to $226.3 million. He cut $200 million the previous fiscal year.
Many state agencies are now nearly 10 percent below their funding for last year.
"When you start talking about double-digit cuts, it’s very difficult," Barbour said.
Mississippi last month finished below revenue estimates for the 15th-consecutive month. Overall, revenues since July 1 are $136.8 million below estimates, and officials expect the budget will see at least a $368 million shortfall by the end of fiscal 2010.
"There is no indication that our tax collections will improve anytime soon," Barbour said. "Even after the cuts today, we need an additional $160-plus million in savings this year in order to have a balanced budget."
But Barbour said he has made all of the cuts he can under state law, and it will be up to lawmakers to grant him the authority to make further cuts or make the cuts on their own.
"I hope the Legislature – as soon as they come back – will decide how to reduce spending," he said. "The sooner these cuts are made, the easier it is to live with them."
Education budgets, including school districts, community colleges and universities, were trimmed 5 percent during Barbour’s first round of cuts in September.
The cuts Thursday include a 5 percent reduction to most agencies and programs, including Medicaid, which will take the hit in February.
Barbour said he allowed the delay in order to give physicians and other providers time to adjust to the decrease in state payments.
Medicaid spokesman Francis Rullan said beneficiaries should not be worried that services will suffer, though.

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"We’ve been here before," he said. "We know what we’re doing."

The state has run afoul in previous efforts to cut Medicaid costs. Last month, the state Supreme Court ruled Medicaid officials should have asked the Legislature for approval before tinkering with a law that would change reimbursements for pharmacists.
The court upheld a chancery judge’s ruling that Medicaid had no authority to change how pharmacists were paid to fill prescriptions for people enrolled in the program.
Pharmacies sued Medicaid in 2008, saying state law gives the Legislature sole authority to change the reimbursement plan.
The Supreme Court agreed, ruling, "This court will not allow the plain language of the law to be swept away in the interest of cost containment."
Mississippi Emergency Management Agency director Mike Womack said he already had been bracing for a cut.
"This was not unexpected," he said of the $76,279 trimmed from MEMA’s budget.
He said he plans to adjust by continuing a hiring freeze, limiting travel and delaying purchases.
"We’re just doing the same belt tightening that other agencies are doing and that families across the state are doing right now," Womack said.
Barbour noted some agencies were exempt from the cuts because he does not have the authority to cut beyond 5 percent anyway.
Those left without cuts include the state auditor’s office, State Tax Commission, national board certification program for teachers, debt service and state lawsuit payments.
The Mississippi Department of Corrections was cut 1 percent – about $3.2 million.
MDOC Commissioner Chris Epps said he has been working since the summer to cut back. Already, the department has limited travel and has implemented a hiring freeze, he said.
MDOC will cut overtime pay for employees and evaluate housing options for inmates.
"We’re also going to continue to utilize good bed management," Epps said.
That means, evaluating those that can be put on house arrest or parole and whether people should be taken out of maximum security – which is the costliest for corrections.
"We’re not going to jeopardize public safety," Epps said.
Last month, Barbour came out with a budget proposal for the coming fiscal year that includes some reorganization of state agencies.
"The fact is, we’re required to keep a balanced budget," he said. "You can’t continue to keep cutting back and back – you have to start changing the way you do business."