State revenues for July fall short
Published 12:11 am Wednesday, August 5, 2009
JACKSON (AP) — Mississippi tax collections fell significantly short of expectations in the first month of the budget year, and Gov. Haley Barbour is urging government departments to be cautious with their spending.
‘‘Mississippi faces serious budget problems. State agencies will have to live within their means while we keep a balanced, conservative budget intact,’’ Barbour, a Republican, said in a written statement this week.
Marianne Hill, senior state economist and editor of the Mississippi Economic Review and Outlook, said Tuesday that tax collections were ‘‘worse than we were expecting, especially given that there is some good news out there nationally.’’
Hill said the federal ‘‘cash-for-clunkers’’ program is increasing car sales across the country. The program provides financial incentives for people to trade in gas-guzzling vehicles for more efficient models.
Hill said an increase in car sales might be reflected in Mississippi’s tax collections for August — figures that will be released a month from now.
Barbour said Mississippi’s revenues in July fell nearly 11.3 percent short of what experts had predicted. That’s a shortage of $26.2 million for the first month of the state fiscal year.
The year-to-year comparisons look even worse.
State tax collections in July 2009 fell $56 million below where they were in July 2008. That’s nearly a 22 percent decrease.
Legislators struggled to write the budget because the recession has made tax collections difficult to predict.
House Speaker Billy McCoy, D-Rienzi, said Tuesday he agrees with Barbour’s assessment that agencies should closely watch their spending, especially while the economy is shaky.
‘‘We just don’t know really how this is going to play out,’’ McCoy said.
Still, McCoy said that based on conversations he has had with business people across Mississippi, he believes economic activity is slowly increasing.
‘‘I believe that things overall are beginning to move forward some,’’ McCoy said. ‘‘Maybe I’m being overly optimistic.’’