FY 2010 Revenue in Under Estimate, FY 2011 Appropriations Further Reduce Budget

July 2nd, 2010

All but one month in Fiscal Year (FY) 2010 saw revenue collections come in under estimate. In total, general fund revenue came in close to $400 million under the estimate used to create the FY 2010 budget.

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FY 2010 Mississippi General Fund Collections, Actual, and Estimate

FMAP

*preliminary data

As a result of below-estimate revenue collections, nearly $500 million was cut from the state budget in FY 2010. Some examples of the trickle-down effect of budget cuts include increased class sizes and decreased teacher training. Both universities and community colleges approved tuition increases, and the Mississippi Department of Mental Health has cut services for caregivers. Other state workers are experiencing furloughs, decreased pay, or the loss of jobs altogether, meaning fewer front-line persons to manage Mississippi’s public structures.

Unfortunately, while the economy struggles to recover, the budget is not expected to get better any time soon. General fund appropriations for FY 2011 are $369 million lower than FY 2010 appropriations. The expiration of stimulus funds will also hurt the state budget over the next couple of years.

One of the best short-term opportunities for Mississippi is state fiscal relief. A measure currently under debate in the Congress would extend aid to the states for Medicaid. If approved, Mississippi would receive $151 million in federal funds that would provide $110 million for current budget needs.

Long term, a balanced approach that includes raising state revenue is needed to protect the state’s investment in vital services like education and workforce development. These investments have been threatened by successive rounds of budget cuts and remain vital to the state’s economic recovery.

Source:

MEPC analysis of data from the Mississippi Department of Revenue Monthly Transfers FY 2010 and data from the Office of the Governor, June 30, 2010.