The Revenue Estimating Committee has been watching carefully state tax receipts and national forecasts and, based upon those factors, reported to Governor Barbour and the Legislature a revision in the revenue estimates for both the current year (FY09) and the 2010 fiscal year (FY10). The Legislature is in the midst of appropriating funds for FY10.
On Friday, March 20, 2009, the Revenue Estimating Committee reported that it has revised downward the FY09 projection by $220-million and has revised downward the FY10 projection by approximately $400-million. The cuts to current-year budgets that Governor Barbour made in January were in anticipation of the downward adjustment in the FY09 projection. The revision to the FY10 forecast will, obviously, require that the Legislature take another look at each FY10 appropriations bill to make up for the $400-million difference. Legislators are also considering additional sources of revenue, including an increase in the cigarette tax and a hospital bed tax.
Despite the dismal revenue picture, the outlook for full funding of the Mississippi Adequate Education Program (MAEP) looks good for FY10. Federal stimulus funds are specifically dedicated for education funding, including MAEP specifically, and legislative leaders continue to express their commitment to provide full funding of the formula. We are fortunate to have leaders who understand that our commitment to education must not lapse, even in difficult times. The Legislature is likely to lengthen the session or to adjourn and return in a few weeks in order to give them time to respond to the revised revenue estimate.