Budget Cuts Loom Over State Agencies/ Education Could See Biggest Cuts

Governor Haley Barbour will hold a news conference today to announce major decisions regarding the state budget for FY 2010. MPB's Lawayne Childrey reports.

Even though state revenue is showing signs of improvement it does not necessarily mean Governor Haley Barbour can avoid budget cuts. In fact the Governor has already indicated that cuts may come in two's again this year.

Barbour: Well I did last year, I had budget cuts twice before the Legislature could really deal with the issues. The longer you delay the cuts, the more difficult it is for the departments and agencies to make the cuts.

Barbour has said he won't make any decision until he has met with the state treasurer and tax commissioner. But he said last week that education could be among the first services to lose money. House Education Chairman, Representative Cecil Brown is worried the progress made in education funding could be stifled.

Brown: I hope that don't have to have any cuts. I hope if we do have cuts, that education, public safety will be priorities. I'm sure they will be. And that we won't permanently damage the education system that we have. We've made great advances in education in the last several years. And I would hope that we will be able to continue that.

In this tough economic climate, Barbour's challenge is to find ways to improve revenue. But according to State Economist Dr. Phil Pepper raising taxes, especially income taxes could create a possible backlash effect on business.

Dr. Pepper: There's been resistance to raising income tax, because our income tax rate is tied to the corporate income tax rate. And if you start raising income taxes, then corporate income taxes are raised, and we'll see less activity from corporations in the state.

Many state agencies have anticipated a 5% budget cut, but it is possible the Governor will increase that figure to keep the state budget in balance. For MPB News, I'm Lawayne Childrey.