ATLANTA -- Mississippi is scrambling to impose last-minute spending cuts of almost $35 million -- or about 2% of its $2 billion budget -- to close fiscal year 1991 in the black, the state's finance director said yesterday.
With revenues from some taxes sagging, the cuts are necessary for the state to avoid ending the fiscal year on Sunday with a general fund deficit, said Edward Ranck, executive director of the department of finance and administration. Mr. Ranck estimated that by June 30 the state will have accumulated a revenue deficit of about $105 million.
Gov. Ray Mabus has already cut about $60 million in spending and drawn down the state's $16 million rainy-day fund to cover the revenue shortfall.
Most of the cuts will come from funds earmarked for education, the state official said, with $29.5 million of spending for school programs to be deferred until fiscal 1992.
The remaining savings will come from departments that have already informally cut spending by about $6 million and will now have their budgets officially capped to free up funds, he said.
"There is absolutely no doubt we will balance our budget, but there will be no margin for error," he said. "I will stop processing checks if I have to."
The state's revenue shortfall is the result of disappointing collections of sales and corporate income taxes, Mr. Ranck said. But individuals' income tax collections, he noted, have held fairly strong. "I think what really happened is that we finally talked ourselves into a recession this spring," he said.
This month's shortfall will total about $12 million, on top of an approximately $94 million revenue gap calculated at the end of May, Mississippi's finance director said.
Mr. Ranck said that the state's $16 million rainy-day fund will not be replenished at the beginning of fiscal 1992. "That will have to wait until we begin a fiscal year with a cash surplus," he said.
However, the state's working cash fund of $38.6 million, which had also been drawn down, will be replenished this week, he said.
The state official said that he does not expect Mississippi to have a revenue shortfall in fiscal 1992. "We have taken very conservative growth assumptions for the next year, and I think the economy in the state is finally beginning to pick up, particularly in corporate income tax collections," he said.
But the budget for fiscal 1992, which is $18 million below the $2.02 billion budgeted for the current fiscal year, will mean some painful cuts, particularly in education.
Earlier this year, state legislators rejected any new taxes for fiscal 1992. In March, the state's House of Representatives overwhelmingly defeated a bill that would have raised $200 million in fiscal 1992 through a one-cent increase in the state's six-cent sales taxes. The House's 97-to-27 vote rejection followed Senate approval of a smaller revenue bill that would have raised $114 million.
Mr. Ranck said the only bond program the state plans in the near future is a $20 million to $30 million lease-purchase financing planned for sometime this fall. Proceeds will be used for equipment and building programs.
Mississippi's general obligation debt is rated Aa by Moody's Investors Service and AA-minus by Standard & Poor's Corp. The state currently has about $466.3 million of general obligation debt outstanding.