- Associated Press - Wednesday, April 20, 2016

JACKSON, Miss. (AP) - Mississippi Gov. Phil Bryant on Wednesday made his second round of state spending cuts since the current budget year started July 1, with revenue continuing to fall short of expectations in a sluggish economy.

“We knew it was going to be tough all along,” Bryant told reporters at the Capitol as legislators were trying to wrap up their session.

The shortfall is $35 million in what started as a fiscal 2016 spending plan that topped $6 billion. Bryant said he is cutting $25 million and covering the rest of the gap by taking $10 million out of the rainy day fund so it can be spent.

The cuts amount to less than one-half of 1 percent of spending for the year that ends June 30, and Bryant said only a few programs are exempt. Veterans’ affairs, the state Military Department, student loans, vocational and technical education and schools for the blind and deaf won’t be cut.

Bryant made 1.5 percent budget cuts in January, trimming $39.8 million in spending and taking $35.2 million from the rainy day fund. K-12 education was exempt from the first round of cuts, but will lose money in the latest reductions, he said.

This is the first year Bryant has had to make budget cuts since he took office in January 2012, and the dip in revenue happened after legislators cut some taxes in recent years. His predecessor, Republican Haley Barbour, had to make substantial cuts when revenues sputtered during the Great Recession.

Bryant also said Tuesday that he expects to call a special session in June or later to allocate $110 million the state will receive from the BP oil spill settlement. He said he wants the money to be spent on Gulf Coast recovery and tourism projects.

Bryant also said he’s still deciding whether he will sign Senate Bill 2858 (https://bit.ly/1QI7AdY ), which eventually would reduce taxes by $415 million a year.

The plan would phase out Mississippi’s $260 million-a-year corporate franchise tax, which has long been a goal of manufacturers, bankers and other business groups. It would cut $145 million in income taxes, raising the threshold for paying state income taxes to $10,000. Anyone making that much would get a $150-a-year cut. Those reductions would begin in 2018. The state would lower taxes on self-employment, cutting $10.2 million over three years beginning in 2017.

“I would have much preferred a larger review of the tax codes - both how we go about collecting it, what the exemptions are and then what the reductions may be,” Bryant said Wednesday. “As I said during my State of the State address, corporations and businesses have benefited quite some time from a very good structure, tax structure, in the state of Mississippi. If we’re going to cut taxes, we need to look at the working class, blue-collar families of this state.”

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Follow Emily Wagster Pettus on Twitter: https://twitter.com/EWagsterPettus .


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