Ellington

JACKSON — Mississippi tax collections picked up in May but are still lagging as the state enters the final month of its budget year.

Tax collections were about $103 million short of expectations the first 11 months of the year, according to the state Department of Revenue. That's about a 2 percent shortfall.

Republican Gov. Phil Bryant said he doesn't know whether another round of budget cuts will be needed before the year ends June 30. He said cuts could be avoided if the economy improves.

"We are meeting on this almost daily and talking about it," Bryant said Wednesday at the Capitol. "We're looking at it just now what the ending revenues would be."

The governor has already trimmed $65 million from what started as a more than $6 billion spending plan. He headed off deeper cuts by pulling more than $45 million from the rainy day fund and giving that to agencies.

Bryant said he has the authority to use another $4 million from the rainy day fund.

He said a drop in gasoline prices, though helpful to many drivers, could be hurting state tax collections because oil and gas producers are generating less revenue.

Oil severance tax collections were nearly $4.2 million below expectations for the first 11 months of the year, a 17 percent shortfall. Natural gas severance tax collections were nearly $1.2 million below projections, or 25 percent short.

The state also saw a significant drop in corporate income tax collections, which were $54 million below expectations, or nearly 10 percent short. That drop comes after lawmakers phased out the inventory tax.

The state had lackluster tax collections in April partly because budget cuts forced the Department of Revenue to lay off temporary employees who were opening and processing mail just after the deadline for people to file individual income tax returns.

Most state agencies are preparing for tight budgets for the year that begins July 1. The Department of Health, the Department of Mental Health and the Department of Rehabilitation Services are among those that have already announced they are cutting some of their services.