Mississippi will be impacted by federal efforts to cut spending, and state legislators will need to use caution and spend responsibly to keep the state’s finances heading in the right direction, Lt. Gov. Delbert Hosemann said Monday.

 

The state Legislature is expected to head back to Jackson within the next few weeks for a special session after ending the 2025 Legislative Session without passing a state budget. Hosemann said talks with House leadership are ongoing and progress is being made, but this year’s budget is particularly difficult to develop.

 

“It’s a difficult budget this year for two reasons. One, the positive part, which is we have been exceptionally productive,” he said.

 

The state is paying down its debt, cut both income and grocery taxes, reducing the size of government and increasing pay for teachers, he said. All of those, while good for Mississippians, add complexity to the budgeting process.

 

Legislators must also factor in federal spending cuts and the impact they will have on Mississippi. Hosemann said roughly half of the state’s funding comes from the federal government, and any programs impacted by the reduction in federal spending must either be made whole through other means or ended. More than 350 AmeriCorps workers have been laid off in Vicksburg due to the cuts, he said, and several positions at Mississippi State University have also been affected. In total, approximately $350 to $390 million in federal funds has been frozen throughout the state.

 

“So we have challenges and we need to recognize, I think, and be prudent and conservative about next year,” he said. “And so that involves us getting started now because our budget is from July 1 to June 30, 2026, and during that period, I anticipate DOGE and the President and the rest of them are going to cut money from Mississippi. So we are going to have to be frugal in our own. We need to keep our budget pretty close to what it was last time.”

 

Federal reductions need to be accounted for as legislators get to work developing the budget and spending kept at sensible levels, Hosemann said. That means funding the state government first and potentially reducing or eliminating the number of special projects the Legislature steers money to each year, he said.

 

In Meridian and Lauderdale County, the Legislature has invested some $42 million in project money, Hosemann said, including $250,000 for The Mississippi Arts + Entertainment Experience, $8 million for Lauderdale County School District’s Career and Technical Education facility, funding for Meridian Main Street, road projects on Grand Avenue and 34th Street and more. These investments are good for the community, and the Legislature is happy to provide funds when it can, he said, but less assistance for cities and counties throughout the state may be needed to weather the coming cuts.

 

“Now, with the obvious occurring, has already occurred, $350 million worth of it, obviously we’re not going to be able to do projects for everybody. We’re going to have to tighten our belts here,” he said. “And I think Mississippians will understand that.”

 

In prioritizing expenses, paying state employees and maintaining assets such as roads, state owned buildings and other properties, come first, Hosemann said. After that comes spending to make the government as effective as possible, he said, followed by paying down debt. Once those core responsibilities have been handled, any remaining funds can be put toward local projects.

 

“We’re hopeful that we may have to hold a year here and maybe get back into where we do projects later, but the first thing is to make sure that the state does its obligations on highway patrol, security, paying its employees, keeping its buildings up and running the government, the judiciary and everything else,” he said.

 

While federal spending cuts pose more problems for Mississippians, Hosemann said he understands why they are being made. With the national debt topping $36 trillion, and a spending deficit of more than $1 trillion for this budget year alone, the current path simply isn’t sustainable, he said.

 

“I knew sooner or later we’d have a president who would have to say, ‘You know, maybe we ought to have a balanced budget,’” he said. “We haven’t had one since Clinton, and I got one now. I’ve got a president who recognizes that the economy of this country could not be sustainable over the next decades doing what we’re doing.”