JACKSON – With Mississippi tax collections plummeting and budget shortfalls of $500 million or more expected for the next two years, legislative leaders and Gov. Haley Barbour say they are considering dramatic changes in funding state government.

The first glimpse of those possible changes will occur Monday afternoon when Gov. Haley Barbour releases his budget proposal to be considered during the 2010 legislative session, which begins in January.

But other groups also are working on innovative ways to deal with the state’s budget woes.

At the behest of Barbour, Lt. Gov. Phil Bryant is heading the Commission for a New Mississippi, a group that include Mississippians such as former Netscape Chief Executive Officer Jim Barksdale and former U.S. Agriculture Secretary Mike Espy.

The commission, said Bryant, is charged with developing ways to improve “efficiency and effectiveness of state government, including strategic planning, performance-based budgeting and the creation of a performance review agency from existing legislative resources.”

Its report is expected later this month.

“Some of those recommendations may not be the most politically popular,” Bryant said, “but for real reform in state government, we have to innovate and think differently. Especially in these difficult economic times, we can’t just do things the way they’ve always been done because, after all, the funds used by state government are the people’s money, not the government’s.”.

Barbour said recently that he would recommend “some dramatic ways to restructure.”

Some speculate that the governor will include both school district consolidation and university mergers as part of his budget proposal. He also reportedly might recommend some state agency consolidation.

Because of the state’s dire fiscal predicament and because Barbour has hinted at recommendations of significant change, this is probably the most anticipated budget proposal ever released by a Mississippi governor.

What is unknown is whether the changes proposed by Barbour or by the Commission for a New Mississippi can make it through the legislative process.

Rep. Cecil Brown, D-Jackson, a key member of the House Appropriations Committee, said House leaders, led by Speaker Billy McCoy, D-Rienzi, and Appropriations Chair Johnny Stringer, D-Montose, also are looking for ways to save money.

Brown estimated that maybe $25 million could be saved through such reorganization efforts.

“I think there is some money to be saved, but not enough to solve our budget problems,” he said, adding that he is not saying that looking for ways to reorganize is a bad idea.

He said that if it saves money and improves government services, he would consider it.

In the late 1980s, the Legislature, at the behest of then-Gov. Ray Mabus, reduced the number of state agencies. Brown, as a member of Mabus’ staff, was involved in that effort.

Several agencies and commissions were merged into what is now a massive Department of Human Services that administers welfare and food stamps and oversees children’s services, among other things.

Plus, several agencies and commissions were merged to form the Department of Finance and Administration, which provides functions such as administering the state’s payroll and overseeing state buildings.

It has never been determined whether those efforts saved money. At the time, the focus was on improving efficiency.

Brown said it might come to the point where choices have to be made. For instance, he said, people want to receive their state tax returns as quickly as possible, but money could be saved by not hiring the additional employees to speed up the process.

“Most agency heads don’t see part of their job as saving money,” Brown said. “They see their job as providing a service as best they can…I’m not saying they are trying to waste money, but they are looking to provide a service” and additional money helps.

In the coming weeks and months, legislators and Barbour will see one of their primary jobs as saving funds. The trick will be reaching a consensus on how to do that, while retaining state services as well.

“It is not easy,” Brown said.

Watch for coverage of Barbour's recommendations here at NEMS360.com later today.