As of Oct. 31, revenue collections for the state of Mississippi were $35.3 million below estimates.
State law requires the governor to balance the budget when collections do not meet estimates.
Musgrove has asked agencies to hold back five percent of their budgets in anticipation of possible cuts.
Revenue collections have been below projections for the last two years.
State fiscal officer Gary Anderson said educational programs, including the universities, junior colleges and public schools, were spared from the cuts.
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