JACKSON – Gov. Haley Barbour urged conservatism in budgeting for next year on Tuesday, saying lawmakers should be careful not to be deceived by tax-revenue projections that may be overstated because of Hurricane Katrina payments.

If possible, he said, they should resume contributing to a &#8220rainy-day fund” of 2 percent of the state’s annual tax revenue, which has been spent in recent years.

Barbour, in a press conference, declined to say what he would do today, the deadline for him to act on a tax shift approved by lawmakers to make cigarettes cost more and groceries cost less.

Instead, as the Legislature prepared to shift more of its focus on setting a spending plan for the fiscal year that begins July 1, the governor offered his ideas. This year’s regular session is scheduled to end in three weeks.

The Joint Legislative Budget Committee met today and adopted a revised budget estimate that is nearly $226 million more than the previous estimate, a 5.1 percent jump over the current budget.

The JLBC also revised the budget estimate for the rest of fiscal year 2006, increasing it by $248 million, an 11 percent jump over last year.

Barbour said it was good to see state income rising instead of falling in the wake of devastation inflicted by Hurricane Katrina on Aug. 29, but urged caution.

&#8220The possible one-time nature of much of the increased revenue causes uncertainty about future collections,” Barbour said.

In the six months since, Mississippians received about $9 billion in one-time payments from insurance companies and the federal government, Barbour said. If they spent one-third of that money on durable goods, that would account for an increase in sales-tax collections of $210 million.

Barbour also elaborated on his veto of a bill that would have allowed the spending of the 2-percent annual set-aside during the next two years.

&#8220While it is quite possible part of this revenue growth is the result of a flood of one-time money in the form of insurance, (federal) and other payments, the possibility also exists that revenue collections will be sufficient to reinstitute the extremely positive practice of setting aside 2 percent of revenue in a ‘rainy-day fund,’” Barbour said.

Barbour also listed five other goals he said the Legislature should have for next year’s budget, including increased funding for education at all levels and enacting minimum across-the-board pay-raises for state employees of $1,200 each.

Among other expenses for which the Legislature must budget are state matching funds for payments from the Federal Emergency Management Agency, for which the state has already received a bill for $55.4 million, he said.

A &#8220revenue-neutral” tax swap was initiated by Lt. Gov. Amy Tuck in January. The plan would increase the cost of a pack of cigarettes by 80 cents initially, and eventually a dollar. Sales taxes on groceries would be halved on July 1 and eventually eliminated. The first swap bill was vetoed and the second addressed Barbour’s complaint that it shortchanged municipalities. Too, Barbour has opposed all proposals to increase state taxes.

Mississippi has the third-lowest cigarette tax in the country, 18 cents per pack, and one of the highest grocery taxes, 7 percent.

A Medicaid crunch has been avoided this year by a post-Katrina federal appropriation.

&#8220At the end of January, the Congress provided $2 billion for Mississippi, Alabama and Louisiana for health-care costs, a portion of which should save Mississippi hundreds of millions of dollars in state Medicaid costs,” Barbour said, adding that the state government is still working to make those funds available.

When they become available, all savings on those health-care costs should be set aside in a state fund called the Disaster Trust Fund to pay the state’s match for FEMA funds, Barbour said.

&#8220But until these funds become available we will need to continue to use the state’s line of credit or our ‘rainy-day fund,’ which is another important reason why we should have the goal of replenishing this account by setting aside 2 percent of general-fund revenues,” Barbour said.