Gov. Haley Barbour struck a cautious tone during the first State of the State address of his second term, telling lawmakers that Mississippi faces tight financial times that reflect the uncertainty of the national economy.

He said legislators will have to make tough and potentially unpopular decisions about the state budget. Medicaid needs millions of dollars to get through the next few months and most state agencies are requesting significant spending increases for the fiscal year that starts July 1.

“It won’t be easy, but we’ll work through our budget issues,” Barbour said Monday night at the Capitol. “We’ll maximize our job creation opportunities despite uncertainty about the national economy. We’ll find answers, get results, make progress for our people and for Mississippi.”

Barbour, a Republican, was re-elected in November and was inaugurated last week for his second four-year term.

During the 35-minute speech in the crowded House chamber, lawmakers interrupted several times to clap. Given Barbour’s serious words about the work ahead, legislators did not give the standing ovations that sometimes turn State of the State addresses into raucous occasions.

Barbour got his loudest applause when he talked about a commission that will study the state tax structure.

“My first four years, we didn’t raise anybody’s taxes. My next four years, I’m committed we’re going to cut some people’s taxes,” Barbour said, adding to the prepared text of his speech.

The study group is set to recommend possible tax revisions by August, which means no changes are expected during the current legislative session that ends in April.

In 2006, large groups of lawmakers pushed to increase the sales tax on cigarettes and decrease the sales tax on groceries. Barbour vetoed the “tax swap” legislation in 2006 and one of his Senate allies blocked it in 2007. Several lawmakers campaigned on promises to cut the state grocery tax, which at 7 percent is the highest in the nation.

Barbour said he will release his budget recommendations later this week, and his plan will include full funding for the Mississippi Adequate Education Program.

MAEP is a complicated formula designed to ensure that each school district receives enough money to meet midlevel accreditation standards. It was put into state law in 1997 and was phased in over five years. It has been fully funded only during the state election years of 2003 and 2007.

Barbour said his budget for the coming year will include a teacher pay raise. He also repeated his call for one of his proposals that died in the House last year — a plan to screen first graders for the reading disorder dyslexia.

Barbour said the state needs to reduce its long-term debt.

“That’s why I will oppose authorizing any new state debt during this session of the Legislature unless it’s related to creating jobs,” he said.

Barbour boasted that Mississippi’s economy has improved since he took office four years ago.

“Personal income has increased by 20 percent these last four years,” Barbour said. “We not only have more people working, but we have been replacing lower-skilled, lower-paying jobs with higher-skilled, higher-paying jobs.”

Barbour’s first term was dominated by Hurricane Katrina, which left a wide swath of destruction across south Mississippi when it struck Aug. 29, 2005. He praised the resilience of people whose homes and businesses were obliterated, but he offered no new details about the recovery.

Rep. Frances Fredericks, D-Gulfport, said she had hoped to hear some specifics about the status of homeowners’ grants to Katrina survivors.

“There was really no explanation on when we’re going to get the money for the elevation of properties,” Fredericks said. “Nothing was made clear. … I was really hoping for more than I received.”

Sen. Lydia Chassaniol, R-Winona, said Barbour offered commonsense ideas about Mississippi’s budget.

“It’s not always going to be sunshine and roses around here,” Chassaniol said.

Freshman Rep. Mark DuVall, D-Mantachie, said he was encouraged to hear that the governor wants to cut taxes.

“I campaigned on the fact that we need to reduce the grocery tax,” DuVall said. “Hopefully, we can get some of that legislation through now.”