Louisiana budget shortfall could still top $50 million
BATON ROUGE - Tax bills were rushed through in such frenzy in the final minutes of the special legislative session that the governor, lawmakers and their financial advisers were still trying Thursday to sift through the implications.
This year's budget could be out of balance anywhere from $30 million to more than $50 million. But that figure remained unclear as the Legislature's fiscal analysts tallied up estimates of how much the sales tax increases passed in the session's closing minutes would raise.
"It's hard for us to get a real fix on what the shortfall will be," Senate Finance Chairman Eric LaFleur, D-Ville Platte, said even as he asked lawmakers to support the final budget rebalancing bill Wednesday evening.
Gov. John Bel Edwards' administration and lawmakers are negotiating with the chemical industry, trying to end a lawsuit pending against the state - and to release more than $20 million-plus in taxes paid under protest, to help whittle away this year's remaining shortfall. However, Edwards spokesman Richard Carbo said no deal had been reached yet.
One thing seems more certain: lawmakers fell far short of balancing next year's budget. The gap for the 2016-17 fiscal year that begins July 1 is estimated at as much as $800 million.
"We're trying to piece that together, but it'll be some drastic, drastic cuts," said Senate President John Alario, R-Westwego.
Lawmakers meet in a regular session that begins Monday, but they're limited in how they might be able to lessen those cuts because they can't consider taxes in that three-month session. Legislative leaders and the Democratic governor said a second special session might be needed to stop the threat of deep slashing to health care programs for the poor and disabled and for public college campuses.
"I don't see any other way," said Sen. J.P. Morrell, D-New Orleans. He said even if the tax measures raise more money than the conservative estimates that were predicted, "we're still hundreds of millions of dollars from where we need to be."
But first, the Edwards administration and lawmakers need to make sure all the pieces used to rebalance this year's budget - and close a gap that at one point was estimated to top $900 million - fall into place by June 30.
The rebalancing plan assumes $200 million in Gulf oil spill recovery money will be paid to the state in the next three months. But the settlement deal that contains the money hasn't been received. Another $82 million used to plug budget holes this year hinges on a refinancing of the state's bond debt, which must be approved by the State Bond Commission.
Assuming those items happen as projected, Edwards and legislative leaders cited figures of a $30 million remaining gap.
However, that assumed nearly $24 million in account balances across state government would be used to fill budget holes. The bill containing that maneuver never received final passage in the hectic last minutes of the special session.
That means the true gap for this year's budget could top $50 million.
Decisions for how to close that shortfall would need to happen quickly, with only three months remaining in the fiscal year.