BATON ROUGE, La. (AP) — Louisiana's budget woes are
even worse than the incoming administration of Gov.-elect John Bel Edwards had
anticipated, with an estimated shortfall of up to $750 million that must be
closed by the end of June, a top aide to Edwards warned Wednesday.
Jay Dardenne, Edwards' chief fiscal adviser, told
reporters that the incoming administration hasn't settled on a plan for fixing
the problems with the current fiscal year's $25 billion budget. But he said
Edwards hasn't ruled out tax increases, which would need legislative approval.
"All the options are on the table for
everything," Dardenne said during his first media briefing since Edwards
picked him to serve as commissioner of the Division of Administration.
Dardenne said the outlook for the current fiscal year
"is more dire than we thought it was" due to new revenue estimates
that show a continuing drop in oil prices and a slump in collections from
corporate income taxes and sales taxes. He also said the Edwards administration
projects a total estimated shortfall of $1.9 billion for the next fiscal year,
which starts in July.
"This is the clear view, the true picture of
where we are today. It is not pretty. It is not sugarcoated. It's just the
facts," Dardenne said.
Edwards, a Democrat who won the runoff election for
governor in November, will be sworn into office Jan. 11. He inherits the
state's budget problems from Gov. Bobby Jindal, a Republican who mounted a
failed presidential bid during his second term. Jindal refused to support anything
he considered a net tax increase and leaned on short-term budget fixes.
Dardenne said Edwards is committed to ending the
state's "over-usage of one-time revenue and budget gimmicks that have been
used to balance this budget."
"We're blowing away the smoke and breaking the
mirrors regarding the state budget," he said. "We're committed to
stabilizing the budget and structurally changing the way Louisiana handles its
budgetary obligations to our citizens."
In a statement Wednesday, Jindal maintained that the
state budget is balanced, "like it has been every year for eight years in
"Raising taxes would be an easy way for
government to be flush with money again, but we have always believed and
continue to believe that raising taxes is the wrong approach for our
economy," Jindal said.
In a letter to lawmakers on Wednesday, Dardenne said
the latest economic performance estimates, which include November figures, show
state tax collections coming in up to $450 million less than projected on top
of $300 million in spending gaps for existing programs for the current fiscal
year. Those two figures combined add up to a total shortfall of up to $750
"I don't have any explanation for why November
was so dramatic, but it was. And those numbers have come in, and it's been
shocking to us to see the degree of shortfall in expected corporate income tax,
the decline in sales tax revenue and the steady reduction in the price of
oil," Dardenne told reporters.
Among the existing programs that have spending gaps are
the state's TOPS free college tuition program and the Medicaid program, which
provides health care for the elderly and disabled.
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Posted on Thu, December 31, 2015
by MICHAEL KUNZELMAN, Associated Press