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Sunday, June 16, 2019

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Louisiana budget gap gets a new, lower number: $648 million

Louisiana budget gap gets a new, lower number: $648 million

Number smaller but still a sizable gap

BATON ROUGE, La. (AP) — Louisiana's budget shortfall dropped Thursday to $648 million, an improvement from previous estimates but still a sizable gap that threatens health and education programs with steep spending reductions.

The state income forecasting panel revised revenue projections for the upcoming budget year that begins July 1, accounting for expected tax collection improvements, largely tied to the federal tax overhaul passed by Congress.

Action by the Revenue Estimating Conference gives lawmakers trying to craft next year's spending plans the official numbers they'll use — and the depth of the state financing cuts they'll have to make to keep things in balance.

The House Appropriations Committee will unveil its budget proposal Monday, with plans for the full House to consider the measure three days later.

Whatever emerges from the committee will look better than the worst-case-scenario spending plan released by Gov. John Bel Edwards in January, when the numbers were worse and the budget hole was larger.

House Speaker Taylor Barras said the revised shortfall figure is "still significant."

Barras, a Republican, said a "high priority for lots of folks" in the House is trying to spare public colleges and the TOPS tuition program from cuts. That would leave health services to take the brunt of any slashing, since higher education and health care are the least protected areas of the budget.

The Democratic governor disagreed with that approach, instead proposing that TOPS financing be reduced by about 60 percent in next year's budget so more dollars can be spread to health care and public safety programs.

Legislative leaders and Edwards have raised questions about whether lawmakers would support a budget with steep cuts, but Barras said he thinks it's possible to get enough House votes for a spending plan that makes the reductions.

The shortfall is caused by expiring temporary taxes.

A special session called by Edwards earlier this year failed to raise any money to close the gap. Lawmakers can't consider taxes in the current regular session. Edwards wants another special session starting in mid-May to consider replacement taxes, but some Republican lawmakers want to balance the budget without passing the taxes the governor is seeking.

Edwards said in a statement that the forecast changes "will certainly help to soften the cuts from the fiscal cliff in a number of important areas. However, this does not change the need to replace a portion, not all, of the expiring revenue in order to adequately fund critical priorities around the state."

Without replacement taxes, the governor said cuts would damage education, health and public safety programs.

Barras wouldn't commit Thursday to a second special session, saying he wants to review "what truly is out there in revenue," both the dollars included in the latest forecast update and other money that could be raised through pending legislation.

"There are some members that do feel strongly that maybe a (special) session wouldn't be necessary and that they could live with the cuts," he said. But he added that "there's another large portion of our body" worried about large reductions to spending.

Before Thursday's changes, the budget gap had been officially estimated at $994 million. The forecasting panel lessened the hole by $346 million, with most of the improvements coming from the federal tax overhaul, which is expected to boost the state's individual income tax collections.

Most of the revisions had been expected, though the bottom line is slightly better than anticipated.

Louisiana also has $146 million in unspent cash from the current financial year. Edwards doesn't support using those dollars to help plug gaps in next year's budget, saying that would be a gimmick equivalent to using a one-time windfall to pay for a monthly debt.


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