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Sunday, October 22, 2017



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Louisiana's budget deficit from last year pegged at $117M

Louisiana's budget deficit from last year pegged at $117M

BATON ROUGE, La. (AP) — Louisiana closed the books on the last budget year with a $117 million deficit, Gov. Bobby Jindal's administration told lawmakers Friday, the first time the administration has put a price tag on the problem.

The deficit from the 2014-15 fiscal year was driven partially by higher-than-expected use of tax refunds and credits and anticipated fund transfers that weren't available to plug budget holes. The gap must be closed within eight months, before the current budget year ends.

Announcement of the deficit's size by Barry Dusse, director of the governor's Office of Planning and Budget, adds to a long string of state budget woes, and it comes as Jindal is running the GOP presidential nomination and pitching himself as a strong manager of Louisiana's finances. At a debate this week, Jindal described the state budget as balanced.

The Jindal administration notified legislative leaders in September that the state wrapped up the budget year that ended June 30 in the red. But it waited until the required notification to the Legislature's joint budget committee to publicly release the deficit figure.

There was little discussion about the deficit from lawmakers, who have struggled through years of budget shortfalls.

Creating a large part of the gap, administration officials have said, were people and businesses cashing in on more tax refunds and credits than anticipated, particularly in the film tax credit program.

Lawmakers enacted a new cap on the film tax credits in the current budget year to help close a massive shortfall and protect public colleges and health care services from steep cuts. A maximum of $180 million in film tax credits can be cashed in annually. The cap kicked in July 1 and expires after three years.

Administration officials have said people appeared to file for film credits earlier than usual to ensure they could use them.

Auditors will comb through the deficit figure, and a final number is not expected until January.

Jindal is term-limited and could leave the deficit problem to a new governor who takes office in January. But Dusse told the Joint Legislative Committee on the Budget that the Jindal administration will work on a plan to address the deficit before exiting office.

The governor enacted partial hiring and spending freezes earlier in this year's $25 billion budget that could help close the gap left from last year. House and Senate financial analysts also have been working with state agency leaders on options for cutting spending.

The deficit is one in a list of budget problems.

Shortfalls have emerged in this year's budget in the state's free TOPS college tuition program and Medicaid program. Also, the oil price slump is expected to force cuts to address lower-than-expected severance tax and mineral royalty collections.

Louisiana has faced repeated budget shortfalls during Jindal's two terms in office, a combination of the economic downturn and the cost of tax breaks that have siphoned more dollars away from the state treasury than expected.
Rather than match state spending to income, the governor and lawmakers have raided savings accounts, sold property and used other short-term fixes to patch together budgets. But that creates new gaps each year.

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