Louisiana News

Louisiana state government's revenue projected to dip more than $1 billion

(The Center Square) – State lawmakers on Monday reduced the state’s revenue forecast for next fiscal year by more than $1 billion, which will require legislators to cut spending to create a balanced budget.
The combined impact of the COVID-19 pandemic and low oil prices on state finances is similar to that of the Hurricane Katrina disaster in 2005, but without the expectation of a robust recovery driven by rebuilding, said Greg Albrecht, the Louisiana Legislature’s chief economist.
“There’s no crisis we’ve had that even comes close to this,” Albrecht said.
Lawmakers are constitutionally required to pass spending bills before the next fiscal year begins July 1. The current regular session ends June 1, though legislators generally expect to hold a special session immediately afterward.
Revenue to the general fund, which is the aspect of state spending over which lawmakers have the most control, is projected to come in either $868 million below the last official forecast, according to estimates by Albrecht’s Legislative Fiscal Office, or $985 million under forecast according to the Division of Administration, part of the executive branch of state government.
The REC essentially adopted the LFO’s projection, which includes an overall reduction of about $1.03 billion, though it backed out about $25 million in unclaimed property money. State Treasurer John Schroder and Gov. John Bel Edwards’ administration are in a legal fight over whether state lawmakers should be allowed to appropriate unclaimed property dollars for state government operations, so members agreed to let the courts resolve that question before considering including it in the forecast.
Revenue for the rest of the current fiscal year was revised down about $123 million to reflect a downturn in the current quarter after three quarters of strong collections.
While Louisiana will begin to loosen some of the business restrictions meant to reduce the spread of the new coronavirus as early as Friday – Gov. John Bel Edwards planned to discuss next steps Monday – it is uncertain if consumers will feel safe enough to return to their normal activities.
“If this is the new normal, it sucks,” Albrecht said. “It really matters what people do, not what we want them to do.”
Commissioner of Administration Jay Dardenne, who serves on the REC along with state House Speaker Clay Schexnayder, state Senate President Page Cortez and academic economist Stephen Barnes, noted that the “estimating” part of “revenue estimating conference” highlights the inexact nature of the process even in relatively normal times.
“It’s more like the revenue ‘guesstimating’ process [now],” Dardenne quipped.
The REC plans to meet every other month for the foreseeable future to monitor and possibly tweak the forecast. The conference meets three times during most years.
Show More
Back to top button
Skip to content