Another special session likely after economists deliver grim budget news
Posted on 1/13/2017 1:12:00 PM.

State legislators will likely be called into a special session next month to deal with a budget deficit. The Revenue Estimating Conference has determined the midyear shortfall is around $313 million. Commissioner of Administration Jay Dardenne says legislative input will be needed to address a budget gap of that magnitude.

“So we can spread the cuts that are going to be necessary as far as possible,” Dardenne said.

Governor Edwards can make cuts to the budget, but state law only allows in certain areas like higher education and healthcare. Dardenne says a special session is likely, so legislators can spread the cuts around.

“It’s going to be a very difficult challenge in many respects for all involved to deal with a reduction of this magnitude for the few months remaining in the fiscal year,” Dardenne said.

House Speaker Taylor Barras agrees another special session could be needed to address the massive deficit. But he says after the last two extraordinary sessions, the appetite to raise more revenue isn’t strong at the Capitol.

“There could be some limited appetite, but I just don’t think it’s enough to completely close the gaps,” Barras said.

Dardenne says they do to intend to use $119 million from the rainy day fund to close the gap, but that’s not enough to address the entire shortfall. The deficit is the result of lagging tax collections. Economists say the state has been losing jobs monthly since August 2015. Barras says unfortunately, state agencies are in for another round of painful cuts, because the revenue picture is not getting better.

“Our economy is suffering now, and we have to make the adjustments in state government as a result,” Barras said.

Governor John Bel Edwards released the following statement on the meeting: 

“Today’s action by the Revenue Estimating Conference clearly indicates the need for a special session. I have said all along that I am not willing to place the burden of this budget crisis only on the backs of our our hardworking families, students or our most vulnerable citizens. In order to avoid that, the entirety of the state’s budget must be opened up in order to make these cuts, otherwise they will be concentrated in a few areas and the impact would be too painful for our people to bear. The only way that can happen is with a special session. I have met with legislative leaders to solicit their input, and together, I know we’ll develop a plan that solves this budget crisis in the most responsible way for our citizens.

“That said, these projections, coupled with our ongoing budget challenges, underscore the need for comprehensive tax reform in the upcoming legislative session. The bipartisan task force charged with examining ways to improve our system has made its recommendations on how we can provide families and businesses much-needed stability and predictability in our tax code going forward. Those recommendations are currently under consideration, and I look forward to working with the legislature in April to make the necessary and responsible reforms so that our state can consistently bring in sufficient revenue to fund the programs we all consider important for Louisiana to prosper.”

Jay Dardenne, Taylor Barras, John Bel Edwards, REC, special session

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