The Revenue Estimating Conference has agreed to dramatically lower the revenue forecast for the fiscal year that begins July 1st, which will mean at least a billion-dollar reduction in state spending next fiscal year. The Legislature’s Chief Economist Greg Albrecht says what is happening to the state’s budget outlook is unprecedented
“There’s no crisis we’ve had to even come close to this. The trick here will be, how long will this last,” said Albrecht.
Tax collections have taken a significant hit as many businesses have been shuttered as a result of the coronavirus pandemic. Albrecht says there are no signs for economic recovery anytime soon in Louisiana.
“We have to be pulled along by the rest of the country and the rest of the world and the momentum at the US level is stalling out. Unless there is going to be a strong and vibrant recovery at the US and world levels, I don’t think there is going to be one here,” said Albrecht.
Albrecht says we could be looking at four really bad quarters, before it starts to get better.
He says not only are tax collections down, but 310,000 people have filed for unemployment and a recent study found that one out of every four people are out of work in New Orleans.
“Next up, Baton Rouge at just over 20 percent and it kind of drops down slowly, but even the lowest metro areas, Monroe and it’s 15 percent of their employment base has claimed,” said Albrecht.
State lawmakers will use this estimate to begin crafting a budget for next fiscal year. There will be a billion-dollar cut in state spending, which means health care and higher education are on the chopping block, unless the federal government provides the state with financial assistance.
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