While the Legislature grapples with balancing next year’s budget, it received an unwelcome surprise today: The budget that ends June 30 is $77 million short of projected revenues. The Revenue Estimating Conference’s downward revision puts new pressure on the Jindal administration to find more savings in the six weeks remaining in this fiscal year or to risk it ending with a deficit. The biggest culprit is the individual income tax, which the Division of Administration economist now projects to fall $172 million short of the March forecast, even though the new estimate would still exceed last year’s collections by 10%. Picking up some of that slack are higher sales and corporate income tax collections than were projected in March. Severance tax collections continue to slump, despite the continued rise in oil prices. “The issue is not price,” legislative economist Greg Albrecht says, “it’s volume.”
—House leaders reacted angrily to comments by Gov. Bobby Jindal and Commissioner of Administration Paul Rainwater that legislators acted irresponsibly in making additional cuts to the governor’s proposed budget. Both called it “irresponsible” that the House Appropriations Committee made $139 million in additional cuts and pulled $82 million from the economic development fund for luring companies to locate in the state. The committee “shirked its responsibility,” Rainwater says. “I was shocked to hear those words,” says Appropriations Chairman Jim Fannin, a Jonesboro Democrat, noting that the committee action was just the first step in the legislative process for the budget. “It was out of bounds and uncalled for to make those statements when we did not get a balanced budget,” Fannin says. The Jindal budget relied on revenue from the sale of prisons, which is off the table for now, and passage of a constitutional amendment in October to dedicate tobacco payments to the TOPS program.
(John Maginnis will publish a daily update on the legislative session at 3 p.m., available to LaPolitics Weekly subscribers on the Subscribers Only page at LaPolitics.com. You can register your user name and password on the Lapolitics home page.)
