Industry leaders and state officials say times are tough in the oil and gas patch with low commodity prices, and a troubled state budget only complicates the path toward recovery.
During the Louisiana Oil & Gas Association’s annual meeting Thursday in Lake Charles, The American Press reports Gov. John Bel Edwards discussed the state’s budget as well as the details surrounding what many consider to be the industry’s worst downturn since the 1980s.
Edwards said he could not promise the industry was going to get better in the short term. Over the last year, Louisiana has lost 10,000 jobs in the oil and gas industry.
“I know one of our tomorrows, things are going to be better for you and things are going to be better for the state,” he said.
A large portion of Edwards’ speech focused on the state’s budget shortfall, which in the current fiscal year is roughly $750 million. Next year’s shortfall is estimated to be as much as $1.9 billion. Both numbers are expected to grow, representing the eighth consecutive year the state has had a revenue shortfall.
Edwards discussed a handful of potential actions that could put the state on a “sustainable trajectory.” A majority of the budget proposals for the current fiscal year are not “revenue raising proposals,” he said. Included among them are measures to tap the rainy day fund, redirect the first year BP payment to the state, and cut discretionary statutorily dedicated funds.
Edwards also discussed the concept of a “clean penny,” which is an additional penny of sales tax for the state. The penny sales tax will not apply to groceries, prescription drugs, or to residential utilities.
