When asked at the LABI conference how the administration hoped to balance next year’s budget, Paul Rainwater, commissioner of administration, grinned broadly and said, “I’ll tell y’all on March 11,” the date the executive budget is presented. That didn’t get a big laugh. With little information about how to bridge the projected $1.6 billion shortfall, there is concern among legislators that the governor could present a balanced budget with deep cuts that can only be mitigated if the Legislature agrees to the sale of assets or to allow colleges another round of fee increases. That could put the choice in the Legislature’s hands to, for instance, cut higher education by less than 10% if they adopt those proposals or closer to 20% if they don’t.
— The most surprising projection at the Revenue Estimating Conference Thursday was a decrease in mineral income, despite the rising price of oil and growing production in the Haynesville Shale. “I’ve not seen that before,” says legislative economist Greg Albrecht of mineral prices and severance tax collections moving in opposite directions. A major culprit, he figures, is the two-year tax exemption on horizontal drilling, going back to the 1990s, that allows most natural gas production in the Haynesville Shale to go untaxed. The shale formation, which has brought riches to landowners from bonus and royalty payments in the last three years, is actually costing the state money. Albrecht says drillers are shifting rigs from non-exempt fields in south Louisiana to tax-exempt fields in north Louisiana.
They said it: “It may be the wrong people, but somebody’s getting money.” —Oil spill claims chief Kenneth Feinberg to fishers’ complaints that they are not being compensated, in The Times-Picayune
(John Maginnis publishes LaPolitics Weekly, a newsletter on Louisiana politics, at LaPolitics.com.)
