Gov. Bobby Jindal’s administration is quietly notifying legislative leaders that Louisiana closed the books on the last budget year with a deficit, but the administration isn’t saying publicly how deep the problem is.
As The Associated Press reports, the announcement of the deficit’s size is expected in mid-October, when details are due to the Legislature’s joint budget committee. House Speaker Chuck Kleckley and House Appropriations Committee Chairman Jim Fannin say they’ve been told by administration officials that the state ended the 2014-15 fiscal year on June 30 in the red.
But both men say they haven’t received a final tally.
“I have not gotten anything official,” says Fannin, R-Jonesboro. “In conversation with the Division of Administration, they have indicated that there will be a deficit.”
Kleckley, R-Lake Charles, says: “I have not been told what the final number is. They were still working on the final numbers.”
The deficit, which must be closed within nine months, heaps new worries on a state struggling with a long list of budget problems. And it comes as Jindal is running for the GOP presidential nomination and pitching himself as a strong manager of Louisiana’s finances.
The deficit’s cause is unclear. Jindal’s Division of Administration didn’t immediately respond to requests for comment for additional information about the problem from The AP. House and Senate financial analysts are working with state agency leaders on options for cutting spending in this year’s $25 billion budget to close the gap, Fannin says.
The Jindal administration could opt to leave the budget-balancing needed to address the deficit to the next administration. Jindal is term-limited and cannot run again. His successor, to be chosen this fall, will take office in January.
Louisiana has faced repeated budget shortfalls during Jindal’s two terms in office, a combination of the economic downturn and the cost of tax breaks that have siphoned more dollars away from the state treasury than expected. Rather than match state spending to income, the governor and lawmakers have raided savings accounts, sold property and used other short-term fixes to patch together budgets. But that creates new gaps each year.
In addition to last year’s deficit, Louisiana’s TOPS free college tuition program is estimated to be short $19 million this year, and the Medicaid program is expected to face a gap that legislative analysts said could reach up to $300 million. Also, with oil prices falling, the state is getting less money than expected from severance taxes and mineral royalties, which could force midyear budget cuts.
Kleckley says he wants the state’s income forecasting panel to meet, likely in November, to review tax collections and determine what holes exist. He says some other tax collections may be stronger than expected, lessening the impact of the oil price slump.
