An economist who helps decide Louisiana’s state income forecast has delivered grim news to Gov. John Bel Edwards and legislative leaders: The state could end up with as much as a $200 million deficit this year.
If the projection pans out, it would worsen state financial problems in the upcoming budget year that begins July 1, The Associated Press reports.
Jim Richardson, an LSU economist who serves as the independent member of the state’s Revenue Estimating Conference, said he met Thursday with Edwards, Senate President John Alario and House Speaker Taylor Barras, among others, to talk about how far business tax collections have fallen below the state’s official forecast.
Richardson’s assessment was that Louisiana appeared on track to collect up to $200 million less than the $359 million expected from corporate income and franchise taxes in the budget year that ends June 30.
“Unless it’s a real miracle, I don’t think we’re going to make it,” Richardson said Thursday night.
This year’s budget was built on the income forecast. If the tax dollars fall short, the state would end the financial year with a deficit that would have to be closed in the next year.
Oil prices have rebounded a bit above the state forecast, but individual income and sales taxes are sluggish, so improving oil prices won’t bail out the state budget, Richardson said.
“There was no sign that they were going to make up that difference or allow us to offset in some other way,” he said.
The Associated Press has the full story.
