Louisiana’s income forecasts have been adjusted to reflect recently passed tax increases, providing a balanced budget for the state’s 2016-17 fiscal year, which starts Friday.
But that balance could be short-lived, as more financial problems loom for state government, The Associated Press reports.
Economists have warned the state could close the books for the current fiscal year with a deficit as large as $200 million.
Also, Gov. John Bel Edwards’ administration says Louisiana might have to take out a short-term loan to keep cash flowing and government services operating until taxes are collected.
The state Revenue Estimating Conference—which creates the income forecasts for state tax, license and fee collections—met today to adjust the state’s income projections to account for the $263 million in taxes raised in the just-ended special session. The group also updated revenue forecasts with new fee hikes passed in the earlier regular legislative session.
Total adjustments added up to about $371 million.
Adding a level of uncertainty, the Legislature’s chief economist, Greg Albrecht, noted that the impact of some of the approved tax increases and reworked tax breaks were indeterminable and, therefore, not included in the new forecasts.
“We have upside potential,” Albrecht said. “And we have downside risk as well.”
The tax hikes did not spare state agencies from budget cuts. The budget going into effect on Friday includes reductions to K-12 public education, the TOPS college tuition program and corrections programs.
