District 21 State Rep. Kenny Havard, R-St. Francisville, was the guest of Rotarian Brent Fuselier at the Feb. 26 Zachary Rotary Club meeting.
Havard’s district includes primarily the majority of East and West Feliciana parishes and the northwest corner of East Baton Rouge Parish, which includes the Zachary area.
In his first year in the state Legislature, Havard, who was raised in Jackson, said he was part of a group called the “Fiscal Hawks,” that was opposed to some of the budget tactics employed by the administration in an attempt to balance the budget.
The total state budget for fiscal year 2015-16, as appropriated, was roughly $29.1 billion.
Havard listed a breakdown of the budget’s financial means for Rotarians.
“There is one major flaw in how we do our budget,” said Havard, referencing the Revenue Estimating Committee, a state panel that projects revenues to be spent by Louisiana government.
“I’d like us to not allow them not to project too high. They promise and allocate money, but it’s a bargaining tool,” Havard said.
Havard’s presentation to the Rotary Club covered the several reductions made in order to balance the state budget; structural budget deficits; sources of one-time money in the state budget; state spending and how Louisiana compares to other states; tax expenditures and what they mean for 2016; tax collections versus expenditures; and an oil industry outlook which mentioned the recent drop in oil prices.
In May, Havard said oil was forecast at $92.44 per barrel for fiscal year 2015 but dropped to $81.33 in November. Then the price dropped to $69.36 and was forecast to be $59.64 for 2016. The price of oil as of January was $49.60, Havard said.
“For every dollar that the price of oil per barrel drops, Louisiana loses about $11 million in state revenue,” Havard said.
The cumulative overall effect is a $270 million reduction in fiscal year 2015 and $404 million reduction in 2016, he said.
“There have been no other significant revenue growth areas to offset reductions of this magnitude,” Havard said.
Preliminary reports from the administration indicate a $300 million reduction in higher education and a $250 million reduction in health and hospitals, Havard said.
Havard also presented options for reducing tax expenditures.
Repealing tax credits, exemptions, deductions, exclusions or rebates. “The repeal could be short-term, meaning you can repeal for two or three years,” said Havard.
Modify tax credits in such a way that the modification is a net gain to the state general fund. “The advantage to this is you’ll know the upper end of the state’s liability,” said Havard. “Examples include implementing annual program caps and caps per taxpayer or project.”
Suspend sales and use tax exemptions for a defined period of time.
Raise revenue through increases in taxes such as tobacco tax or alcohol tax.
Modify severance tax exemptions.
Havard said he is in his Jackson office Monday through Thursday and at his Zachary office on Fridays. His legislative aide is Diane Womack.
To contact Havard, call (225) 634-7470 or email email@example.com.