When Louisiana legislators meet next week, it will be to solve the state's 15th mid-year budget deficit in nine years.
The state found itself off track $319 million in the 2009 budget cycle, then $107 million two years later. In 2010 alone, there were three mid-year deficits that came in at a grand total of $828 million. More recently, the state came up about $313 million short when it closed the books on the budget that ended June 30 — and that was after resolving two separate mid-year gaps totaling more than $1 billion.
There hasn't been a single year since 2009 in which the Legislature-approved budget has been on track with what the state actually had to spend — creating a steady spiral of shortfalls. (The state calculated deficits differently prior to 2009, so it's unclear how much further back the trend may really stretch.)
Despite approving a sales tax hike and other measures that were meant to shore up finances through the current year and into a more permanent fix, the state's back in the same boat.
And it's not clear when it might end, or whether the latest round — $304 million — will even settle up the current budget before it ends June 30.
Leaders say that recent revenue collections appear to be trending more positive, though.
"The numbers look good," said Revenue Secretary Kimberly Robinson of the January figures, which reflect taxes collected in December. "We're hoping we continue to trend in that direction."
"We may have seen the first bit of encouraging news," Commissioner of Administration Jay Dardenne said, echoing Robinson. "That leads me to believe that we're not going to be looking at the worst-case scenario."
Gov. John Bel Edwards is asking the Louisiana Legislature to dip into the state's reserves, …
The state is legally required to have a "balanced budget" each year, but as recent years have shown, that doesn't always work in practice when revenue collections don't meet expectations, requiring adjustments.
Gov. John Bel Edwards' spokesman Richard Carbo said it is possible that the state could yet again find itself facing yet another shortfall this year, but the Governor's administration remains largely optimistic.
"It's always a possibility, but what we are able to plan for at the moment is the $304 million shortfall," Carbo said this week.
How much money the state is taking in, and therefore can spend, is tracked by a four-member panel known as the Revenue Estimating Conference. Its current membership includes Dardenne, Republican House Speaker Taylor Barras, Republican Senate President John Alario and LSU economics professor Jim Richardson.
If the REC, based on guidance from the state's economists, determines that the government is collecting less money than it needs to cover what has been budgeted, then the governor has 30 days to come up with a solution.
Then-state Rep. John Bel Edwards complained year after year that Gov. Bobby Jindal wasn’t se…
The REC last month recognized that tax collections for the budget year have failed to meet expectations — particularly in personal income and corporate taxes, leaving the state budget unbalanced. Of the economic forecasts presented to the panel, the group went with the smallest shortfall, meaning there could have been a larger deficit.
Edwards, a Democrat, has called lawmakers to the State Capitol for a special session, which begins at 6:30 p.m. on Monday and must end by midnight on Feb. 22.
He also wants the Legislature to prioritize structural issues that have spurred the systemic shortfalls in the state's finances — officially balancing revenue and spending — in the regular session that begins in April.
A penny sales tax hike adopted earlier this year was meant as a temporary fix to bridge the gap through June 2018.
Gov. John Bel Edwards has issued a one-page notice officially calling the Louisiana Legislat…
Robinson, who co-chaired a task force that evaluated the budget and made recommendations to lawmakers, said that the shortfalls illustrate how the current budget structure is missing a key component: Stability.
"You've got to know that your resources are stable," she said. "If we don't have that long-term stability, we'll continue to have these mid-year deficits that we need to address."
Meanwhile, Edwards' plan for the current deficit relies on more short-term fixes — something that has drawn criticism from some lawmakers.
Edwards has asked legislators to agree to to pull $119 million from the state's reserves, make modest cuts to some government functions and sweep other sources of revenue that can temporarily plug the holes.
Use of the rainy day fund requires approval from two-thirds of the members of the House and Senate and is likely to emerge as one of the key battles in the nine-day special session.
The state savings account currently has a balance of $360 million, but the Legislature can't take more than a third of that. The state is required to put at least $25 million back into the fund each year.
The Legislature agreed to tap into the fund four times under Gov. Bobby Jindal’s administration, totaling $517.4 million. Last year, lawmakers pulled $128 million from the fund to plug a budget hole shortly after Edwards took office that he says was "inherited" from the Jindal administration.