Louisiana is barreling toward a projected $1.5 billion budget shortfall in 2018, when several new taxes that were approved this year are set to expire.
A Joint Legislative Budget Committee meeting Friday morning gave state lawmakers the first official update on the size of the gap they could face when the 2018-2019 budget cycle rolls around.
Barry Dussé, director of the governor's Office of Planning and Budget, told the Joint Legislative Budget Committee that the current year's budget, which began July 1, is on track to remain balanced, as is the following year. The big test for the state, he said, comes in the budget that begins July 1, 2018.
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"That's mainly from the roll off of the revenues — the temporary taxes that were passed," he said.
The impending fiscal cliff doesn't come as a surprise, as lawmakers and Gov. John Bel Edwards' administration had billed the increases in the state sales tax and other money-generating efforts that were approved during two special sessions earlier this year as a temporary fix until a more permanent budget solution could be hammered out.
"The cliff is very real and very significant," Commissioner of Administration Jay Dardenne said this week during a meeting of the Press Club of Baton Rouge. "Obviously, it's only a couple of years away."
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Edwards has called on the state Legislature to dedicate its session that begins next April to overhauling the state budget and tax structure, which means the state may never make it to that $1.5 billion "cliff," if legislators heed Edwards' urging and address it next year.
A task force that was established to come up with recommendations for lawmakers has been meeting regularly and is due to report back with its suggestions next month.
Before the tax hikes were approved, the budget that begins July 1, 2017 had been projected at a $700 million shortfall.
"What the Legislature did during the sessions, the next fiscal year is showing relatively balanced," Dussé said Friday.
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Dardenne had revealed during the Press Club meeting that he believed the state ended last year's budget on June 30 with a deficit. Dussé said on Friday that those figures are still being calculated and will be revealed during the Budget Committee's meeting in October.
"I think we are going to be facing some amount of a deficit that will have to be dealt with," Dardenne said.
The money to plug that hole will likely have to be shaved off of this year's budget, unless an unexpected source of money is identified.
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