The Louisiana Legislature is expected to be called into a special session next month to shore up a $313 million hole in the state budget that ends June 30.
The panel that sets the state's revenue forecast on Friday 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.
Gov. John Bel Edwards had said before the meeting that anything beyond a $300 million shortfall would exceed the amount he can cut from the budget on his own and trigger the need for a special session. Lawmakers are also expected to be asked to tap into the state's reserves to help cover the gap.
"There's no question in our minds that we have to have a special session," Edwards' chief budget architect Jay Dardenne said after the Revenue Estimating Conference downgraded the state budget outlook.
House Speaker Taylor Barras, R-New Iberia, has expressed skepticism over the need for a special session. On Friday, he still wouldn't outright state his support for one.
"It's not inevitable that we have a special session," he said. "We could accomplish the cuts without one."
Louisiana lawmakers appear to be heading toward another special session next month to try to…
"If the governor calls a special session, we will be here for it," Barras added.
Senate President John Alario, R-Westwego, said he agreed with Edwards that a special session is needed.
And Edwards appears to have particular leverage to force legislators' hands.
Leaders want to take $119 million from the rainy day fund to help fill the budget hole. That could be accomplished through a mail ballot of lawmakers, but it would be up to the governor to say whether that should happen.
Instead, it's likely that the governor will include tapping the reserve fund in his call for a special session.
The Joint Legislative Budget Committee is expected to meet on Jan. 27.
Edwards said he has been eyeing a period between Valentine's Day on Feb. 14 and Mardi Gras on Feb. 28 for the special session. By law, the governor would set the dates and the perimeters for which actions can be taken.
It would be the third special session since Edwards took office a year ago. Last year, state lawmakers met in two special sessions to plug a $2 billion gap in the budget that began July 1.
The latest shortfall comes on top of a separate $313 million cut just last month that was needed to close the budget year that ended June 30, after collections didn't meet expectations.
Sluggish personal income and corporate tax collections have left the state still short on the money allocated to state services this year.
"We are still losing jobs on a monthly basis," said Greg Albrecht, one of the economists who advises the state Revenue Estimating Conference. "We've lost jobs in the highest-paying sectors, and what we've gained is in the lowest-paying."
Beyond the rainy day fund, the bulk of the budget adjustments in the special session will likely come from cuts to state agencies.
Edwards said he wants to spare higher education and health care as much as possible, but those two areas are left vulnerable in the budget because of protections to other services.
"I have said all along that I am not willing to place the burden of this budget crisis only on the backs of our hardworking families, students or our most vulnerable citizens," he said in a statement Friday. "In order to avoid that, the entirety of the state’s budget must be opened up in order to make these cuts, otherwise they will be concentrated in a few areas and the impact would be too painful for our people to bear. The only way that can happen is with a special session."
Edwards told The Advocate that some statewide officials have volunteered to take larger hits to their budgets to spare others. He didn't specify which offices those were.
Dardenne said he is still in the process of surveying agency heads about cuts that they can absorb.
During its regular session that begins in April, the state Legislature is expected to focus on an overhaul of the state budget and taxes to address structural issues in spending and revenue collection. A penny sales tax hike adopted earlier this year was meant as a temporary fix to bridge the gap through June 2018.
Edwards said that the state's ongoing budget challenges "underscore the need for comprehensive tax reform in the upcoming legislative session."