After getting whacked by the unexpected collapse in the price oil — and its impact on the state budget — Louisiana legislators Tuesday advanced a bill to limit the estimated price that is used to calculate projected revenues.
House Bill 562 would limit the forecast to 90 percent of the highest actual price per barrel of oil the previous year. As royalties, severance taxes and other mineral revenues are based on the price of oil, much of the decision on how much state government can spend is calculated from the price per barrel set each year — and that money often is spent before the actual dollars come in.
Rep. Kenny Havard, R-Jackson, says overestimating the price of oil is part of the reason state government had to make mid-year corrections in the budget when revenues don’t come in as predicted.
“This is the state’s way of printing money,” Havard told the House Appropriations Committee, which was debating the legislation. “This is to stop the overestimating.”
Had HB562 already been law, then the state would have saved $128 million for this fiscal year, he said.
The committee approved the measure without objection and sent it to the full House for consideration.