Louisiana Spotlight: Another budget crisis, more financial uncertainty likely again next year _lowres

Associated Press star reporter Melinda Deslatte in Baton Rouge, La., Monday, April 13, 2015. (AP Photo/Gerald Herbert)

After 19 weeks of work, Louisiana’s lawmakers have gone home, but it will take months to figure out what they’ve done and how it impacts the state’s finances.

The more than $26 billion state operating budget crafted by the House and Senate largely operates on best guesses. The Legislature entirely skipped dealing with a projected deficit from the current budget year.

After passing a flurry of tax bills, no one’s really sure how they will impact the behavior of people and businesses that pay the taxes and how that might affect the revenue expected from the changes.

“Quite frankly, we’re not exactly sure what we voted for,” Sen. Danny Martiny, R-Kenner, said at one point on the final day of the third legislative session since February.

As for how much money was raised and spent, everybody’s got a different perspective about the numbers and what they mean.

On a couple things, there was widespread agreement as the House and Senate completed their work near midnight Thursday. No one’s exceedingly happy about the budget they passed and the cuts it contains, but lawmakers seemed universally happy about going home after nearly five months of political fights, contentious tax votes and budget haggling.

The two men who led the budget negotiations — House Appropriations Chairman Cameron Henry and Senate Finance Chairman Eric LaFleur — sounded as much resigned as anything else when they each urged their colleagues to support the final deal.

“It’s difficult because you have so many people you’re trying to appeal to and you can’t make everyone happy,” said LaFleur, D-Ville Platte. “At the end of the day, this is the best solution we could come up with.”

Henry’s assessment was: “I know the bill is not in the format everyone would like.” But he encouraged his House colleagues to support it anyway.

“Let’s do the people’s business and go home,” Henry, R-Metairie, said.

With tax increases passed over two special sessions and fee bills passed in the regular session, Gov. John Bel Edwards and lawmakers raised an estimated $1.6 billion to fill holes in the budget that takes hold July 1 to finance government services and programs.

But that didn’t fill all the gaps identified by the Edwards administration, and as July begins, cuts will take hold across most of state government agencies.

The governor also warned that trust fund raids and financing maneuvers used by former Gov. Bobby Jindal’s administration have threatened to create cash flow problems that could begin showing up in the new financial year.

Lawmakers also set June 2018 expiration dates on more than $1.1 billion estimated to come in annually from sales taxes they passed, so they’ll have sizable financial problems again in only two years.

The House and Senate also largely ignored word Louisiana could close the budget year that ends June 30 with a deficit as large as $200 million.

House Speaker Taylor Barras and other House leaders wanted to wait until the books are officially closed to see what the real deficit might be, after accounting for prior tax changes and a delay in tax payments in parishes with flood damage.

“I am confident it will be less than $200 million,” said Barras, R-New Iberia.

The economists who devised financial estimates of the tax bills on which the budget was based used data from the Department of Revenue that in some instances was incomplete or didn’t give them enough of an understanding of how taxpayers may react to the changes.

Some bills were expected to bring in more money for the state treasury, but lawmakers couldn’t include those assumptions because it was unclear how much additional cash or when. Other bills with more specific estimates were conservative projections that economists warned could fluctuate based on interactions with other bills.

While Senate leaders expressed confidence in the revenue estimates they had, House leaders thought legislative financial analysts low-balled the figures.

Only time will tell.

“It’ll be a creep, but hopefully by September or October we’ll have an exact snapshot of what the numbers might be,” Barras said.

Melinda Deslatte covers Louisiana politics for The Associated Press. Follow her on Twitter, @melindadeslatte.