Our Views: Tax increases may cause indigestion on Louisiana's budget menu _lowres

Advocate staff photo by HILARY SCHEINUK -- Louisiana Governor John Bel Edwards speaks during a press conference held to discuss budget options, Tuesday, January 19, 2016, at the Louisiana State Capitol in Baton Rouge, La.

Gov. John Bel Edwards on Friday said Louisiana’s $1.9 billion shortfall starting July 1 likely will get worse.

Edwards said comments by officials of the Legislative Fiscal Office and others mean there is little reason to think the financial forecasts for state revenue will get better.

“There are considerable reasons to believe the numbers get worse,” he said. “I don’t have a handle on how much worse.”

Edwards also said the looming shortfall for state services is bare bones.

“No part of the $1.9 billion is an additional dollar that accounts for inflation,” he said.

“There is no additional money to account for merit raises for state employees,” Edwards said. “There is no money for a K-12 funding formula increase. In the strictest sense of the phrase, this is a continuation budget.”

The governor said more details will be known on Feb. 10, when the Revenue Estimating Conference meets.

Edwards called the gathering to announce a series of appointments, including naming former Louisiana Department of Environmental Quality official Thomas Harris as secretary for the state Department of Natural Resources and Marketa Garner Walters as secretary for the state Department of Children and Family Services.

Walters is president of a child and family services consulting firm.

The news conference took place at the same time the Joint Legislative Committee on the Budget was discussing the state’s bleak financial outlook.

State services face a shortfall of $750 million, and possibly more, by June 30, in addition to the much bigger one for the financial year that begins the next day.

The governor devoted several minutes to explaining his possible tax hike proposals compared with what he said during last year’s race for governor.

Edwards last week unveiled a “menu” of tax hike options, including increases in the state sales, individual and corporate income taxes. “The fact of the matter is it is worse by a factor of two than we were aware of as recently as November of last year,” he said.

“And as a result, the proposals that I made are different than I talked about in the election because the facts are different. They (the challenges) are harder, and so the proposals have to be equal to the challenge.”

Earlier this week, GOP state Treasurer John Kennedy, who is running to succeed U.S. Sen. David Vitter, called Edwards’ possible tax increases breathtaking and premature.

Kennedy said the state could tackle its immediate $750 million shortfall through revamped spending practices and avoid a tax boost.

“John Kennedy is going to say what John Kennedy says,” Edwards said when asked about the criticism.

“I appreciate that. The fact of the matter is he is running for the Senate. He doesn’t have an incumbent to run against. So he will do what he thinks is in his best interest. I would invite him to do what is in the state’s best interest instead.”

Higher education and Department of Health and Hospital leaders have been asked to outline what the potential cuts could look like if implemented.

LSU President F. King Alexander told the LSU Board of Supervisors on Friday that the school would suffer a $65 million hit in the current budget, which he said would trigger “unprecedented actions.”

A special session on the budget is expected to start on Feb. 14. The regular session begins on March 14.

Walters will be paid $129,995 per year and Harris $129,210 annually, virtually the same as their predecessors in former Gov. Bobby Jindal’s administration.

Edwards also named former state Attorney General Richard Ieyoub as commissioner of conservation, to be paid $103,563 annually; former state Sen. Noble Ellington to serve as his legislative director; and former Louisiana Public Broadcasting journalist Shauna Sanford as press secretary.

Sanford will be paid $90,000 per year.

Others named are Michael Ellis, executive director, Coastal Protection and Restoration Authority, $150,000 per year — less than his predecessor — and Leslie Durham, the governor’s designee on the Delta Regional Authority, $72,800 annually.

Elizabeth Crisp, of The Advocate’s Capitol news bureau, contributed to this story.

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