By Friday's end, Louisiana should know whether the state Legislature will meet in another budget-crunching special session this month.
And if all goes according to Gov. John Bel Edwards and legislative leaders' plans, the Legislature will be back in Baton Rouge to try to sort out its finances ahead of the looming shortfall the state faces when temporary tax measures expire July 1.
Edwards, a Democrat, is scheduled to meet with House Speaker Taylor Barras and Senate President John Alario, both Republicans, one more time this week on Friday to try to feel out whether a special session will be fruitful, before making the final call whether a special session should begin Feb. 19. State law requires the governor is required to give a week notice when he calls a special session.
Encouraged by ongoing negotiations but not confident enough in the details, Edwards has already previously pushed back his decision deadline. But he says this week is the ultimate cut-off point because of the March 12 start of the regular session, during which lawmakers can't take up most revenue raising measures.
“There are no options that will be available to us later that aren’t available to us now," Edwards said at a health care event earlier this week, repeating a familiar plea to the lawmakers who have so far opposed the idea. "The situation won’t be better later than it is now."
"Fixing it in February is the right thing to do," he added.
The state Legislature approved the temporary tax hikes, including a one-cent sales tax increase and removal of some sales tax exemptions, shortly after Edwards took office in 2016, with the goal of sorting out the state's finances in the 2017 regularly scheduled fiscal session.
But things didn't go according to plan. The state now finds itself facing a nearly $1 billion shortfall in the budget that begins July 1, though some lawmakers remain dubious about that dollar figure, due to optimistic economic news and a state budget boost tied to the federal tax overhaul.
Barras, a New Iberia Republican whose the GOP-controlled chamber has mounted the biggest opposition to Edwards' proposals, said Thursday that there is a "more than 50 percent" chance that the State Legislature will meet in a special session but no final agreement has been reached on what approach lawmakers should take.
Two things that were part of Edwards' proposed solution appear to no longer be on the table: Applying the sales tax to some services and compressing income tax brackets, both of which Barras said have gained little traction among House Republicans who control the chamber.
"The rest of them are still up for discussion," Barras said. "It's been an ongoing discussion of all the options and variations of those options."
Some Republicans say they want a clearer picture of the size of the shortfall before agreeing to increase revenue. A new analysis from the Legislative Fiscal Office sent to members Thursday estimates that Congress' recent federal tax re-write will boost the coming budget by about $57 million and the following year's state budget by about $283 million because it will shrink the deductions that people get from the state.
Additionally, the next update in the state's revenue projections won't come until March.
Economist Loren Scott told the crowd at a Louisiana Association of Business and Industry meeting this week that Louisiana just finished a 20-month recession and began to see growth in May.
“We’ve been growing ever since," he said.
Barras said Thursday that there was not yet a plan for what Republicans will agree to approve and they hadn't reached a target dollar amount. Many have said that they want the shortfall to be solved with a mix of budget cuts and revenue-raisers, rather than revenue alone. That mix hasn't been identified. The Fiscal Office's analysis of proposals includes estimates for how much money various proposals might generate.
"We continue to have very strong conversations with members going through the various options," Barras said.
One of the items that House Republicans have voiced some support for – extending all or part of the sales tax hike that is set to expire – is something Edwards says he doesn't want. Barras said maintaining a part of the penny or reducing exemptions are substantial revenue raisers, compared to other proposals.