The "fiscal cliff" that has loomed large over Louisiana for more than a year is officially gone.
The Revenue Estimating Conference updated the state revenue forecast Tuesday to reflect the nearly $500 million in taxes that state lawmakers approved in two special sessions this month.
The new $29.5 billion state budget takes effect July 1 with most agencies funded at levels that will prevent drastic cuts to state services.
Taylor Opportunity Program for Students scholarships, colleges and universities, safety net hospitals, district attorneys, the food stamp program and district attorneys are among efforts spared from cuts in the coming year.
The $9.49 billion in state general dollars in the coming year's budget is up from the $9.2 billion spent last year and $28.7 million more than the existing operating budget, largely do to mandatory cost increases that agencies face.
The quick REC vote on Tuesday puts to bed months of fretting over the gap the state faced when more than $1 billion in temporary tax measures expire June 30 and what programs were at risk.
With just days to spare, the Louisiana Legislature has voted to extend a sales tax hike through 2025 to narrowly avoid a revenue shortfall tha…
Lawmakers ended the third special session of the year on Sunday with an agreement to extend nine-twentieths, or .45, of an expiring one-cent sales tax. The state sales tax rate will go from 5 percent to 4.45 percent on July 1. That will generate $463 million toward addressing the cliff. The Legislature also agreed in an earlier session to trim some sales tax breaks for industry and to divert $46 million in from the state's BP oil spill settlement to plug the rest of the hole.
Without the hike, the rate would have dropped to 4 percent on July 1.
"I can tell you, this plan, this approach we've come up with is going to give business leaders in Louisiana and those who want to invest in our state the confidence that they need," Gov. John Bel Edwards, a Democrat, said Sunday night. "We should all be encouraged by the fact that we have achieved stability and predictability."
The finalization of the budget, just days away from the start of the fiscal year, ends months of speculation and doomsday predictions. Over the course of the past year, Edwards and other officials repeatedly warned of what they said was at risk: Nursing homes would evict residents if Medicaid programs were cut. College students would leave the state in droves if TOPS was slashed. Thousands of prisoners would be released if the state didn't fund its inmate housing partnerships with local sheriffs. Hospitals across the state would shut down if private partner contracts were not supported.
None of those things are happening under the budget, thanks to the influx from taxes lawmakers approved.
The sales tax, which Edwards signed into law on Monday ahead of the hastily-arranged REC meeting, will expire in 2025, possibly putting a plug on the state's seemingly never-ending budget crises of recent years.
The House Republican Delegation chaired by Rep. Lance Harris, R-Alexandria, said in a statement that its members fought tax proposals in previous sessions because the fiscal cliff had been overstated.
During the first special session, Edwards proposed that nearly $1 billion in tax revenue would be needed. At the start of the final special session, the number had shrunk to about $600 million.
After years of special sessions and temporary budget patches, the Louisiana Legislature appears to be on track to shore up the state's finance…
"While the clear majority of the House Republican Delegation did not want to renew any portion of the fifth penny, the majority believed the actions the governor promised to take against good people in this state would be far worse than the .45 of one cent renewal," the House GOP Caucus, which has frequently been at odds with Edwards, said in its statement Tuesday. "At the end of the day, House Republicans negotiated a deal that was less than half of what the governor initially demanded and prevented his attempt to increase personal income taxes and double taxation on businesses."
The House majority also took a shot at Edwards' politically as speculation swirls about next year's governor's race.
"Hopefully, we will soon have the help of an ally in the governor’s office," the delegation's statement reads.
Edwards is seeking a second gubernatorial term. No Republicans have announced plans to challenge him, though several frequent critics of Edwards are thought to be considering a run, including U.S. Sen. John Kennedy, U.S. Rep. Ralph Abraham, of Alto, Attorney General Jeff Landry and state Sen. Sharon Hewitt, of Slidell.