Revenue Estimating COnference on 051821

The four members of the Revenue Estimating Conference decides how much money is available to spend. Before their meeting on Tuesday, May 18, 2021 the four members visited. They are, from left to right, Stephen Barnes, professor at University of Louisiana at Lafayette, who serves as an independent economists; Senate President Page Cortez, R-Lafayette, and House Speaker Clay Schexnayder, R-Gonzales, who represent the Louisiana Legislature; and Commissioner of Administration Jay Dardenne, who represents the governor.

Louisiana lawmakers are going to have a whole lot more money to spend over the next 14 months – about $677 million more, the Revenue Estimating Conference decided Tuesday afternoon.

The state's economist said that's largely thanks to dramatic levels of federal support, which has helped to prop up businesses and unemployment benefits and has fueled a resurgence in consumer spending, with billions more on its way. 

Much of that money has shown up in increased retail sales, particularly new cars.

The panel that determines how much the state can spend forecast that current trends indicate the state should collect about $357 million more to spend in the current fiscal year, which ends June 30, and another $320 million for Fiscal Year 2022, which begins July 1. Economists also gave some credit to higher corporate income tax collections and slightly more gambling revenues than were expected.

"I don't think there will be any shortage of suggestions for how to spend the money," said Commissioner of Administration Jay Dardenne, who represents Democratic Gov. John Bel Edwards on the REC.

Legislative leaders have said they want to use some of those new dollars to augment pay raises currently in the budget from $800 to $1000 for teachers and from $400 to $500 for cafeteria workers, bus drivers and other support staff. 

The growth in the number of jobs have remained about the same for the past three months and Louisiana is shifting from an oil production state to an oilfield servicing state. And Louisiana’s economy is shifting from a dependence on drilling for oil to providing services to the oilfield.

Legislative economist Greg Albrecht noted that only 45% of the 284,000 workers who lost jobs during the pandemic have gone back to work.

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Lafayette Republican Sen. Page Cortez, who as Senate president is one of the four REC panelists who decide how much is available, asked several times if enhanced federal benefits are making it harder for businesses to fill vacancies.

“My question is that lack of movement due to the increase of unemployment benefits?” Cortez said.

Additional unemployment benefits have become a cause célèbre among Republicans with several of the party’s governors in other states refusing the money on the belief that the enhanced benefits, alone, are responsible for the number of low-paying jobs going unfilled. 

Economist Albrecht noted that the largest jump in the number of actual jobs during the COVID pandemic came last year when the federal government added $600 to the state’s benefit. The additional benefit has been $300 for months and will expire in September. “The economic literature doesn’t show that as a big reason,” Albrecht replied.

The Revenue Estimating Conference, made up of Cortez, House Speaker Clay Schexnayder, Commissioner of Administration Jay Dardenne and economist Stephen Barnes, makes forecasts on how much tax and fee revenue Louisiana is expected to bring in. 

The conference's estimates provide a starting point at the beginning of the legislative session for how much money lawmakers will have to dole out in the state's annual $30 billion-plus budget.

The revision Tuesday, which comes as the legislative session enters its final stretch, means lawmakers are suddenly awash with more cash to spend. The budget is awaiting action in the state Senate. 

Email Blake Paterson at bpaterson@theadvocate.com and follow him on Twitter @blakepater