No 'shiny, new' buildings and legislative pet projects; state dollars this year reserved for roads and repairs _lowres

Advocate staff photo by PATRICK DENNIS --The State Capitol building is aglow at sunset in this view from Capitol Park near the Old Arsenal.

Louisiana has a little bit more money to spend on health care, higher education, mental health services and other priorities in the coming year, but the latest revenue projection revealed Thursday still leaves the state with a looming fiscal cliff.

The Revenue Estimating Conference, a four-member panel that – based on input from the state's economists – decides how much money the state can spend in its budget, bumped up its expectations for the budget that begins July 1 by about $346 million.

House, Senate in budget mode as Gov. John Bel Edwards urges lawmakers to end session early

That leaves the state with about a $648 million gap remaining.

“If we’ve got the opportunity to lessen the impact of the fiscal cliff on the people of Louisiana, we’re going to take it," Gov. John Bel Edwards, a Democrat, said of the news. "While this does not solve our problems; it does help."

The state Legislature held a special session earlier this year to try to address what was then thought to be a nearly $1 billion fiscal cliff the state will face when temporary tax measures expire June 30.

Thanks to a quirk in how federal taxes impact state taxes in Louisiana, Congress' recent tax overhaul has given the state's coffers a boost, lessening the fiscal cliff.

The special session collapsed after the House reached an impasse on proposals to plug expiring revenue with new or partially-extended tax hikes. One of the sticking points was the belief among some, particularly House Republicans, who questioned the size of the fiscal cliff. At the time, they said they feared raising taxes more than would be needed to fill the hole.

“We told you the budget deficit was not as big as the governor claimed it was, and we fully expect it to continue to come down as we work through the appropriations process,” Lance Harris, chairman of the House Republican Delegation, said in a statement after the REC's latest projection was announced.

Meanwhile, the House Democratic Delegation countered that Thursday's news wasn't a surprise as many expected a boost from the federal tax rewrite.

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Here's how much the Legislature's two-week special session cost taxpayers

“We have known it was coming since before the last special session," Democratic Caucus Chair Robert Johnson, D-Marksville. "This confirms we must work even harder to close the budget gap, which threatens life-saving services for vulnerable citizens, the closure of our public-private hospitals, funding for higher education and will mark another year of devastating set-backs for infrastructure investments."

Edwards has said he hopes that state lawmakers will end the regular session early so that another special session can be held.

House Speaker Taylor Barras, a New Iberia Republican who serves on the revenue estimating panel, wouldn't commit to the special session idea after voting on the rosier outlook.

"This begins to focus in on what is truly out there as revenue," he said.

Barras said he believes that the House can pass a budget with the nearly $650 million in cuts, though he doesn't know how it would fare in the Senate.

Edwards' executive budget recommendation, which he is required by law to present as balanced in January, showed that $994 million in cuts would mean drastic cutbacks in higher education and health care, threatening safetynet hospitals and the Taylor Opportunity Program for Students.

Upon news of the updated projection, Edwards released a list of priorities where he would like to see lawmakers plug the additional $346 million.

Under his plan, the money would be split up among priorities in higher education, law enforcement, mental health services, services for seniors and TOPS – though not fully funding the popular scholarship program.

"A $648 million state general fund cut to the budget next fiscal year would still mean breaking our state’s promise to parents and students, and would dangerously underfund our law enforcement, health care for seniors, children and citizens with disabilities," Edwards said.

Follow Elizabeth Crisp on Twitter, @elizabethcrisp.