On this inauguration day, a new era dawns in Louisiana. Humbly and with deep gratitude to God and to each one of you, I thank you for the opportunity you have given me to serve as your governor for the next four years.
Nevertheless, on this new day, we begin our journey together in a winter of daunting challenges, calling us to reach deep within ourselves for the courage it will take to put Louisiana first for the next generation.
Our state budget presents us with dilemmas that will take a fortitude and discernment greater than we have seen lately on the political stage to overcome. Escalating use of one-time money, excessive fund sweeps, tax exemptions and credits that are more generous than we can afford, and external factors such as the drop in oil prices, slow corporate income and sales tax collections and a drop in mineral tax collections all contribute to where we stand today.
In the week before you elected me in November, our state’s Revenue Estimating Conference met and projected a $487 million revenue shortfall for our state’s current budget year. Gov. Bobby Jindal’s proposed midyear budget fixes were approved by the Joint Legislative Committee on the Budget. Now we know that the real problem for this year’s budget extends another $700 million to $750 million beyond that number. In reality, the outgoing administration’s current fiscal year budget has resulted in a nearly $1.2 billion budget hole this year. Economists tell us this is due at least in part to the continuing drop in oil prices, a slump in corporate income tax collections and a slowing in the collection of sales taxes.
Unfortunately, our fiscal problems do not end there.
In order to build a budget for next year (fiscal year 2016-17) that reflects what it takes to operate state government without using undesirable measures like excessive one-time money or fund sweeps, fiscal experts tell my incoming commissioner of the Division of Administration that our state is facing a $1.9 billion shortfall: $1.3 billion short in revenues to fund our expenses and, based on November’s economic performance numbers, a prediction that Louisiana will bring in $600 million less in revenues than what was expected next fiscal year.
While you have heard talk of budget shortfalls in the past, these numbers clearly present us with a real fiscal chasm, deeper and more severe than earlier facts demonstrated to any of us. It is a chasm not easily crossed.
The Senate president has warned of potential state worker layoffs and furloughs unless Louisiana raises revenues before June 30. The business roundtable Committee of 100 for Economic Development noted that “we are past the stage of political rhetoric,” saying “we cannot simply ‘cut our way out’ of these budget problems in this time frame.”
As the Committee of 100 cautioned: “This is not a Democratic or Republican issue — this is a Louisiana challenge.” With reference to potential revenue-raising that might be necessary to cross this budgetary chasm, this newspaper’s editors have called upon legislators to “face the numbers they assisted in creating without flinching, because any budget solution must be bipartisan.”
Make no mistake, however. In this winter of discontent, there are no challenges we will not meet. Together with our Legislature, you and I must stabilize our state budget if we are to save and fortify Louisiana for our children and grandchildren. Mindful of the great Gen. Douglas MacArthur’s rallying call more than a half-century ago, I pledge to you to bring our state together as we make it our duty and our honor as Louisianans to build courage when courage seems to fail, to regain faith when there seems to be little cause for faith, to create hope when hope becomes forlorn.
As I take the oath of office, my pledge is to work tirelessly and collaboratively to resolve these challenges and, in so doing, put Louisiana first.
John Bel Edwards is governor-elect of Louisiana.