In flush times, not so long ago, politicians argued over how much state government would have to spend in the fiscal year beginning July 1, 2020.
Seems a very long time ago.
With the sharp curtailment of public activities, plummeting markets on Wall Street, vast new expenses to support the fight against coronavirus, all top public officials are like ordinary people in pretty much uncharted territory.
Such a drastic economic shortfall was not expected and how much it will come to is not clear. Some steps made by state and local governments — such as delaying filing of state income tax returns, or sales tax fees to cities and parishes — are needed to help hard-hit businesses and individuals, but they make an economic, and thus a revenue, forecast difficult to the point of absurdity. After all, it will be impossible to spend revenues that the state doesn’t get before the end of the fiscal year June 30.
Unlike the U.S. government, Louisiana and its political subdivisions balance their books every year. That means reserves are kept for unexpected bills, with the biggest that could be anticipated being hurricane preparations and recovery.
This is bigger than a hurricane.
The possibility of federal aid is certainly there for Louisiana. A presidential declaration of emergency, accessing some aid from FEMA and other agencies, was granted by President Donald Trump quickly, with bipartisan support of Gov. John Bel Edwards and Louisiana members of Congress. A bipartisan stimulus bill creaking its way through Congress may provide other help.
But past disasters have shown us all too clearly that federal aid is often accompanied by restrictions and exhaustive requirements for justifications for specific projects or expenditures. Estimating that bureaucratic balance of costs and reimbursements requires a crystal ball of its own.
While it’s not official yet, it is very likely that the Legislature will come in for a day at the end of March to allow bills to be filed and then further recess its regular session until about Easter — with the caveat that the stay-at-home orders might be extended, and a return date is thus uncertain.
An April 8 meeting of the Revenue Estimating Conference, a committee of top state leaders, may or may not be held, and even if it were to be, economists Greg Albrecht and Manfred Dix will have to be forecasting magicians at that time to give us a number.
The crisis is not over, but clearly agencies — state, federal, nonprofit, businesses — have to juggle and guesstimate and above all act in the public interest. The accounting will come later.