BATON ROUGE (AP) — Gov. Bobby Jindal will need to slash state spending to keep this year's $25 billion budget balanced, as plummeting oil prices that are helping drivers at the gas pump have hammered Louisiana's revenue.
The state's income forecasting panel, known as the Revenue Estimating Conference, on Friday lowered revenue projections by $171 million for the current budget year that ends June 30.
Economists blamed lower-than-expected severance taxes and mineral royalties because of falling oil prices for more than $93 million of the reduction, combined with anemic personal income tax growth.
"It's not happy news," said Senate President John Alario, R-Westwego.
Lawmakers will officially recognize the deficit next week. Then, Jindal has 30 days to decide where he'll cut. He's limited in how much he can slash across state agencies, and if he wants to go beyond those limits, he needs legislative approval.
As always, the largest areas of discretionary spending — and therefore, the most vulnerable to cuts — are health care services and public colleges.
The governor's top budget adviser, Commissioner of Administration Kristy Nichols, said she doesn't expect to have to cut the full amount to rebalance the budget. She said an existing freeze on nonessential spending across most state agencies, combined with other savings and "revenue opportunities" could help offset some of the deficit.
"I think you will see that the end result is likely to again continue to protect some of those key service areas like in Medicaid and higher education and really look at administrative savings that don't affect the people that we serve," Nichols said.
The forecasting panel also cut next year's projections by $201 million.
The grim revenue news only worsens Louisiana's budget woes. The state spent $141 million more last year than it brought in, and next year's shortfall is now pegged at $1.4 billion.
It's the sixth time in seven years that the Jindal administration has to make midyear cuts to rebalance the state budget. For the last fiscal year, the administration only avoided cuts by using money from a recent tax amnesty period to plug a deficit.
If a current tax amnesty period that wraps up Friday brings in additional dollars beyond the $100 million already anticipated for this year's budget, the extra money could be used to fill in part of this year's deficit.
– by AP Reporter Melinda Deslatte
