More holes appearing in the current state budget Monday, Aug 31 2015
Leges viewing the state’s economic picture
Following the 2015 Regular Session, many wondered how the leges had erased a $1.6 Billion revenue shortfall by increasing taxes and fees in the neighborhood of $800 Million without eliminating any existing programs.
It seemed too good to true; it was.
Barely six weeks into the current fiscal year we learned the Division of Administration had miscalculated the anticipated revenues from the new taxes passed to “save Higher Education.” To nobody’s surprise Higher Education took the first cut of a $3.8 Million before fall classes even begin.
At the same time we learned the projected shortfall for next fiscal year (FY17) is already $713 Million. In the 2019 FY the shortfall grows to $1.9 Billion.
The leges are refusing to admit, much less address an obvious $250 Million shortfall in mineral revenues.
Friday morning, we learn that TOPS has been under funded by $19 Million. ( Story here.)
As the fiscal year progresses we will learn estimated savings from efficiencies and accounting gimmicks, property sales, etc. used to “balance the budget” will not materialize. All will have to be added to projected shortfall for the 2017 FY.
Despite major layoffs at the local headquarters of Chevron and Shell in addition to the loss of hundreds of production jobs in the “Oil Patch” Team Jindal tells us they are optimistic that the new and existing tax revenue will come in at higher rates to offset the hundreds of millions of dollars in revenue lost by the precipitous drop in oil prices.
Despite Team Jindal’s baseless claims, the leges are more than happy to use the ‘fig leaf” of wishful thinking to refuse to take action to mitigate the next fiscal crisis. After seven years of blinding following Team Jindal into the fiscal abyss the leges have failed to object to the same wishful thinking that has created a 7-year growth in the structural deficit.
Based on recent comments by so-called lege leaders, it is clear that the “fiscal can” will once again be kicked down the road until at least mid-January. We are supposed to believe the fiscal problem that couldn’t be fixed in 8 years can miraculously fixed in a 30-day Special Session before next March.
The path of least resistance (always taken by the leges) will be to pass hundreds of millions of dollars in new “temporary” taxes many of which will be retroactive. These tax increases will only serve to retard the economic growth we are told is the the ultimate solution.
Meanwhile, leadership at the state level appears oblivious to the conflicting economic forces at work. If they do see it, they aren’t speaking out abut it much less working on solutions.
1 7:00 am