‘State to begin preparing $198 million in additional budget cuts’

The Times-Picayune reports:

The panel that watches over the flow of state revenues said Wednesday that collections are off by about $198 million this year, forcing cuts in the budget adopted by lawmakers last spring. The Revenue Estimating Conference voted 4-0 to accept the lower estimates prepared by the Legislative Fiscal Office, the arm of the Legislature that tracks economic activity and tax revenues.

Current estimates “appear to be too high,” fiscal office chief economist Greg Albrecht told the panel. He said the biggest shortfall is in the state’s collections of personal income tax, which is off about $142.5 million from earlier projections.

The oil and gas severance tax followed it closely, Albrecht said, down about $128.5 million from what had been projected.

Other areas of state revenues were holding up, such as the state tobacco settlement and sale of lottery tickets. Vehicle sales taxes also are running about $15 million ahead of projections.

The downturn in the numbers means the governor has 30 days to bring the budget in line with the new revenue estimates.

More.

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LDR News Release – Department of Revenue eliminates contracts in mid-year budget adjustment

BATON ROUGE – The Louisiana Department of Revenue (LDR) is eliminating more than $1 million dollars in professional services contracts as part of an across-the-board 7.56 percent mid-year reduction for every state agency.

This adjustment eliminates $1,060,656 in contracts primarily to augment LDR’s information technology staff. The figure represents a 7.56 percent reduction in the $12.7 million in general fund monies that LDR received this fiscal year.

Previous cost-cutting measures included the closures of some LDR regional offices, employee layoffs, and expanded reliance on electronic customer service applications.

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Governor Jindal to Hold Press Conference Outlining Action to Address the Mid-Year Shortfall

Today, Governor Bobby Jindal will hold a press conference in the Governor’s 4th Floor Press Conference Room to outline action to address the state’s mid-year shortfall.

    WHO: Governor Bobby Jindal

    WHAT: Governor Jindal holds press conference outlining action to address the state’s mid-year shortfall

    WHEN: TODAY, Tuesday, December 22
    3 PM

    WHERE:

      Governor’s 4th Floor Press Conference Room
      LA State Capitol
      900 North 3rd Street
      Baton Rouge, LA

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Report: ‘Tax revenue drop causes $197M La. budget deficit’

Louisiana’s Revenue Estimating Conference forecast a sharp reduction in state revenues for the rest of this fiscal year and into the next.

From the Associated Press:

Louisiana’s revenue forecast dropped $197 million Thursday, driven by plummeting state sales taxes as shoppers shut their wallets and businesses shrink spending in the tight economy.

The state income projecting panel, the Revenue Estimating Conference, revised tax collection estimates sharply downward for the current fiscal year that ends June 30, continuing a recent trend of forecast revisions to reflect drops in tax collections.

Thursday’s changes create a deficit in the $29 billion budget that must be closed in the coming weeks.

Economist Greg Albrecht said sales tax revenue has slumped, and the uptick in severance and royalty money from oil prices isn’t enough to combat it. Albrecht, the chief economist for the Legislative Fiscal Office, said he projects a more than 14 percent decrease in sales tax collections compared to last year — and he said that could get worse.

“There’s just a massive retrenchment of spending for households and businesses,” said Albrecht, whose revenue projections were selected by the conference as the official forecast. “People just aren’t spending.”

Estimates of business tax collections also were cut, along with revenue from gambling taxes.

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Report: 'Bill advances, would raise limit for cuts'

From The Advocate:

Legislation aimed at increasing the amount of cuts lawmakers can make in a deficit year and being able to make those cuts every year passed the Louisiana House on Monday.

Senate Bills 1 and 2, sponsored by Senate President Joel Chaisson II, D-Destrehan, withstood many questions as the Legislature came up against one of the deadlines for bill consideration.

SB1 is a proposed constitutional amendment that would allow up to 10 percent — rather than the current 5 percent — of each state statutory dedication to be cut when there is a budget deficit. Anything in excess of 5 percent would have to be approved by the Legislature.

If approved by a two-thirds vote of the Legislature, the state’s voters would have to concur in an October 2010 election.

 

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Editorial: 'Stretch funds for campuses'

An editorial in the Baton Rouge Advocate urges lawmakers to delay implementation of the expansion of an income tax deduction. The paper’s opinion staff says the state needs the revenue can relieve budget pressure on Louisiana’s institutions of higher learning.

The Baton Rouge Area Chamber is hardly alone in looking down the road and seeing potentially harder times for state colleges and universities. But the chamber deserves credit for tackling the politically sensitive issue head-on, calling for a delay in a scheduled tax cut for three years while the impact of revenue declines can be assessed.

We need more common-sense leadership in this crisis than we’ve been getting from elected officials, from Gov. Bobby Jindal on down. Endless bleating that delaying a tax cut amounts to a tax increase is not only transparently false but ignores the obvious: Legislators phased in the tax cut, and it should properly be reassessed in light of the decline in state revenue.

The chamber’s program for the future includes not only a tough-minded approach to recurring revenue but greater authority for colleges to raise tuition and fees without periodically crawling to the State Capitol for a two-thirds vote of the Legislature.

Read more.

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Report: 'Showdown on cigarette taxes, unemployment benefits today at Capitol'

The Times-Picayune’s Jan Moller previews the action expected Monday in the legislature.

As ever, the question is, “how to fund state government?”

By the time the House adjourns this evening, one of the following will almost certainly be true:
a) The (not so) great tax debate of 2009 will be pretty much done with after House Bill 889, which would raise cigarette taxes by 50 cents a pack, fails to get the 70 votes needed to send it to the Senate.

- Or -

b) The debate will be very much alive after the bill by Speaker Pro Tem Karen Carter Peterson, D-New Orleans, goes to the Senate with enough votes to override an expected veto from Gov. Bobby Jindal.

While most of the smart money is on option (a), the smart money hasn’t always been right this session, as everyone learned Thursday when the House unexpectedly ratified the Senate’s version of the $28.7 billion state budget and threw the state spending picture into the kind of disarray we haven’t seen for several years around the Capitol.

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