DALLAS — State economists told the Revenue Estimating Conference on Friday that Louisiana’s budget deficit for fiscal 2010 has ballooned by another $261.4 million from April’s revised lower estimate.
However, the four-member conference was unable to certify the latest estimate, which brings the estimated general fund revenue shortfall in the $28.7 billion operating budget for fiscal 2010 to $580 million.
House Speaker Jim Tucker, R-Terrytown, a member of the revenue conference, stopped the certification because he objected to a third revision in the fiscal 2010 estimates just one week before the Legislature is set to recess on June 21.
The latest official estimate, which the conference certified two months ago, is for a $319 million shortfall.
Greg Albrecht, chief economist for the Legislative Fiscal Office, also lowered the revenue forecast for fiscal 2011 by another $57.6 million, bringing the projected shortfall in next year’s proposed $25 billion operating budget to more than $300 million.
The revenue conference lowered its forecasts for fiscal 2010 in December 2009 and again in April.
The conference consists of Tucker, Senate President Joel Chaisson, D-Destrehan, economist Jim Richardson of Louisiana State University, and commissioner of administration Angèle Davis, who is Gov. Bobby Jindal’s chief budget officer.
The supplemental budget bill currently under consideration was developed to deal with a $319 million shortfall, but Tucker said there is no need to certify the latest revenue estimate before the actual collections for fiscal 2010 are known.
Louisiana’s constitution requires the state to balance the fiscal 2010 budget by the end of fiscal 2011, not the end of 2010, Tucker said.
With such a short time left in the legislative session, he said, it would be more effective to wait until actual revenue figures are obtained once the fiscal year ends before deciding whether to deal with the shortfall through budget cuts or the use of the budget stabilization fund.
“I’m not trying to ignore the problem, but we don’t know what the problem is at this point,” Tucker said. “We’ll have the hard numbers after the books are closed.”
“I feel like we’re playing darts in the dark,” he added.
The revenue conference was unable to certify the latest estimates because all actions must be unanimous.
Under questioning from Tucker, Albrecht said he could not be certain that the revenue decline would not be worse than his current estimate when the fiscal year ends June 30.
“It could be worse,” Albrecht said. “I’m not very confident in the numbers. Obviously we have been dramatically wrong this fiscal year.”
Davis and Chaisson urged Tucker to accept the report, but he adamantly refused.
“This is the largest moving target in Louisiana history,” Tucker said of the revenue estimates. “This is something we have never faced before, and I’m not ready to recognize this today.”
Albrecht said his latest estimate takes into account a continuing slide in income tax payments, both personal and corporate.
He said personal income tax collections would be 25% lower this year than in fiscal 2009 as a result of lower economic activity and a reduction in the withholding rate. Corporate income taxes will be down by 70% to 75% from 2009, he said,.
“Once again, it is very disappointing news,” Albrecht said. “I thought we were bottoming out, but it seems like there is still a bottom to go.”
Albrecht said the state has seen general fund revenues fluctuate widely in recent years.
“From fiscal 2005 to 2008, we saw an increase in the state general fund collections of $2.77 billion,” he said. “In the last two years, we’ve seen a decline of $2.88 billion.
“That’s the roller-coaster ride we’ve been on for five years.”
