BRADENTON, Fla. - Louisiana lawmakers remain at odds with Gov. John Bel Edwards over revenues to fund the governor's "critical" state programs in fiscal 2017 as a special session winds down this week.
The ongoing discord comes amid a widening state deficit.
State economists now say that the current budget year, which closes June 30, is expected to end at least $200 million short of being balanced due to lower-than-expected general fund collections.
"That [shortfall] gets rolled into the next fiscal year and that deficit has to be addressed first as far as payments in the new fiscal year," Edwards spokesman Richard Carbo told The Bond Buyer on Monday.
Legislators, who are scheduled to adjourn their three-week session Thursday, remain focused on the projected $600 million deficit anticipated in the fiscal 2017 budget, a figure that does not include the new current year gap.
In addition, few of the Edwards-backed revenue-raising bills made it to the governor's desk by Monday.
Bills passed to date close about 37% of the gap needed to prevent what Edwards has called "unnecessary" cuts to state programs, such as the popular Taylor Opportunity Program for Students college scholarship program.
On Sunday, the House struck down yet another piece of "major" legislation that would have reduced the amount of federal income tax deductions that taxpayers can take on their state income taxes to 57% from 100%.
The lower chamber voted 47-55 to kill House Bill 38, which would have raised about $97 million.
Louisiana is one of four states that allows 100% of federal deductions to be taken on state taxes.
While Carbo said the bills passed so far raise revenues far "less than we had hoped for," Edwards is continuing to meet this week with lawmakers on measures to stabilize the budget, although only two bills remain to be considered.
Both measures limit corporate tax credits and would increase state funds by about $70 million.
If both bills passed in the next few days, a gap of about $290 million would remain in the 2017 budget.
Carbo also said another problem complicates the state's efforts to estimate general fund revenues, which have been a moving target.
Some 36 parishes remain under a presidential disaster declaration from severe flooding earlier this year.
The federal declaration combined with state disaster rules give affected taxpayers additional time to file their state income taxes, he said, adding that those filings impact revenues anticipated in the current fiscal year but state officials don't know how much.
What they do know is that last week a state economist predicted that corporate income and franchise tax filings will be about $200 million less than anticipated in fiscal 2016, which accounts for the rollover deficit.
Although Louisiana has enacted several measures to increase revenue and stabilize the budget, two major bills passed earlier this year to close partial deficits expire in two years, including a 1-cent increase in the state sales tax. That means uncertainty about incoming state revenues will continue for some time.
Louisiana's budget imbalance has already taken a toll its general obligation ratings.
Earlier this year, Fitch Ratings downgraded the debt to AA-minus from AA, and Moody's Investors Service lowered its GO ratings to Aa3 from Aa2 while maintaining a negative outlook. Fitch has a stable outlook.
Standard & Poor's continues to rate the GOs AA with a negative outlook.
