DALLAS — A $77 million revenue gap in Louisiana’s current budget was acknowledged Wednesday by a new financial forecast adopted by the Revenue Estimating Conference.
The panel of high-ranking legislators and state officials opted for the Division of Administration’s revenue outlook, which predicted $77 million less revenue than the most recent official forecast it accepted in March.
That outlook outlined by division economist Manfred Dix was chosen over the rosier view from Greg Albrecht, chief economist of the Legislative Fiscal Office, who said he expected a revenue shortfall of only $14 million.
The panel left the outlook for fiscal 2012 general fund revenues at $8.26 billion.
Albrecht said the personal income tax was not performing to expectations, while sales tax revenues were better than expected. The LFO outlook for fiscal 2011 reduced personal income tax collections by $130 million, but raised sales tax revenue by $84 million.
Personal income tax collections in the first nine months of fiscal 2011 totaled $1.7 billion, Dix said, while the official forecast puts collections at $2.6 billion for the year.
“There’s no way we’re going to make up that $900 million,” Dix said.
House Speaker Jim Tucker, a member of the revenue panel, said he was disturbed to learn of the potential revenue shortfall so late in the fiscal year.
“What you just said scared me to death,” Tucker told Dix. “It could be even worse.”
The revenue conference rejected Albrecht’s suggestion that the March forecast be maintained, and neither projection be adopted. He said that would allow the Legislature to use the March projections until more complete revenue figures are available in June.
Even though collections in some areas are anemic, Albrecht said, Louisiana’s economy is improving.
“We are in recovery, even though we are talking about downgrades in the forecast,” he told the panel. “At this time of year, we’re usually talking about raising the projections.”
Tucker said the Legislature would have to resolve a revenue shortfall before the fiscal year ends June 30. The current session is set to end June 23.
“We can’t wait until June,” he said. “It would be too late.”
Debate is to begin in the Legislature next week on Gov. Bobby Jindal’s proposed $24.9 billion operating budget for fiscal 2012.
Lawmakers can only appropriate the expected revenues certified by the Revenue Estimating Conference.
At the March meeting, the panel adopted a revised revenue outlook for fiscal 2011 of $7.83 million. That was an increase of $112 million from the official estimate in June 2010.
The revenue panel is chaired by Senate President Joel Chaisson 2d. Members include Tucker, Division of Administration commissioner Paul Rainwater, and economics professor James Richardson of Louisiana State University.