DALLAS - The Louisiana Revenue Estimating Conference has endorsed a revenue projection for fiscal 2010 that increases the expected $1.27 billion revenue shortfall by an additional $30 million.
The four-member board accepted the revenue estimate of Greg Albrecht, chief economist for the Legislative Fiscal Office, rather than one developed by David Hoppenstedt of the Division of Administration that projected an additional $153 million drop in revenue next fiscal year, which begins July 1.
The official estimate will be used by the Legislature in developing the final budget for fiscal 2010. Gov. Bobby Jindal's proposed operating budget for fiscal 2010 totals $27 billion.
The new $1.3 billion estimated drop in revenues for next year replaces the one adopted in February that projected the $1.27 billion decline from fiscal 2009.
Albrecht said the long-range forecast calls for state finances to stabilize in fiscal 2011.
"That will be the turn-around year," he said. "We are expecting a revenue increase of about $120 million in 2011, with increases in the neighborhood of $300 million in 2012 and 2013."
Albrecht and Hoppenstedt said personal income taxes remain relatively healthy, but both warned of continued declines in revenues from corporate income taxes, severance taxes on oil and gas production, and sales taxes.
Albrecht predicted a decline in sales tax revenue of $59 million in fiscal 2010, while Hoppenstedt said revenue would drop by $114 million from fiscal 2009 collections.
Residents have not cut back their spending as much as consumers in some other states have, according to Albrecht.
"The sales tax decline is going to accelerate, but we haven't seen the sharp declines in spending that we've seen across the country," he said. "We still have positive growth in employment, in contrast to most other states."
The February estimate said sales tax collections would total $222 million a month, down from $240 million a month in fiscal 2009. The new estimate is for monthly collections to average $217 million.
Mineral severance and production taxes make up about 17% of annual state revenue, with sales taxes contributing 24% and personal income taxes generating 26% of total collections.
"Severance tax collections in July and August will be about half of what they were in 2008, when we had oil selling for more than $140 a barrel," Albrecht said.
Hoppenstedt said tax collections were expected to drop as the rebuilding from the hurricanes of 2005 tapers off, but the decline has occurred quicker than expected.
"Instead of going gradually back to where we were before Hurricane Katrina, a bunch of that dropped out in April," he said. "Now we are close to where we were seven years ago."
House Speaker Jim Tucker is chairman of the Revenue Estimating Conference. Other members include Commissioner of Administration Angèle Davis, Senate President Joel T. Chasson 2d, and Jim Richardson, a professor of economics at Louisiana State University.
