BRADENTON, Fla. - Louisiana legislators remained far short of closing its current-year deficit as the end of a special session neared.
Gov. John Bel Edwards said lawmakers failed to make the cuts necessary to balance the budget, and in a
Estimates place the total gap for the fiscal year ending June 30 as high as $200 million, while actions have been taken to address some of the $2 billion hole in the fiscal 2017 budget.
The three-week special session called by Edwards ends at 6 p.m. Wednesday.
While lawmakers have adopted some measures that increase revenues, the budget cuts necessary to cure the pending deficits have fallen short, according to Edwards.
Failure to work out a deal to right-size the current budget will force drastic cuts leading to layoffs and furloughs at state universities, and other measures, he warned in a release late Monday night.
The state would also be forced to trim 17% from the budget that supports a public private partnership that operates the state's 10 safety net hospitals.
Edwards said the privately-managed boards of two of the hospitals have said they would consider ending the contracts with the state if the cuts are imposed.
"We will be here working until the very end to solve this problem, but if some members refuse to accept this reality they should be prepared to defend these cuts to their constituents," he said.
Lawmakers on Tuesday continued to consider sin taxes as part of the package to reduce the deficit, and have already agreed to increase the tax on tobacco by 22 cents.
Another measure to increase the alcohol tax was being debated.
A bill increasing the state sales tax to five cents on the dollar from four cents for a temporary period has been approved.
Upon Edwards' signature, the sale tax hike would go into effect April 1 and is expected to raise about $210 million in new revenue for fiscal 2016 and $880 million for fiscal 2017.
Proposals to remove some sales tax exemptions were still being considered.
Legislators will be back in Baton Rouge for their regular session starting Monday, and running through June 6.
Moody's Investors Service on Feb. 26 cut the state's general obligation bond rating to Aa3 from Aa2 due to deteriorating revenue collections and the impact years of structural imbalance have placed on the state's reserves and liquidity.
