BRADENTON, Fla. - Amid a partisan difference of opinion over state funding priorities, Louisiana lawmakers may be headed into overtime.

With less than a week until the regular session ends, Gov. John Bel Edwards called a special session to continue work on the fiscal 2018 spending plan that, in its current form, he has called a “non-starter.”

Edwards, a Democrat, said he called the special session as a “precautionary measure” because legislators have yet to reach agreement on House Bill 1, the state operating budget, HB2, which would authorize new capital spending, and HB3, the omnibus bond bill.

Louisiana Gov. John Bel Edwards
Louisiana Gov. John Bel Edwards Southwest Louisiana Economic Development Alliance

“The work before us for the next week is critically important, and I’m asking members of the legislature to work with me to adopt a responsible budget that adequately funds the state’s priorities,” Edwards said Wednesday.

The special session will convene at the conclusion of the regular session June 8 and run through June 19, if needed.

The Republican-led House passed a $28 billion general fund budget that makes sharp cuts in health care, children’s and veterans programs, and corrections.

The House GOP budget also leaves more than $200 million unallocated in case mid-year cuts are necessary due to lower-than-anticipated revenue collections, which have been an ongoing problem.

The Senate is still working on its version of the budget, and a stalemate appeared to be emerging with the House over the $200 million set-aside.

The House has sent the Senate its version of the capital outlay budget for fiscal 2018, authorizing a total of $3.5 billion of construction for local and state priorities, including transportation.

The House was still considering a companion bond bill authorizing $1.99 billion in new debt Thursday.

Edwards said that he called the special session because the notice must be published seven days in advance.

“Should we come to an agreement on the operating and construction budgets, this special session will not be necessary,” he said.

The governor has said he may veto the budget if the final spending plan resembles the House’s version.

In addition to disagreement over the budget, this year’s legislative session has not been as productive as Edwards and some lawmakers had hoped.

Most of the tax reforms the governor proposed were rejected by lawmakers in the House, where budget and tax-related measures must be considered first. No alternative bills have been filed.

Edwards had said that his bills were meant to restructure the state’s tax code while generating additional revenue to stabilize the budget and counter the loss of more than $1 billion in temporary taxes that will expire at the end of fiscal 2018.

On Wednesday, Edwards said his call for a special session was not intended to address next year’s so-called “fiscal cliff.” He did not indicate if he would call a separate legislative session to deal with that issue.

Along with tax reform, a measure designed to raise new revenue for transportation projects also failed to gain traction this year.

Rep. Steve Carter, R-Baton Rouge, filed a bill that would have raised the gas tax as much as 17 cents per gallon but he withdrew the measure Wednesday after lawmakers indicated it would not receive the required votes to pass.

Louisiana lawmakers could face a $1 billion gap while developing the fiscal 2019 budget during their session next spring, if state revenue collections do not improve and there's no replacement for expiring taxes.

Rating agencies have already cut the state’s general obligation rating citing a multi-year structural imbalance and unwillingness to raise revenues. Analysts have also warned that further downgrades are possible.

S&P Global Ratings lowered the state's GOs to AA-minus from AA in March, and maintained a negative outlook.

Fitch Ratings downgraded the state to AA-minus from AA, and maintained a stable outlook last year, while Moody's Investors Service cut its GO ratings to Aa3 from Aa2, and assigned a negative outlook.

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