DALLAS — A revised revenue outlook will require Louisiana to cut spending by $210.5 million through June and reduces the money available for lawmakers to appropriate in fiscal 2013 by almost $304 million.
The official revenue forecast for fiscal 2012, which was adopted Tuesday night by the Revenue Estimating Conference, combines reports with widely varying expectations.
One was developed by Gov. Bobby Jindal’s Division of Administration and one came from the Legislative Fiscal Office.
Manfred Dix, chief economist with the state’s Division of Administration, predicted a revenue shortfall this year of $270 million, while economist Greg Albrecht of the Legislative Fiscal Office lowered his revenue expectation by $107 million.
Lawmakers must use the panel’s official estimate for fiscal 2013 revenues to develop next year’s budget, which will go into effect July 1.
Jindal has proposed a $25.5 billion budget.
The Legislature’s session is slated to end June 4.
Another meeting of the Revenue Estimating Conference is expected to May, where the forecast could again be revised.
Paul Rainwater, Jindal’s chief budget aide and his representative on the panel, said state agencies had been advised of the need to cut spending before June 30, the end of fiscal 2012.
“Obviously, we’re going to have to make reductions,” Rainwater said at Tuesday’s session. “We’ll have a balanced budget at the end of the year.”
Jindal said he would work with the Legislature to ensure the budget is balanced in light of the new revenue outlook.
“We’re going to have to set real priorities as a state,” he said at a news conference following the revenue panel’s decision. “It’s what every family, every business has had to do in the national recession.”
Jindal said changes to his plan to reform the state’s pension systems would add an unexpected $80 million to the 2013 budget, but predicted that debt service savings from the refunding of existing state bonds would make up the difference.
In his report to the revenue panel, Albrecht said his estimate for lower-than-usual growth in collections from the state individual income tax has proved to be “embarrassingly high.”
The latest figures indicate the income tax will generate almost $190 million less than earlier predicted.
“Things have not panned out nearly like we would have expected,” Albrecht said.
“The problem is the economy,” he said. “I don’t even know what a normal year looks like anymore.”
Sluggish growth in sales tax collections is a real-time indication of a slow economy, according to Albrecht.
“It’s a picture of an economy that is stalling,” he said.
