DALLAS — Louisiana lawmakers and Gov. Bobby Jindal must fill a $319 million revenue gap in the fiscal 2010 budget in less than three months following the latest revision in expected revenues.
The Revenue Estimating Conference on Wednesday adopted a new forecast of $7.54 billion in fiscal 2010 general fund revenue, down from the four-member group’s estimate of $7.86 billion in December. That estimate was $197 million lower than projected in the one developed in May 2009.
The estimate for fiscal 2011, which begins July 1, was lowered by $244.7 million to $7.78 billion. In December, the group said it expected $8.02 billion of general fund revenue in fiscal 2011.
The state must balance the budget through more cuts or additional revenue before the fiscal year ends on June 30.
Jindal said he does not have the statutory authority to balance the current budget through spending cuts without action by lawmakers. The Republican governor ordered agency budget cuts of $248 million in December to comply with the revised revenue estimate but said that is not an option now because the Legislature is in session.
“I could act then, in some cases with an executive order and in some cases with approval from the Legislative Budget Office,” Jindal told reporters at a news conference. “I don’t have that authority to reduce spending to balance the budget at this stage. The situation has to be resolved through legislative instruments.”
House Speaker Jim Tucker, R-Algiers, said it would be difficult to balance the budget in the relatively short time left in fiscal 2010.
“It’s much easier to deal with a problem over 12 months than over 10 weeks,” he said.
State officials had been anticipating a serious revenue shortfall since last month, after February tax collections did not meet December’s revised revenue estimate for the remainder of fiscal 2010. The Revenue Estimating Conference waited until March numbers were available to develop the official prediction that lawmakers will use to develop the budget for fiscal 2011.
Greg Albrecht, chief economist for the Legislative Fiscal Office, said annual state general fund revenue has fallen $2.6 billion since the peak of $10.17 billion realized in fiscal 2008.
“The national recession has hit fiscal 2010 in a big way,” Albrecht said in his presentation to the revenue conference. “After three post-hurricane years of substantial revenue growth, general fund revenue fell by $783 million during fiscal 2009 and is projected to fall by another $1.8 billion in fiscal 2010.”
Albrecht said he still expects Louisiana’s economy to rebound in fiscal 2011 and then stabilize.
“The news overall is negative, but I’m hoping it will be positive soon,” he said.
“While the strong growth surges or step-ups in revenue experienced in fiscal years 2004 to 2008 are not likely to recur again, the forecast has reasonable growth in it for fiscal 2011 and accelerates into fiscal 2012 and beyond,” Albrecht said.