BATON ROUGE, LA (WVUE) - State government is worse off than first thought, with revenue from various taxes significantly lower.
"Income, sales, corporate and minerals are all diminished substantially," said Dr. Jim Richardson, an economist who chairs the state's Revenue Estimating Conference that includes state House and Senate leaders, as well as Commissioner of Administration Jay Dardenne.
"For all practical purposes, Louisiana is in its own recession. I mean, it's an oil-based recession," said Greg Albrecht, chief economist with the Legislative Fiscal Office.
"He used the 'R' word. He said the state's in our own recession right now. This isn't the annual budget cut that needs to be cured," said FOX 8 political analyst Mike Sherman, .
The shortfall for the current budget year is now put at $870 million, up from the $750 million Gov. John Bel Edwards initially said he inherited from the Jindal Administration. The bad news about state finances comes a day before Edwards takes to the airwaves to talk about the crisis.
"We expect what comes up in this special session to be painful, so the governor's got to lay the foundation. What we expect him to do tomorrow is tell folks just how bad this problem is," Sherman said.
In response to the larger budget hole, the governor issued a statement which said, in part: "This is a fiscal crisis, the likes of which we have never seen. We will come through this together, but we have reached the end of the road where cuts alone will work to solve this problem."
The special legislative session called by Gov. Edwards begins Sunday at the State Capitol.
Edwards proposes hiking the state sales tax by a penny in the short run to help the budget situation.
"All that talk about fixing tax loopholes, good talk for next year's budget. To cure this mid-year budget deficit, only two ways to do it: deep, deep cuts, or new taxes like the sales tax that could take effect immediately," said Sherman.
Republican Rep. Cameron Henry of Metairie is chairman of the powerful House Appropriations Committee. He said the governor's tax proposals will face pushback.
"I think revenue raisers to start off with are probably going to be a little difficult. I think members want to see cuts first," said Rep. Henry.
"This is going to be an especially bloody session because we've got a philosophical divide between the governor who is okay raising taxes, raising revenues and a House run by conservatives who are philosophically opposed to many types of new revenue," Sherman stated.
Top staffers of the governor's administration will present his first executive budget to state lawmakers on Saturday, a day before legislators begin the special legislative session.