State revenue forecast unchanged by REC despite higher oil price - FOX 8 WVUE New Orleans News, Weather, Sports, Social

State revenue forecast unchanged by REC despite higher oil prices, tax hikes

Revenue Estimating Conference meets at State Capitol.  (FOX 8 Photo) Revenue Estimating Conference meets at State Capitol. (FOX 8 Photo)
BATON ROUGE, LA (WVUE) -

State lawmakers who hoped for better news about the state’s revenue picture did not get it Thursday.

The state’s revenue forecasting panel met at the state capitol, but agreed that a hike in oil prices and a recent increase in the state sales tax higher sales tax have not had enough impact to shrink the massive budget shortfall for the incoming fiscal year.

"We thought with the price of oil going up that maybe there would be a little bump, and it was but it seems like the production is down,” said Sen. President John Alario, R-Westwego.

And state government’s bank account continues to feel the effect.

Legislative Fiscal Office Chief Economist Greg Albrecht addressed the Revenue Estimating Conference which is made up of the senate president, house speaker, the governor’s commissioner of administration and an independent LSU economist.

"Most of my drop in the current fiscal year is royalties, nearly $27 million dollar drop in royalties. We've had three months where the numbers were so low, $9 million, $7 million, $9 million, you'd have to go back in the seventies to get monthlies like that on a regular basis,” said Albrecht.

Pain in the petrochemical industry has a ripple effect.

"Which affects personal income, it affects sales taxes, it affects a lot of the buckets of our revenue that we deal with,” said House Speaker Taylor Barras, R-New Iberia.

"There is individual income tax drop, sales tax drop, both of those are just the end of this year weakness that's going to bleed over, it's bleeding over into bigger drops in the subsequent fiscal year, FY '17 and beyond,” said Albrecht.

The REC members decided not to change the current revenue forecast which leaves the state hundreds of millions short of funds to cover state services in the fiscal year that begins July 1.

"April is the one of the first months of the newer sales tax changes we made, so those new numbers are not in yet,” said Barras.

"We  know that based upon the revenue estimating committee, commission's actions that we have a $600 million dollar hole, and we have to fill that now, not later,” said Commissioner of Administration Jay Dardenne.

But despite what came out of the REC's meeting, some state lawmakers remain strongly opposed to another special session in June, as Governor John Bel Edwards intends.

"Oh, absolutely. The $600 million, it's not a deficit, it's a $600 million dollars less what the administration would like to spend,” said Rep. Cameron Henry, R-Metairie. Henry is chairman of the House Appropriations Committee.

Henry questions whether the governor has even crafted a serious agenda for another special session.

"Just having a session to say that you're having a session is a waste of taxpayers' money,” he said.

But longtime legislative leader John Alario said calling lawmakers into another session is necessary.

"I think we're going to need to have a special session to try to address those needs,” he said.

Some legislators would prefer a special session in the fall because more information would be available on the impact of recent tax hikes.

“I think the earlier session, the more that we will be dealing on forecast numbers, more than dealing on real numbers, and I know that makes a lot of our members a little concerned about that,” said House Speaker Barras.

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