Saturday, May 25, 2024

Louisiana panel increases forecast for how much money lawmakers can spend

by BIZ Magazine

By David Jacobs | The Center Square

The Louisiana panel that decides how much money lawmakers can spend raised the state’s revenue forecast Tuesday, giving the Legislature more money to work with during the last few weeks of their session.

The Revenue Estimating Conference raised the official estimate for the current budget year by $357 million and increased by $320 million in general fund money for the fiscal year that begins July 1. State economists said the higher forecasts reflect how cautious they had been previously amid the pandemic-related uncertainty, not a booming economy.

“I had cold feet,” Legislative Fiscal Office Chief Economist Greg Albrecht said. “My feet are very hot now. In just a few months, things have turned pretty dramatically.”

Albrecht and Manfred Dix, the chief economist for the executive branch, said their new projections still might be fairly conservative and were more likely to turn out to be lower than actual collections than higher.

“I don’t think there will be any shortage of suggestions about how we spend the money,” Commissioner of Administration Jay Dardenne, who represents Gov. John Bel Edwards on the REC and is the administration’s top budget official, said after Tuesday’s meeting.

The current version of the state’s K-12 education formula calls for $800 raises for teachers and $400 for support workers. Dardenne said he expected “broad consensus” in favor of increasing the salary bumps to $1,000 and $500, respectively.

The Democratic governor and Republican legislative leaders agree the state should shore up the fund that pays for unemployment benefits, which was tapped out during the pandemic. How much they will put into the fund remains to be decided.

Another big-ticket item Senate President Page Cortez pointed to is the state’s cost share for a multibillion-dollar flood and hurricane protection system in southeast Louisiana. State officials may borrow money to make a $400 million payment due in September but could save money by paying for at least some of the debt in cash.

Lawmakers already are relatively flush with cash compared with prior years thanks in large part to federal aid, which might help explain why the main spending bills are moving faster than usual. The federal American Rescue Plan will send a little more than $3 billion to the state, which lawmakers plan to use for one-time expenses.

Senators began discussing the state budget Monday. Cortez said he tried to move up the schedule so that lawmakers will have more time to work out any differences between the chambers before the session deadline of 6 p.m. June 10.

“It’s funny how when you have less money, you have more issues,” he said. “When you have more money, you have less issues.”

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