According to Louisiana’s Constitution, during even-numbered years, like 2016, Legislators cannot introduce bills to create or raise taxes. That is, unless a special session is called, like the one expected to begin in mid-February.
"There’s still a lot of uncertainty about the budget for this year. And then you have to look ahead to 2017," says LSU economist, Dr. Jim Richardson. He addressed the House last week, giving them a run-down of the state’s budget problem. The first order of business is fixing the current budget, which is short an expected $750 million.
"The three primary sources of revenue - income taxes, sales taxes and the price of oil - down in November, a little worse in December. The fiscal experts are telling us it doesn’t look like it’s going to get much better," explains Jay Dardenne, Governor Edwards' Commissioner of Administration.
According to December numbers recently released by the State Treasurer, total net state revenue was $3.49 billion for 2015-2016. That’s fifteen percent less than it was the previous year.
Patrick Goldsmith, Director of the House Fiscal Division, then brought the attention to next year’s budget, short an estimated $1.9 billion, which will be debated during the regular session. But any revenue-raising measures for that budget are going to have to be introduced during the special session.
"When the Governor presents his budget, which has to be balanced," says Goldsmith, "that $1.9 billion will be fixed somehow. We don’t know which way it will go, but you can assume it will be a mix of revenue proposals, and also some reductions."
Looking at the revenues, says Dr. Richardson, "there is an issue, there is a structural imbalance that we have to somehow deal with. If we’re going to do it with any taxes, we’re going to look at income and sales. That’s where the money is."
The Executive Budget for 2017 must be presented to the Legislature prior to the special session.