The state’s Revenue Estimating Conference met Thursday, to officially acknowledge the shortfall for the fiscal year that ended July 1st.
“The bottom line: $315.5 million less in General Fund direct revenue collected, relative to expectation or forecast for FY 16,” Legislative fiscal analyst Greg Albrecht announced.
He said the drop in state income can be traced to one primary cause – and it’s not the decline in oil prices.
“The employment picture is really the root of all of this, and we’ve been in a real decline whereas the rest of the country has not.”
Albrecht said if you go back to December 2014, which is the historical peak for Louisiana employment, you can watch the job numbers drop month-over-month.
“We’re running a steady one-percent drop, relative to the prior year, same month. And those months a year ago were decline months. That’s declines on declines.”
All of jobs being shed are from the private sector, and they’re not minimum or moderate wage positions, either.
“All of the decline has come in the most highest paid wage areas: the manufacturing sector, wholesaling, transportation, utilities, finance, professional/business services,” Albrecht explained, adding the effects can be seen in a number of state revenue streams.
“Personal income tax is $105-million below forecast. Vehicle sales tax came in 21-million dollars less. Again, that’s job losses and income losses.”
And gaming revenue from video poker and the casinos is also down.
“That’s probably the purest of discretionary spending. The easiest thing you can give up is that second trip of the week to the boat.”
And, Albrecht says, tax hikes enacted by the legislature aren’t sufficient to bring the state budget back into balance.
“What we need is job growth –at least slower declining.”
How to make that happen? Perhaps Louisiana needs a “Job Growth Task Force”.