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Wednesday, 10 February 2016 11:53
Louisiana's Recession, Gov. Edwards TV, Legislative call; Ready to rumble?
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rumble 2The Revenue Estimating Conference REC has presented the updated Louisiana fiscal house disaster, the Louisiana legislature special session is about to start. 

Are you ready to rumble?

After all, how do you describe a budget crisis situation for a state that will run out of money to pay for expected and some say needed services for this year in the estimated amount of $900 million and now over $2 billion for the following fiscal year?

A horror?  A mess?  Insane?

Call it what you want, today the Legislature’s chief economist, during the REC,  Greg Albrecht put up the warning flags--“For all practical purposes, Louisiana is in its own recession”.

“It’s come on pretty rapidly.”

Governor Edwards in responding to the REC, issued this statement:

Today, Governor John Bel Edwards released the following statement on the latest budget projections announced by the Revenue Estimating Conference (REC). The REC revised both the current year's budget shortfall, which must be addressed by June 30, and next year's budget shortfall, which begins July 1. 

“Louisiana faces an unprecedented budget challenge that, if left unresolved, will devastate state government as we know it and impose unimaginable cuts to higher education, health care and other vital services the state delivers to our citizens,” said Gov. Edwards. “This is a fiscal crisis, the likes of which we have never seen.  We will come through this together, but wehave reached the end of the road where cuts alone will workto solve this problem.  We will need to work to find additional revenue to continue delivering the most basic of vital state services. I will address the people of Louisiana directly in a statewide televised address tomorrow evening, and will be asking for constructive engagement from every Louisiana citizen as we prepare to go into special session on Sunday.”

Gov. Edwards announced on Wednesday (Feb. 10) that he would make a special address to the people of Louisiana concerning the state's budget crises.

This is the budget future with the hopeful answer coming starting Sunday in Legislative special session, in which Democrat Governor, Jon Bel Edwards has called which is expected to last for three weeks.  The goal is to provide the type of emergency assistance Louisiana needs to take care of the enormous budget deficits left by previous Republican Governor, Bobby Jindal in addition to the falling revenue flow due to the oil price collapse.

Although we are in a budgetary mess, there’s still room for plenty of politics.

On one side of the budget discussion are the Republicans who insist cuts can be made, not only to fix the short-term deficit which prior to today’s REC was scheduled for $750 million but the longer-term disaster for the following year.

Also, Republicans have recently complained that the Governor has not structured the special legislature call adequately and has relied heavily upon raising taxes.

Former statewide elected official, Jim Brown and I discussed these issues in an online video discussion, on Monday.

According to Brown, many Republican legislators are considering shutting down the session shortly after it convenes. They want more structural changes to be discussed in the special session.  They want much more emphasis on cuts rather than on taxes.

Brown believes that the call, as currently designed does not allow those types of structural changes that are needed. However, have a different take.  I believe the call is broad enough that it could include major overhaul of the budgetary process including cuts and revenue raisers that could support the State of Louisiana until July 1, 2016 and into fiscal year, 2017-18.

We also looked at (and discussed) a budgetary breakdown of expenses which shows what is discretionary expenses and what part of the budget, is not.

Currently, of a 28.5 billion dollar budget, only 2.9 billion is discretionary which after spending $2.364 billion in k-12, higher education and healthcare (the latter two which has been decimated over the past eight years), leaves only $536 million of discretionary spending to use on a $900 million hole, this year.

Can the legislature fix the hole before the fiscal house of Louisiana tumbles?

Are you ready to rumble?

Watch the video

 

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