Wednesday, 07 March 2018 17:45

S&P says Louisiana inched closer to manufactured fiscal cliff with failed session

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jbe fiscal echoS&P released a statement following the Louisiana legislative fiscal session debacle which ended without a solution to the state's serious budget problem. Of note, S&P stated Louisiana "inched closer" to its "manufactured" fiscal cliff.

 

DALLAS (S&P Global Ratings) March 7, 2018--As the sun sets on Louisiana's (AA-/Negative) special session without a resolution, the state inched closer to its manufactured fiscal cliff. In S&P Global Ratings' view, the cliff is a consequence of the expiration of revenue enhancements that the legislature adopted in 2016, which buoyed its budget during a period of pronounced fiscal stress. The June 30 expiration of a "fifth penny" sales tax is the largest such revenue enhancer, which alone provides over $800 million in operating revenue. If all measures expire, fiscal 2019's revenues would be roughly 10% less than in 2018 as initially estimated in Governor John Bel Edward's executive budget.

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