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No Increase To State Income Forecasts, As House Speaker Blocks Change

Dec 11, 2018
Originally published on December 11, 2018 2:27 pm

For the second time in as many weeks, Republican leaders in the House have rejected guidance from state economists who estimate Louisiana’s income will be higher than expected this fiscal year and next. 

Speaker of the House Taylor Barras (R-New Iberia) was the only member to vote against an increased budget forecast at Monday’s meeting of the Revenue Estimating Conference.

“I mean, there just seems to be a number of concerns that we are taking a big leap of faith," says Barras.

The four-member panel is responsible for estimating how much income Louisiana can expect to bring in. Economists say in the current fiscal year, which started July 1st, the state’s income should be about $125 million higher than previously thought, and that’s being conservative.

But for Republican leaders in the House, there’s still too much volatility in Louisiana’s economy.  Barras points to the price of oil, which took a drop recently. GOP House leaders say they aren't willing to give the Governor and the Legislature permission to spend more money until they see more stability.

Barras said he’s open to making an adjustment to the state’s forecast closer to the end of the fiscal year, but not right now.

“I feel strongly that with more data, we make a better decision,” he says.

More data means more time. Jay Dardenne, the Governor’s chief budget officer, says there’s no reason to wait.

“Things are better and you can’t bury your head in the sand and pretend they’re not better.  They are better,” says Dardenne.

Meanwhile, millions in state funding remain in limbo. As part of the budget compromise struck earlier this year, the Legislature agreed to $40 million in below-the-line funding, money that would only be appropriated if the state brought in more revenue than expected this fiscal year.

Included in that figure was nearly $11 million for the Office of Juvenile Justice, which is opening a new juvenile detention center in Acadiana. The center has already been built, but the state budget only provides money to operate part of the building.

James Bueche is the Deputy Secretary of the state’s juvenile system. He says some of that $11 million would have been used to open the entire facility.

"We had specific plans to ramp up hiring, to ramp up training and to get more staff online so we can have the ability to house more kids at that facility. But that's going to be delayed without the resources and without the funding,” Bueche explains.

Speaker Barras also rejected recognizing increased revenue for next fiscal year. That could put Governor John Bel Edwards in a tight spot. A top priority for the Governor next session will be passing a pay raise for teachers. He intended to help fund the raise with next year’s extra income. But if the increased revenue is not approved by the REC before the Governor presents his budget proposal in February, Commissioner Dardenne says they’ll have to come up with another plan.

“We’re going to have to evaluate where else we would propose reductions if we’re going to fund the teacher pay raise on the existing estimate,” Dardenne says.

Larry Carter is President of the Louisiana Federation of Teachers, a union that represents close to 20,000 educators and school employees across the state. He says Monday’s inaction puts teachers at a standstill.

“We've seen the spark of educators who feel like enough is enough when it comes to getting teachers and school employees the raises they need and deserve," says Carter.

The move has reignited tension between Republican leaders in the House and the Democratic Governor.

Speaker Barras says there’s reason to be cautious.

“The factors are real," he explains.  "I mean, the oil price fell apart. We have to take that into consideration.”

But Dardenne, like the Governor, says by rejecting the new estimates, leaders of the GOP-controlled House are obstructing the budgeting process for political reasons.

“This is going to create a level of uncertainty that need not exist in that process."

Dardenne says another REC meeting is possible near the beginning of the year to reconsider the state’s income.

For now, the stalemate continues and the state’s revenue forecast remains unchanged.

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