BATON ROUGE, La. (AP) — Gov. Bobby Jindal expects next week’s meeting of the state revenue forecasting panel to be grim, recognizing a midyear budget deficit that will require immediate spending cuts to keep Louisiana’s budget balanced.
The state’s Revenue Estimating Conference will update Louisiana’s income projections on Monday. Jindal wouldn’t speculate Thursday on specific figures, but he said that he expects the panel will lower income estimates for the current 2008-09 budget year and next year.
Shrinking next year’s projection will worsen a $1.3 billion shortfall already forecast by the Jindal administration. Dropping this year’s projection will mean the state needs to act quickly to cut spending and to comply with the constitutional ban on deficit spending.
“We’ve been working and are prepared to tighten our belts,” Jindal said at a news conference at the Governor’s Mansion.
The state’s current budget is nearly $30 billion.
The governor’s already put a partial state hiring freeze in place to help cut costs, hoping to save more than $25 million this year and even more next year. He’s also asked state agencies to look for efficiencies and possible program eliminations to shrink spending.
He didn’t provide details on where cuts would be most likely.
“No part of the budget is going to be immune. We’re looking across every agency, every program,” he said.
More than two dozen states have projected midyear budget shortfalls. In Louisiana, if a midyear deficit is forecast, Jindal can make certain types of budget cuts on his own and others with approval from state lawmakers.
He’ll have 30 days from the formal recognition of a deficit to act.
“We intend to act much more quickly than that,” the governor promised.
But the governor also said he won’t support the use of the state’s “rainy day” fund to plug a deficit this year — though he left open the option that tapping into the multimillion dollar fund could be a strategy to help cope with next year’s problems. As much as $285 million could be available to use from that fund.
Louisiana is faring better than many states in the national recession, but isn’t immune from its repercussions.
The state’s income from personal and business taxes is expected to decline, sales taxes are flat and the severance taxes and royalties tied to oil and gas prices are shrinking as mineral prices fall. Plus, the Legislature recently approved an income tax break for middle- and upper-income taxpayers that will kick in next year, taking further dollars from state coffers.
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