Panel discusses sources of Louisiana budget bind, speculates on future

Panel discusses sources of LA budget bind, speculates on future

BATON ROUGE, LA (WAFB) - When it comes to finding the root cause to Louisiana's current budget bind, a $1.6 billion gap, fingers are pointing in every direction: from falling oil prices, to patch work funding and excessive tax credits. However, one thing seems to be clear.

"We talk about these things years after year, but we have reasons to believe this is a much more serious problem than we've dealt with in the past," said political watchdog Jan Moller.

Gov. Bobby Jindal will present his solutions to the budget shortfall Friday, which is expected to include $200 million in cuts to colleges and a reduction of $526 million in tax credits. However, no matter the plan forward, a panel speaking on Thursday said the problem is ingrained in Louisiana's government structure.

"The real problem is we've made policy decisions 20 and 30 and 40 years ago that are now coming back to haunt us," economist Dr. Tim Ryan said. "And I don't know how we're going to deal with them."

Ryan, a member of the Louisiana Budget Project, added the problems are a result of three things: tax cuts at a time when revenues were high, a slow recovery from the recession that followed and tax credits that give away money. 

State Sen. Jack Donahue, R-Mandeville, said the vast majority of the state's general funds are protected by the Louisiana Constitution, leaving lawmakers with just $2.5 billion that can be cut or changed. That money is also what is used to fund higher education and healthcare.

"We don't have the flexibility to do the things that need to be done to make the budget more responsible," Donahue said.

Jindal is expected to offer lawmakers a list of fee hikes and changes in spending to help find money without raising taxes. Moller said new revenue for the state is needed.

"The fact is the next governor is going to raise taxes," Moller added.

Members of Jindal's staff could not be reached for comment about the budget.

Watch the budget meeting starting at 9 a.m.

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