BATON ROUGE, LA (WAFB) - On Wednesday, the Revenue Estimating Conference (REC) forecasted a bigger budget gap than first estimated.
The group adjusted the forecast for rest of this fiscal year and is now anticipating a deficit of $870 million. The initial estimate was $750 million.
"It's stunning," said Greg Albrecht, chief economist to the Louisiana Legislature.
"Very much so," responded Senate President John Alario, D-Westwego, who is a member of the REC.
Lawmakers now have to close the $870 million shortfall before the end of June. That was the better option of two proposed outlooks.
"We have to decide to which one of these we have to go with- the absolutely awful, pessimistic one or the kind of awful, pessimistic one," said REC chairman and LSU economist Jim Richardson.
One thing optimistic state economists predict is the price of oil finally rebounding in another two years, as seen on a chart presented to leaders Wednesday.
"I'd want to err on the side of hoping if oil prices improve then we're looking more at a potential surplus than yet a further mid year cut," said Commissioner of Administration Jay Dardenne.
Low oil prices are not the only factor hurting the state. Economists also blame lower tax revenue.
"The major taxes, income, sales, corporate and minerals, are all diminished substantially," said Richardson.
To close the shortfall, Gov. John Bel Edwards is proposing in-part raising the state sales tax. The governor, Dardenne, and the legislature will tackle the deficit beginning Sunday at the start of a special session.
"The terms pessimistic and realistic are kind of interchangeable in terms of where we are right now," said Dardenne. "We're going to have to recognize the difficult challenges we're facing."
The adopted economic forecast also raises next the deficit of next fiscal year from $1.9 billion to $2 billion.
Gov. John Bel Edwards issued a statement about the new projections.
LSU President/Chancellor F. King Alexander issued a message to the LSU community regarding possible additional cuts. A portion of it is posted below.