BATON ROUGE, LA (WAFB) - After a month-long special session, the state is still short $70 million for the current fiscal year that ends on June 30, according to projections from the state's Revenue Estimating Conference (REC). Next year's shortfall rests at $750 million.
After lawmakers passed a series of tax measures during the special session, many expected the shortfall to rest somewhere around $30 million or $40 million. That is down from an originally projected $900 million shortfall.
"We were all hoping and thinking it was south of well $70 million, that was never a number we talked about," said Commissioner of Administration Jay Dardenne.
Before the end of this fiscal year, the state is expected to bring in $300 million from the new revenue measures passed during the special session. According to state economists, the increase to the alcohol tax will bring in an additional $5 million, increasing the tax on a pack of cigarettes by 22 cents will bring in an additional $11 million, and increasing the sales tax by a penny will add approximately $215 million to the state's general.
The state will also use $128 million from the "Rainy Day" Fund and $200 million in BP settlement money to help plug this year's fiscal hole.
At the same time, the governor vetoed parts of the special session's supplemental cuts bill, HB 122. Those vetoes increase the state's shortfall by approximately another $4 million.
Overall, the remaining $70 million shortfall will be covered with cuts to Department of Health and Hospitals and higher education. Higher education already has to cover $28 million for TOPS scholarships, which the state was no longer able to fund.
"I don't expect any institutions to shut down, but they're going to be extreme because the short period time in which the savings have to be realized," Dardenne said.
For the 2016-2017 fiscal year, the state is short an estimated $750 million. That is down from the original $2 billion forecast, but lower than the $800 million figure that the Edwards administration had been using for the past few days.
Next year, the alcohol tax will bring in an estimated $19 million. The cigarette tax will add a projected $42 million to state revenue. Meanwhile, the sales tax will bring in a projected $214 million.
With state law preventing legislators from increasing revenue during this year's regular session, lawmakers are only able to cut the budget.
"You look at some departments, and it would be tough for them to operate with the current level of funding. So yeah, cuts can possibly be found," said Speaker of the House Taylor Barras, R-New Iberia.
Back in February, the Edwards administration introduced a worst-case budget for the next fiscal year that saw some agencies receiving a 63 percent budget cut. Dardenne indicated Wednesday that those proposed cuts would be reduced as a result of the smaller budget gap.
Alternatively, state leaders could hold another special session, at which point lawmakers could introduce new revenue options. Edwards mentioned that a second special session is "more likely than not" during press conference with the media on Monday.
Further out on the horizon, the state's economist indicated things are more bleak.
"You get to FY19, the big sales tax bills expire and a billion dollars falls off. So we are going to have some issues we're going to have to resolve going forward," said chief economist Greg Albrecht.
The cuts for this year to the DHH and higher education will be announced in coming days, according Dardenne.