The state budget, HB 1 by Rep. Jim Fannin (D-Jonesboro), is bogged down in the Senate Finance Committee, and there is no clear picture of what the budget will actually look like after the session ends on June 21.
As proposed, the $25.4 billion budget includes deep cuts for higher education, health care and a number of other state responsibilities. But as reported in the May 21 edition of the Weekly Legislative Digest, the Senate and House of Representatives are at loggerheads over resolving a shortfall facing the state in the current budget year.
The stumbling block is over use of the state’s “rainy day fund” to shore up the budget. While both sides want to use the fund to avoid a constitutionally prohibited deficit, they disagree over how and when the funds should be repaid.
The situation grew murkier on Friday, when the state’s Revenue Estimating Conference met to announce yet another shortfall in state revenues. With just two weeks left in the fiscal year, state economists said that revenues have fallen by another $261.4 million this year.
The state already cut this fiscal year’s budget by $200 million last December, and by another $319 million in April.
Leading the most recent decline in estimated revenues is a $250 million shortfall in collection of personal income taxes.
As Greg Albrecht, chief economist for the legislative fiscal office, said, “Obviously, we have been dramatically wrong this year.”
That set up yet another confrontation between the House and Senate. Speaker of the House Jim Tucker (R-Terrytown) said the Revenue Estimating Conference should not accept the economist’s report until the end of the year, and use some constitutional sleight-of-hand to pay back the deficit in the coming year.
Senate President Joel Chaisson (D-Destrehan), on the other hand, said the constitution does not allow a deficit, and recommended that the conference recognize the shortfall, which would require more cuts over the next couple of weeks.
Because decisions by the Revenue Estimating Conference must be unanimous, the issue was left hanging at that point.
The Senate Finance Committee will continue its discussion of HB1 next week.
Showing posts with label Revenue Estimating Conference. Show all posts
Showing posts with label Revenue Estimating Conference. Show all posts
Friday, June 11, 2010
Tuesday, May 12, 2009
Economist says bring back the Stelly Plan
As LFT President Steve Monaghan pointed out before the current legislative session began...
And as Lt. Governor Mitch Landrieu noted on May 5...
An economics professor and member of Louisiana's Revenue Estimating Conference has now confirmed: The legislature made a serious error last year when it reversed the so-called Stelly Plan tax reforms. And unless they undo that reversal, our state will continue its long, painful slide.
LSU economist Jim Richardson spoke to the Press Club of Baton Rouge yesterday, and as Advocate reporter Michelle Millhollon writes here, he said that last year's massive tax cuts were a mistake.
To briefly recap: the Stelly plan was an effort to make our tax code more progressive and less dependent on the price of oil (as it was in the 1980s, the last time an oil bust ruined our economy).
The Stelly plan reduced sales taxes on food, utilities and prescription drugs because those taxes were disproportionately high for poor people. It lowered income tax rates for the poorest citizens, and raised them slightly for the wealthiest.
But when some of those better-off citizens had to pay a bit more, they ran screaming to the legislature. And because the price of oil last year was over $150 per barrel, lawmakers felt free to ratchet back the Stelly Plan.
Now oil is hovering somewhere around $60 per barrel, and losing the Stelly Plan is costing the state $359 million.
That is why economist Jim Richardson, a member of the state's Revenue Estimating Conference, says that lawmakers should take another look at Stelly and perhaps reinstate its tax rates.
Which could very well be why Speaker of the House Jim Tucker, a Republican and great friend of tax cuts, says he does not believe the Revenue Estimating Conference needs to meet again before the end of the current legislative session.
It is customary for the conference to meet in May, but Tucker, according to this article by Times Picayune bureau chief Robert Travis Scott, does not want a meeting in which Richardson could express his views.
Tucker and Richardson are two of the three conference members; the third, Senate President Joel Chaisson, a Democrat, says he believes the conference should meet.
And as Lt. Governor Mitch Landrieu noted on May 5...
An economics professor and member of Louisiana's Revenue Estimating Conference has now confirmed: The legislature made a serious error last year when it reversed the so-called Stelly Plan tax reforms. And unless they undo that reversal, our state will continue its long, painful slide.
LSU economist Jim Richardson spoke to the Press Club of Baton Rouge yesterday, and as Advocate reporter Michelle Millhollon writes here, he said that last year's massive tax cuts were a mistake.
To briefly recap: the Stelly plan was an effort to make our tax code more progressive and less dependent on the price of oil (as it was in the 1980s, the last time an oil bust ruined our economy).
The Stelly plan reduced sales taxes on food, utilities and prescription drugs because those taxes were disproportionately high for poor people. It lowered income tax rates for the poorest citizens, and raised them slightly for the wealthiest.
But when some of those better-off citizens had to pay a bit more, they ran screaming to the legislature. And because the price of oil last year was over $150 per barrel, lawmakers felt free to ratchet back the Stelly Plan.
Now oil is hovering somewhere around $60 per barrel, and losing the Stelly Plan is costing the state $359 million.
That is why economist Jim Richardson, a member of the state's Revenue Estimating Conference, says that lawmakers should take another look at Stelly and perhaps reinstate its tax rates.
Which could very well be why Speaker of the House Jim Tucker, a Republican and great friend of tax cuts, says he does not believe the Revenue Estimating Conference needs to meet again before the end of the current legislative session.
It is customary for the conference to meet in May, but Tucker, according to this article by Times Picayune bureau chief Robert Travis Scott, does not want a meeting in which Richardson could express his views.
Tucker and Richardson are two of the three conference members; the third, Senate President Joel Chaisson, a Democrat, says he believes the conference should meet.
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