Wednesday, October 6, 2010

Double whammy hits state budget

Much more bad budget news. Two separate reports this week make up a possible $300 million double whammy for the cash-strapped state budget.

First, state officials learned this week that the last fiscal year ended with a constitutionally prohibited $108 million deficit. That means the administration of Gov.Bobby Jindal must cut this year's budget to balance the books.

In this story by Times-Picayune reporter Jan Moller, Commissioner of Administration Paul Rainwater says that corporate income tax returns are lower than anticipated. Rainwater says he is meeting with heads of state agencies to decide what can be cut by the end of this fiscal year next June.

Second slap: According to this story by Advocate reporter Michelle Millhollon, a recently filed lawsuit may force the state to trim nearly $200 million more from this year's budget.

Rainwater says that in the next two weeks he'll give agency heads marching orders on the cuts that may come about if the state loses the lawsuit.

That suit, filed by former State Rep. Ron Gomez, challenges the state's use of "rainy day funds" to plug the budget gap in the current budget. If the suit succeeds, it will create a $198 million hole in the state budget.

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