Legislators got an extra $155 million to spend Wednesday on next year’s state spending plan.
With the dollars officially recognized, debate can begin on how to spend them. The governor and legislators already disagreed on how to fund the state’s public colleges and universities before the modest windfall.
A number of legislators want to use the extra money to help rewrite the governor’s state spending plan. The governor himself declined to offer specifics Wednesday when asked if he had any ideas for spending the money. The dollars materialized largely because of better than expected personal income tax collections. They mark a more optimistic spin on the state’s financial fortunes. In December, revenue projections dropped, forcing midyear spending cuts that impacted dental care for pregnant women and other health care services.
“My hunch is that the labor market is doing fairly well in Louisiana ... Unfortunately, we are not fortune tellers. We couldn’t tell you exactly when this was going to happen, said Manfred Dix, economist for the Division of Administration.
The Revenue Estimating Conference, which decides how much money is available for state government to spend, met Wednesday morning to look at economists’ revenue projections. The conference meets several times a year to review financial figures since the state operating budget is based on projections. If economists miss the mark in their projections, the budget has to be cut. If they were too pessimistic, more money materializes.
The panel — consisting of legislative leaders, a gubernatorial aide and an LSU economics professor — studied spreadsheets containing estimates by Dix and Greg Albrecht, chief economist for the Legislative Fiscal Office, on state revenue collections ranging from personal income taxes to slot machine proceeds.
The conference chose Dix’s forecast, generating $155 million for the upcoming budget year and $129 million for the current fiscal year.
The recognition of additional revenue in the fiscal year that starts this summer boosts an alternative plan for structuring the nearly $25 billion state operating budget.
The Louisiana House rewrote Gov. Bobby Jindal’s proposed budget to remove a reliance on property sales, legal settlements and other one-time, or nonrecurring, dollars for expenses that must be met year after year. The new plan banks on spending cuts, tax break modifications, a tax amnesty program and $90 million in additional revenue materializing.
The House’s version of the budget now is in the state Senate.
State Rep. Brett Geymann, who helped craft the alternate version, said the panel recognized $60 million more than would be used in the budget for the upcoming fiscal year.
“The increase in estimated revenue will provide approximately an additional $65 million above the House plan and should certainly help as the Senate works to make improvements,” said Geymann, R-Lake Charles.
Jindal made a rare trip to the State Capitol steps Wednesday afternoon to speak in favor of vouchers, which use public dollars to send students to private or parochial schools.
After speaking to the crowd, the governor declined to specify how he wants the extra dollars to be spent.
“We’re meeting (and) working with legislative leaders,” Jindal said.
Roughly six months ago, weak sales and personal income tax collections forced a downgrade in the state’s financial outlook.
Dix told members of the Revenue Estimating Conference on Wednesday that he had happy news compared with December’s meeting.
He said personal income tax collections are showing strength, admitting that the growth came as something of a surprise to him.
Both Dix and Albrecht warned that the state’s sales tax collections are flat, at best.
Dix said people seem to be using their extra income to buy cars but not other goods. Vehicle sale taxes go in a different pot than regular sales tax collections.
“It looks like we’re going to finish flat, at best, on sales tax. It looks like fundamentally people still are holding back,” Albrecht said.
Jindal wanted to restructure the state’s tax code to put more emphasis on sales taxes, which he contended are more stable than income taxes. Amid heavy opposition, he dropped his proposal on the first day of the legislative session.