Photo by Elisa Rolle/WikimediaWith an expected 2016-2017 budget deficit between $700 million and $1 billion, or possibly more, House members are continuing to meet privately on fiscal matters ahead of next year’s legislative sessions, which are expected to be stacked with tough decisions.
In the lower chamber, Republicans will continue to enjoy a majority status, but right now only 13 members separate them from the Democratic tally of 45 — before the runoff’s final legislative races. That means reaching 70 votes, which are needed for new taxes and other important bills requiring a two-thirds majority, next year may demand some creative politics.
In a meeting held last week that was hosted by Rep. Steve Carter, R-Baton Rouge, about 35 lawmakers, both Democrats and Republicans as well as seven true freshmen, gathered for briefings from economists and state officials.
The Committee of 100 for Economic Development presented its proposals last week as well to a smaller group of lawmakers, along with other interested parties. Additionally, Rep. John Schroder R-Covington, hosted a follow-up meeting on Friday to his October gathering where lawmakers were split into two groups to explore revenue and expenditure scenarios.
Lawmakers who have been attending these meetings say there’s early interest building for eliminating the federal income tax deduction, which would bring in $840 million for Louisiana.
There are a couple of problems with the idea, however, beginning with the fact that the benefits would not be felt until the 2017-2018 fiscal year, since it would require a constitutional amendment. The other major problem would be convincing voters why they should agree to pay more in taxes. That’s why some lawmakers are considering approaching the issue in concert with possible changes to tax rates.
Some House members are likewise taking another hard look at excess itemized deductions.
It’s so early in the process, lawmakers say, that it’s difficult to distinguish right now what amounts to real interest and what is academic interest — in other words, a true consensus is still a ways off.
More immediately, the state is looking at midyear cuts for the current fiscal year budget to the tune of $370 million. Gov. Bobby Jindal’s administration is also working on a plan to tackle a $117 million deficit from the last fiscal year, making for a $500 million problem for which a solution will be offered well before Thanksgiving, according to the administration.
There’s likewise a shortfall in the TOPS scholarship program of $22 million and, due to a loss of federal funding, the state health care budget is short some $500 million. Both will eventually have to be addressed.
Lawmakers are expected to have at least one special session next year aimed at the structural problems that created the deficits, and to look into broader fiscal issues, before going into their regular session to craft the 2016-2017 budget along with other legislative instruments.