A handout was distributed to media at the conference based on data from the Fiscal Transition Team assembled by Edwards in the weeks following his Nov. 21 runoff defeat of Sen. David Vitter. The FTT, based on consultations with economists, legislative fiscal staff and current state agencies, revised the $487 million deficit projected by the state’s Revenue Estimating Conference in November upward to $750 million.
Dardenne cited the slump in oil prices, a drop in corporate income taxes and an ebb in state sales tax collections as major contributors to the current year’s deficit. The state is falling particularly short, according to the handout, in funding Medicaid, public schools, the TOPS college tuition program and in housing state prisoners.
It’s a problem, according to the incoming Edwards administration, “too big to cut our way out.” The current budget shortfall, Dardenne pointed out, is equal to the state’s entire higher education budget, and moreover the state’s Budget Stabilization Fund, AKA the “rainy day fund,” has a meager $128 million available — $622 million short for this year alone. State lawmakers earlier in December voted to draw $28 million from the rainy day fund, further depleting a pool of money meant to be siphoned only in dire financial situations, which were a familiar stage property of the Jindal years.
“With less than two weeks to go until the inauguration, we found it important to update the public on the very serious challenges we face,” Dardenne told reporters, according to a press release detailing the event. “I am confident that we all can work together in the New Year to address these challenges and make Louisiana stronger for future generations.”
To see the handout distributed at Dardenne’s Wednesday press conference, click here.
In the backdrop of Dardenne’s conference is whether the new administration and the Legislature can fix what’s broke without eviscerating services, further eliminating corporate giveaways or raising taxes.
It has been widely reported that Edwards plans to call lawmakers into special session in February to look at fixing the perennial deficits that plagued Gov. Bobby Jindal’s rigidly ideological management of state finances since 2008. The Legislature’s regular spring session opens March 14.