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No change to Louisiana income forecast in new budget dispute

November 27, 2018

Commissioner of Administration Jay Dardenne, left; Senate President John Alario, center; and LSU economist Jim Richardson speak ahead of the Revenue Estimating Conference meeting on Tuesday, Nov. 27, 2018, in Baton Rouge, La. All three men are members of the conference, which determines the state's income estimates. (AP Photo/Melinda Deslatte)

BATON ROUGE, La. (AP) — Gov. John Bel Edwards’ plans to steer more money to sheriffs and open more dorms in a new juvenile prison stalled Tuesday when the House budget committee chairman blocked the income forecast changes needed to pay for the spending.

The latest financial dispute between House Republican leaders and the Democratic governor, which erupted in a meeting of the Revenue Estimating Conference, also creates new wrinkles for Edwards’ efforts to raise teacher pay next year.

House Appropriations Chairman Cameron Henry refused to support the increase in state income projections recommended by economists. Henry’s rebuff kept the four-member panel from reaching the unanimous vote needed to adjust forecasts used to build Louisiana’s budget.

The action could keep the Edwards administration and lawmakers from funding $43 million in spending plans for the budget year that began July 1, including the dollars for sheriffs housing state inmates and for the new youth lockup facility in Bunkie.

For next year, the move also could prevent Edwards from having the extra money he wants for a teacher pay raise in his budget proposal — without having to make cuts elsewhere.

Henry described his decision as sound fiscal policy, to ensure Louisiana isn’t spending more money than it collects. Edwards called it an “unprecedented political ploy” that could jeopardize salary hikes for teachers.

Economists for the Legislature and the Edwards administration recommended boosting this year’s forecast by about $150 million and next year’s forecast by up to $195 million. They described the estimates as conservative, using tax collections and economic modeling.

Three of the four panel members agreed to add more money to the forecast: Edwards’ chief budget adviser Jay Dardenne; Senate President John Alario, a Republican who often sides with the governor on financial issues; and LSU economist Jim Richardson.

Henry, sitting on the conference for House Speaker Taylor Barras, urged more caution, saying too much financial uncertainty exists. Henry noted the economists talked of volatility in corporate tax receipts, questions about personal income tax collections and a recent plunge in oil prices. Henry said he and Barras don’t want to spend uncertain money and then have to make cuts later if the dollars don’t arrive.

“What we’re trying to do is estimate much more cautiously,” the Jefferson Parish lawmaker said. “There’s not a pressing need to do it today.”

Barras agreed. In a phone interview after the meeting, he said forecast changes were premature and having to make cuts because the state overspent is “a worse exercise” than showing restraint now.

Edwards accused Barras and Henry of hijacking a nonpartisan forecasting process for political gain.

“Once again, the Speaker is bending to the will of a small band of obstructionists in the House who are determined to keep the status quo in our state,” the governor said in a statement.

Alario suggested Henry blocked the improved financial projections to keep from paying for the $43 million list of items that senators in particular supported for this year — and to disrupt the teacher pay raise sought by Edwards.

“If that’s the game that you all want to do,” Alario said, “then you ought to just say that.”

Henry replied: “I can assure you there’s no game being played.”

Henry said he supports a salary hike for teachers and the money could be found elsewhere when the 2019-20 budget is written next year. Louisiana is projected to have $162 million more in general state tax income next budget year than this year, under the current forecast.

Dardenne questioned why Barras didn’t attend the meeting and sent Henry. Barras bristled at suggestions he was dodging the meeting. He said Henry replaced him because a “business issue” in his non-legislative job came up.

Dardenne said he’d call another Revenue Estimating Conference meeting soon to try to get Barras to support the forecast changes.

“At this point, I don’t think I would be any more comfortable a month from now,” Barras said.

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Follow Melinda Deslatte on Twitter at http://twitter.com/melindadeslatte

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