Louisiana could be facing $960 million budget shortfall
(The Center Square) – Louisiana lawmakers could be facing a $960 million shortfall when they begin their next legislative session in April, according to estimates made public Friday.
The potential deficit reflects the loss of $900 million in one-time federal aid used to plug holes in the current budget, rising expenses and the lingering economic uncertainty related to the COVID-19 pandemic.
However, officials are projecting $293 million in excess revenue for the current budget year that ends June 30, which legislators can use to make supplemental appropriations when they are back in session. The state also has a $270 million surplus left over from last year, though the state constitution limits the use of those dollars to one-time expenses such as construction projects, paying down debt and shoring up the “rainy day” fund.
Louisiana also is receiving federal aid from the COVID-19 aid package approved late last year, though federal officials have not issued the rules dictating how the money can be spent. President Joe Biden and members of Congress have proposed sending states additional help.
Gov. John Bel Edwards’ budget proposal is due Feb. 26. The Revenue Estimating Conference plans to hold one more meeting prior to session, so the official revenue forecast may change.
Lawmakers also discussed the status of the state’s unemployment insurance trust fund during Friday’s meeting of the Legislature’s joint House and Senate budget committee. Louisiana Workforce Commission Secretary Ava Dejoie said the state’s trust fund balance is $25 million, while the state’s borrowing account with the federal government stands at about $140 million. The money borrowed from the federal government to pay legally required benefits is interest-free but must be paid back eventually.
“This is an item we’re going to have to deal with in the years to come,” committee Chairman Bodi White said.
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