The Democrat defeated Republican U.S. Senator David Vitter in the November 21 general election and took office last month. The only Democrat governor in the South, he will give a televised address broadcast statewide on Thursday evening calling for tax hikes to pay for the state’s growing budget shortfall, according to a KATC.com report published Thursday. His administration is claiming shortages in just about every department and claims state government will not be able to cover its spending.
“We’ve got weakness in the corporate sector. We’ve got weakness in the personal income sector. We’ve got weakness in the sales tax sector. We’ve got weakness in the mineral sector,” the Legislature’s chief economist Greg Albrecht said. The governor’s spokesman says Louisiana is entering what amounts to a state recession that has come on pretty rapidly.
According to Albrecht, the problem isn’t that the administration is spending too much but that a single-state recession is being driven by fallout from plummeting oil prices across the economy. However next year Gov. Edwards may be back for more since there is a projected $2 billion shortfall in the state’s 2017 budget. Still, the administration must immediately sell the state’s citizens on $850 million in new taxes to balance this year’s $25 billion fiscal budget that ends on June 30. The Revenue Estimating Conference dropped Louisiana’s income forecast by $542 million Wednesday, supposedly in response to lagging tax collections.
The fresh Democrat governor is hard-selling tax hikes on the backs of Louisianians without balancing his financial house with cuts in spending. It’s not clear how he expects to squeeze individuals and companies for tens of millions in new taxes if the economic situation for them is as ominous as he says it is for the entire state.
Nevertheless, Edwards will request lawmakers to raise taxes in a special session that begins Sunday after he runs interference for them tonight by proposing new taxes during his televised speech. Edwards framed the state’s need for new monies as a crisis unequaled in the state’s history in a statement released by his office.
“Louisiana faces an unprecedented budget challenge that, if left unresolved, will devastate state government as we know it and impose unimaginable cuts to higher education, health care and other vital services the state delivers to our citizens,” Edwards said in a statement. “This is a fiscal crisis, the likes of which we have never seen.”
Former Gov. Bobby Jindal says lawmakers didn’t fully pay for all the programs they included in the budget, including Medicaid, the TOPS free college tuition program and the public school financing formula leaving a gap of almost $300 million. However, with oil prices plummeting and a painstakingly slow economic recovery across the country, Louisiana’s state budget deficit is quickly increasing. After the state revised this year’s forecast, the Revenue Estimating Conference also predicted tax revenue would be short $744 million for the fiscal year that begins July 1, which indicates next year’s fiscal budget deficit would most likely surpass the $2 billion estimate.