BATON ROUGE — Struggling to close hefty budget shortfalls, lawmakers got an assist Thursday when the state income estimating panel added nearly $179 million to two years of financial forecasts.
Action from the Revenue Estimating Conference was a welcome change for Gov. Bobby Jindal’s administration and lawmakers. In the past year, the forecasting panel has made multiple downgrades to financial projections that forced cuts and short-term budget fixes.
“It’s finally good news. There’s some indications things are getting better in our state,” said Senate President John Alario, R-Westwego, a member of the conference. “Unfortunately, it’s not quick enough, not fast enough, but at least we’re not going backward.”
The forecasting panel boosted the state general fund forecast for the budget year that ends June 30 by $99.4 million and for next year by $79.3 million.
“It’s a good day, helps us close the gap,” said House Speaker Chuck Kleckley, R-Lake Charles, another conference member
Although some of the money was tied to improved expectations for corporate and sales tax collections, a sizable portion of the new money — $74 million — comes from a one-time, excess balance in an insurance reserve fund identified by Insurance Commissioner Jim Donelon. Donelon said lawmakers also will need to make a change in state law to spend the money.
The first draw on this year’s extra cash is an estimated $56 million for gaps in the state public school financing formula, the TOPS free college tuition program, Medicaid services and reimbursement for local sheriffs who house state prisoners in parish jails.
But the remaining money could be used to help close next year’s budget shortfall, along with other patchwork funds the conference identified as available for spending.
The House made tax changes that could offset about 70 percent of the list of needs identified by House leaders for next year’s budget. That still leaves sizable gaps topping at least $200 million — much in health care programs, but also in state parks, museums and agricultural services.
Without additional dollars, the LSU privatization deals are short of what the hospital operators say they need to continue providing the current level of services to the poor and uninsured who rely on the facilities.
In addition, LSU’s medical schools in New Orleans and Shreveport would be left with millions of dollars in insurance and retiree costs from the privatization deals that medical school leaders say could leave them teetering on the edge of bankruptcy.
How lawmakers plan to spend the newly recognized money will become clearer next week, when the House votes on bills to rebalance this year’s budget and to set state government spending plans for next year.
The four-member forecasting panel includes Alario, Kleckley, Gov. Bobby Jindal’s chief budget adviser Kristy Nichols and independent LSU economist Jim Richards. Changes to the forecast must be unanimous. The adjustments stem from estimates made by economists who work for the Legislature and the governor’s administration.