Gov. John Bel Edwards’ administration announced Wednesday that Louisiana’s midyear budget shortfall is slightly lower than originally thought.
Despite the narrowing of the gap, it is still large enough to require a special session of the Legislature in February to make adjustments.
Commissioner of Administration Jay Dardenne said current shortfall is actually $304 million, not $313 million as announced last week because the state will need $9 million less for debt service.
“It’s better than our earlier number but it is still going to result in significant cuts. There’s no way around a reduction in services in areas that we have always deemed critical like higher education and health care,” Dardenne said in a release. “That’s where the general fund dollars are so it’s difficult not to include them on the cut list.”
The administration has proposed using $119 million from “rainy day” funds, Dardenne said, but there is no way to avoid damaging cuts in those areas with less than half of the state budget year remaining.
It takes two third of the House – 70 members – to approve a rainy day fund withdrawal.
Last week’s Revenue Estimating Conference action had placed the revenue gap at $340 million based on updated projections of general fund anticipated to be available in the current budget year.
That number dropped to $313 million because of a change in means of financing for public safety services, reducing state general fund and increasing fees and self-generated revenues.