Allain: State must find long-term budget fixes

Short-term solutions the Legislature made to the state’s budget during the special session will force state leaders to formulate long-term budget fixes eventually, said state Sen. Bret Allain, R-Franklin.
Allain was guest speaker during Monday’s St. Mary Industrial Group luncheon meeting.
The culmination of the drop in oil prices, the projected hole in the budget and “everything else increasing in the budget, particularly entitlements,” have contributed to the state’s budget issues, Allain said.
Legislators began the 2016 regular session Monday. The special session that Gov. John Bel Edwards called solely to address the state’s budget shortfall ended March 9.
All the temporary fixes legislators implemented during the special session to patch holes in the budget will “sunset” in 28 months, Allain said. Those short-term fixes, which included increasing sales taxes by one cent and getting rid of many sales tax exemptions, will force legislators to come up with more permanent budget solutions in the 2017 fiscal session.
The special session did ensure that higher education won’t be severely damaged, and no colleges or hospitals will have to close, Allain said.
In the special session, legislators formed groups to study the inventory tax and general taxation in the state. The Task Force on Structural Changes in the Budget and Tax Policy along with the Task Force to Study Inventory Tax and Associated Tax Credits will examine ways to adjust the budget and change the structural deficit. Both task forces will report back to the Legislature for the March 2017 fiscal session, he said.
“If we don’t make the structural changes that we absolutely have to make in the fiscal session of (2017) … then this (temporary) revenue will fall off, and we will be back in a $2 billion deficit,” Allain said.
Legislators started the session with a $956 million shortfall for the 2015-16 fiscal year and finished the special session with about a $30 million hole, he said.
The Legislature also faced a $2.2 billion projected deficit for the 2016-17 fiscal year and left the session with an $813 million shortfall, he said.
The Legislature had a few dozen bills in the special session that could’ve helped fix the budget issues, Allain said, but the bills weren’t considered because they didn’t fall under the guidelines Edwards set for the special session.
“It wasn’t a true picture of everything we could deal with,” Allain said.
During the regular session, the Legislature can only “take up” matters that are deemed non-fiscal, Allain said. The regular session ends June 9.