The state budget is not yet busted

Some quick notes on what's being reported from the Revenue Estimating Conference today. The projection they adopted expects the overall budget to shrink by about $223 million this year. BUT there are multiple caveats and what-ifs that will determine the eventual impact on services. 

The REC is itself a politically contentious process.  Its purpose is to set an initial framework for the Governor's budget proposal before the legislative session begins.  After that, lawmakers can figure out how to find more money if they want or just move everything around. But this is where they come up with the number that sets the starting point.  But that starting point isn't an absolute truth ordained from the heavens. It's something that gets argued over by the committee. The result of that isn't so much as an agreement on the most reasonable forecast as much as it is an agreement to stop arguing.

The four-member Revenue Estimating Conference, made up of (JBE's Commissioner of Administration Jay) Dardenne, (Senate President Page) Cortez, independent economist Stephen Barnes, and House Speaker Clay Schexnayder, picked the less rosy of the two available forecasts.

Manfred Dix, an economist for the governor’s administration, forecasted a drop of only $35 million in the state general fund for the upcoming fiscal year, citing what he sees as a quicker recovery as vaccinations ramp up.

Dardenne initially moved to recognize Dix’s forecast, saying the panel would meet again in two months to revise its forecast. President-elect Joe Biden’s administration is also expected to push for aid to state and local governments now that he has Democratic control in Congress.

The panel’s independent economist, Barnes, sided with Dardenne, but Cortez and Schexnayder refused, with Cortez saying the panel should proceed cautiously with so many unknowns. Instead, all four agreed to the more conservative estimate, with Dardenne saying he wanted to avoid going without a revenue forecast, something that had thrown the budget process into chaos amid previous disagreements.

So the REC number is important. But remember not to take it too seriously. Predicting the future is, after all, always more of an art than a science. For example, it says here that state sales tax revenues during the pandemic weren't quite as bad most people expected.  Also there's a fair amount federal money already allocated for Louisiana that hasn't been factored in yet simply because the rules for spending it haven't been established. 

However, the $292 million in higher-than-expected tax collections this year could be used to help cover some of next year’s expenses. In addition, Louisiana is receiving new federal aid passed by Congress in December, some of which could help offset state budget cuts next year. Louisiana and other states still are awaiting federal guidance on what strings exist on the latest assistance.

And, of course, no one expects that to be the end of the federal aid. We could end up being disappointed about the eventual size of it. But right now there are reasons to be optimistic that the next stimulus package could include real fiscal help for the states. Even Cortez thinks so. 

Once President-elect Joe Biden takes office, Congress could also put even more federal funding relief on the table — and that could also affect how large any state budget cuts would need to be.

“We fully expect to get more stimulus dollars,” said Senate President Page Cortez, R-Lafayette, a member of the Revenue Estimating Conference.

Cortez said he does worry any money coming from the federal government after Biden becomes president might not arrive in time to help prop up the state budget. Congress still has to negotiate the new package and the legislature often finishes Louisiana’s budget in June, right before it takes effect in July.

It's hard to know whether or not Page is joking there.  If the last few years have taught us anything it is that this legislature is not worried in the least bit about fiscal deadlines. 

The upshot is the pandemic fiscal doom is not yet upon us. Which is an important thing to remember when Republicans start talking about belt tightening during the session this year.  They are still in charge of deciding whether or not you have to suffer in order to protect the petro-bosses who fund pretty much all of them.  There are better choices, though. 

Oh also be sure and check out this FB event hosted by the LA Budget Project. Looks like they will be talking about a lot of this stuff.

Maybe just let them make a YouTube channel

You really have to hand it to the legislature for bringing the grifter energy to this emergency special session it has called.  Ostensibly, they are there to deal with the COVID emergency and the consequences of expiring benefits and a dwindling unemployment insurance trust fund.  But they're taking the opportunity to also run through a stack of tax breaks for businesses, including and especially oil and gas, to further de-fund public education and various other schemes. Always good to get em in there when nobody is paying attention. 

Even the marquee item on the agenda isn't quite what it seems.  They sound like they are saying they are there to shut down the Governor's emergency order because freedom and democracy or something. 

The push to give lawmakers a say in coronavirus rules started taking shape. Republican lawmakers are circulating petitions to end the emergency health declaration that underlies a sheaf of directives to lessen the spread of the deadly COVID-19, but also have led to widespread shutdowns of business activities and unprecedented unemployment. GOP legislators – including Senate President Page Cortez and House Speaker Clay Schexnayder – want to give the Legislature a seat at the table in emergency powers. 

"The Legislature is a co-equal branch of government ... and we should have a seat at the table," Cortez said.

But, as we've already found out, those petitions are difficult to complete. In part, this is because potential signatories have trouble coming up with specific aspects of the response they would want to do differently. 

Asked what specific components of Edwards' coronavirus restrictions he objects to, Cortez said merely that lawmakers want a "seat at the table." Republicans have railed against a host of the rules, including restrictions on bars and restaurants and visits to nursing homes.

They just want a seat at the table.  They don't actually want to do anything from that seat, though. As Karlin points out in this article (and then highlights again in a tweet thread) this bill would actually make cancelling the emergency order more difficult by adding the requirement of a second petition.  

So it turns out these Republicans, despite holding super-majority status in the state legislature, really just wanted a platform from which they can be seen complaining.  It's nice to be heard, I guess.

Can't wait to see what they come up with

Expiring benefits and the diminishing reserves of Louisiana's unemployment trust fund is a pretty big problem in the middle of a pandemic-induced depression.  It's not the only problem but it is a big one. So the legislature is going to try and solve it. 

That's what they're trying to solve, right?  Or is it something else? 

Senate President Page Cortez, R-Lafayette, said while the 70-item list of items in the call is "expansive," lawmakers wanted to give themselves plenty of flexibility.

House Speaker Clay Schexnayder, R-Gonzales, pointedly said a significant number of House members believe the governor's rules to combat the virus represent "an imbalance of power."

"This special session will not end without a solution to this problem," Schexnayder said Monday.

Edwards said the state Constitution clearly invests him with the authority to take steps during a public health emergency and he has no intention of surrendering it. "I don't think they are going to be successful in doing that," he said.

When in doubt, everybody yell at the Governor. 

The 70-item session call is here.  The phrase "during an emergency or disaster" comes up in several contexts where it looks like we may be making excuses to sidestep health and safety or environmental regulation, or just fast track money they haven't been able to steal yet.  There is an item in there about classifying workers as employees or "independent contractors." Wonder what that's about.

There's a bunch of stuff that seems like it might could wait until the next regular session. They want to tinker around with public school funding.   There is an item about "licenses and fees." Several items look like they are tied to specific pet projects including "surplus property in Jackson Parish," and "certain contracts involving state parks," among others. There is one that mentions the hotel/motel tax in Jefferson Parish for some reason.

A few items look like they might affect governmental transparency. And, of course, there are the usual  tax cuts for businesses and for oil and gas production. 

There aren't any bills filed yet, but... yeah.. can't wait to see what they come up with.