House speaker refuses to recognize deficit

House Speaker Jim Tucker refused Friday to cut Louisiana’s income estimates, despite economists’ predictions the state will end this year with a deficit and despite a push from the governor’s chief budget adviser and the Senate president to make the revision.

Tucker’s refusal to boost the current year deficit projection from $319 million to more than $580 million upended the already contentious budget debate between the House and Senate, with 6 days remaining in the legislative session.

If Tucker won’t recognize the new deficit, lawmakers aren’t obligated to deal with it before they adjourn June 21.

Senate leaders and Commissioner of Administration Angele Davis, the governor’s top fiscal analyst, called the move irresponsible.

“Ignoring the deficit won’t make it go away,” Davis said.

But Tucker, R-Terrytown, said it was premature to revise the income estimates, with uncertain revenue figures, and he said lawmakers would be better equipped to deal with the new deficit in the fall, after having time to devise a plan.

“I have real concerns about being able to deal with this in an intelligent, rational approach,” with the handful of days left in the session, Tucker said.

The debate came at a meeting of the state’s income forecasting panel – the Revenue Estimating Conference. The conference has four members: Davis, Tucker, Senate President Joel Chaisson, D-Destrehan, and LSU economist Jim Richardson.

Revisions to the state’s formal revenue forecasts require a unanimous vote. With Tucker in opposition, the conference couldn’t make any changes Friday.

Any change to this year’s 2009-10 revenue forecast would be the third cut, as Louisiana’s personal income and business tax income continue to slide below expectations. Economist Greg Albrecht said personal income tax collections are down 27 percent through May compared to the same period a year earlier. The fiscal year ends June 30.

Albrecht, the chief economist for the Legislative Fiscal Office, and an economist with the governor’s Division of Administration both proposed cuts to state income estimates by more than $260 million this year, plus additional cuts next year.

But when pressed by Tucker, they acknowledged they had little confidence in their proposed revisions and wouldn’t know hard numbers until the books are formally closed in October.

“How comfortable are both of you that these numbers are correct?” Tucker asked.

“Not very,” Albrecht replied. “Obviously, we’ve been dramatically wrong this fiscal year.”

So Tucker opted against revisions, saying, “I feel like we’re throwing darts in the dark.”

However, when pressed by Chaisson, the economists said they don’t have any confidence the revenue estimates for this year would get any better – just worse.

“I think we have an obligation to recognize the reality and to deal with this situation,” Chaisson said.

Tucker cited a provision in the Louisiana Constitution that requires any deficit recognized by the revenue forecasting panel after the fiscal year has ended to be addressed in the next year. So, if Tucker won’t allow the new deficit to be formally recognized until after June 30, lawmakers can deal with that deficit in the 2011 legislative session.

Rep. Jim Fannin, chairman of the House Appropriations Committee, agreed with Tucker’s decision. “We’ve had difficulty in trying to make quick decisions. We need the time,” said Fannin, D-Jonesboro.

This year’s income dip is tied to several factors, including the national economic woes, and an array of tax breaks approved by lawmakers in recent years that have cut into personal income tax revenue for the state.

Jindal cut $248 million out of the state’s $29 billion budget earlier this year, and lawmakers already were working to close another $319 million gap in this legislative session.

Friday’s haggling feeds into an ongoing dispute between House and Senate leaders about how best to rebalance this year’s budget and craft spending plans for the new fiscal year that begins July 1.