Jindal talks state budget problems

BATON ROUGE — Gov. Bobby Jindal said Monday that he won’t agree to raise taxes to fill a more than $1 billion projected budget gap next year, which leaves cuts to keep Louisiana’s budget balanced.
Jindal said it’s too early to say where he might consider cuts for the 2009-10 year that begins July 1. But he said he’s talked to his agency chiefs about finding ways to trim spending and step up efficiency.
“I don’t think it’s going to be as bad as what other states are going through, but it’s going to be significant,” Jindal said. “It’s certainly going to be more challenging than any budget that’s been put together in the last few years.”
He added, “You’re going to see some very real budget reductions, some very real policy challenges and changes.”
As for suggestions of a tax increase to fill the hole, Jindal said, “Our administration will not be supporting any tax increases to close this gap. Let me take that option off the table.”
The governor talked about the projections after a weekly meeting with cabinet secretaries on the state of the Louisiana economy, which he said was stronger than most other states.
Fiscal analysts have said it would cost $1.3 billion more than the state has to spend next year to continue running all programs and keep up with the costs of inflation. The state doesn’t usually fund the so-called “continuation budget,” but it is the starting point for putting together each year’s budget plan.
Jindal will submit his recommended budget to lawmakers before they return for a regular legislative session in April.
“We’ve already told our agencies to start identifying opportunities, more efficient opportunities for savings,” he said.
The state has an $865 million surplus from last year, but that can only be used for one-time items, like debt payments and construction spending, not to fill any budget holes. And the surpluses are drying up.
Oil prices have slipped. Corporate taxes and personal income taxes have fallen, and the state sales tax remains flat.
With those economic realities and a $360 million income tax break for middle- and upper-income tax filers set to kick in next year, the state’s income streams are forecast to fall below what came in this year. Plus, the costs of doing business and providing services continue to rise with inflation.