Louisiana’s Budget Stabilization Fund, better known as the “rainy day” fund, currently contains a little more than $405 million, State Treasurer John Schroder says.
When the state has a projected shortfall, legislators can appropriate up to one-third of the fund to fill the gap. Two-thirds of lawmakers in each legislative body must approve spending the money.
The state currently is expected to have a surplus in the neighborhood of $300 million for the fiscal year that ended June 30, Gov. John Bel Edwards administration says.
According to a report presented to the state’s Revenue Estimating Conference Tuesday, the state tax incentive programs are expected to cost almost $686 million during the current fiscal year. The most expensive program is expected to be the Motion Picture Investor Tax Credit, which is projected to reach its $180 million cap.
The Department of Revenue said it is “unable to anticipate” the cost of four programs. Last fiscal year, actual incentive expenditures were a little more than $501 million, which was more than $100 million less than what was projected.
Revenue Secretary Kimberly Robinson attributed the lower-than-expected cost to the fact that a number of historic building renovation projects that are expected to qualify for tax credits either haven't been completed or haven't yet been audited.
The REC on Tuesday interviewed three candidates to replace Jim Richardson, the academic economist who serves on the four-member conference along with the state House speaker, the president of the state Senate, and the governor’s office. The REC attempts to predict state revenue to determine how much money the government can spend.
The Louisiana Board of Regents, which oversees higher education, nominated Stephen Barnes and Gregory Upton, both of LSU, and Gary Wagner of UL-Lafayette. The REC members will make the final selection, potentially at their next meeting in September.
The candidates said they could resist political pressure to pick numbers that favor any particular faction, such as the public universities that employ each of them and are partly funded by tax dollars. They said they would rely on the projections of the two state-employed economists who report to the REC rather than creating their own, saying their role would be more about asking the right questions.
Upton said the role requires a “very delicate balance between confidence and humility.”
“Economic forecasts are never exactly right,” he said. “As each of you knows all too well, sometimes they can be quite wrong.”