Louisiana’s second special session of 2016 adjourned sine die Thursday, June 23rd at 11:37pm wrapping up a record-long 19 weeks of session.
Gov. John Bel Edwards called the special session with demands of raising $600 million in new revenue to patch a forecasted shortfall for the 2017 Fiscal Year, which begins July 1. Much to Gov. Edwards’s chagrin legislators only raised slightly more than $260 million in new taxes in the second special session. This newly raised $260 million is on top of the roughly $1.2 billion generated during this year’s first special session.
Approximately $90 million in second special session revenue comes directly from businesses. Much of the remaining $170 million in new revenue was generated through an agreed-upon license tax with HMOs for Medicaid match.
Legislators passed a supplemental appropriations bill that allocates new tax revenue to higher education and private hospitals that provide indigent care. Louisiana’s “free” college tuition program (TOPS) was also funded for the fall semester, but students will be required to fund roughly half of tuition in the spring semester unless the state’s revenue outlook improves later this year.
Keep in mind that Louisiana’s legislature – particularly the House – looks very different this year as a result of term limits. Speaker of the House Taylor Barras, R-New Iberia, and his narrow-but-solid majority of supporters in the House clearly began taking shape as the second special session dragged on.
In a post session press conference, Gov. Edwards said that he has no plans to call another special session again this year. However, he said he would be forced to cut the budget by roughly $350 million since the legislature failed to raise as much revenue as he had requested.
Recent media reports have quoted Louisiana economists as saying the state’s economy is shrinking. Corporate income tax collections are down as are sales tax and personal income tax revenues. The state’s loss of roughly 19,000 jobs over the past year is having an effect on state tax collections across the board. Most within the business community point to a shrinking economy as the greatest reason for state budget deficits—a stark contrast to assertions by Gov. Edwards and many legislators who believe that too many tax credits and exclusions are “costing” the state precious tax revenue.
Snapshot of bills filed this year:
- 1st Special Session
- 208 bills filed; tracked 164; 31 tracked bills finally passed
- Regular Session
- Over 2,000 bills filed; tracked 80; 26 tracked bills finally passed
- 2nd Special Session
- 84 bills filed; tracked 27; three tracked bills finally passed