Like many other states battling the current economic recession, Louisiana is dealing with falling revenues to the tune of a $1.3 billion decrease in the state’s general fund revenue forecast for the 2009-2010 budget, according to The Times-Picayune of New Orleans.
To dig out of that hole, the state can take money from the rainy day fund, known formally as the state’s Budget Stabilization Fund.
And the latest reports indicate Louisiana Gov. Bobby Jindal wants to dip into the state’s rainy day fund, according to The Times-Picayune.
The newspaper reported Jindal said he’s willing to sign a budget that takes $50 million from the rainy day fund to finance higher education. But, Jindal said he would require that the $50 million be replenished using state’s planned tax amnesty program, the newspaper reports.
But the federal stimulus funding will run out in two years.
Tapping the state’s rainy day fund also takes a two-thirds vote from the legislature.
And declining tax revenues, like in Colorado and Louisiana, make for a “frustrating situation,” said Scott Pattison, executive director of the National Association of State Budget Officers. That’s because the economy is still in bad shape, he said. As of late last August , states were still seeing a fair amount of growth in their personal income tax revenue, Pattison said. But now the personal income tax receipts are coming in much lower than projected, he said.
“Unfortunately, the way you deal with that is you have to continue to cut or use up your rainy day funds,” Pattison said.