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Louisiana projects $1.2 billion budget shortfall

Gov. Bobby Jindal's budget advisers said Thursday that the state is expecting a $1.2 billion budget shortfall next year. (Photo: Phelan M. Ebenhack, AP) Gov. Bobby Jindal’s budget advisers said Thursday that the state is expecting a $1.2 billion budget shortfall next year. (Phelan M. Ebenhack/AP)

Louisiana will likely face another billion-dollar budget gap next year, a bleak forecast that could bruise Gov. Bobby Jindal’s chances for the White House in 2016.

The state is expected to fall about $1.2 billion short next year, the governor’s top budget adviser told a group of lawmakers Thursday.

Barry Dusse, director of the state Office of Planning and Budget, said he expects the forecast to improve before the $25.6 billion budget must be finalized next July. He stressed that state agencies had planned for $200 million in spending cuts.

But Louisiana’s legislative budget leader cast doubt that the state would find enough new dollars to close the gap, according to the Baton Rouge Advocate.

“I don’t see anything that gives us any indication that there’s a lot of growth in revenue that we can expect over the next three years,” said Jim Fanni, the committee chairman, who is also a Republican. “I don’t have a lot of confidence that we can expect all of that to materialize.”

Jindal recently hired a New York-based consulting firm to identify new ways to boost revenue, under a contract that has so far cost the state $7.3 million. The company, Alvarez & Marsal, has promised to save $2.7 billion over five years. 

While some states have started to see their first budget surpluses since the recession, Louisiana’s budget forecasts have been in the red every year since Jindal took office in 2008. Over the last six years, he has pitched cost-cutting ideas from selling state buildings to privatizing prisons.

Shannon Bates, a spokeswoman for Jindal, called the projections the “first step in the process of presenting a balanced budget next year.”

“This projected spending increase is an accumulation of every government agencies’ wish list,” Bates wrote in a statement. “We know that increasing government spending by hundreds of millions of dollars would not be fiscally responsible.”

While Jindal has gained national prominence for his education reform plan, his handling of the state’s budget has been called his “blind spot” by conservative critics. One Republican lawmaker – a self-described fiscal hawk – said Jindal’s budgets have been based on “accounting gimmicks.”

The two-term governor has shied away from disclosing his 2016 ambitions, though he has recently traveled to early primary states such as Iowa and New Hampshire. He told the Des Moines Register in June that a presidential run is “something I’m thinking about.”

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