Some things to note about the issue for this fiscal year:
Next year’s numbers truly are sobering (although not unreal such as those of 20 years ago were with a $1 billion deficit to a general fund that then was less than $4 billion in generated revenue), a drop of about 13 percent to around $8 billion in revenue for the general fund (note that as recently as May, the forecast for next fiscal year was essentially flat). Jindal wisely has promised not to use the Budget Stabilization Fund monies to tackle this year’s deficit because next year’s really will call for these funds. It also cries out for him to dump the maximum amount of funds from the declared fiscal year 2007-08 surplus into it to use next year.
This is serious. The head of my budget unit has called a faculty meeting tomorrow on 18 hours notice just to address this. It’s going to take quite a bit of skill to maneuver this just for this year’s alone so Jindal better be prepared to sacrifice his holidays (the budget must be brought in balance 30 days after a deficit projection or else a special session is triggered).
As for the future, as Jindal wisely has ruled out tax increases that might depress the economy even further, tinkering around the margins as Jindal can do for this fiscal year will be insufficient. Still, to put matters in perspective, the initial revenue forecast after the 2005 hurricane disasters pegged the general fund at $6.6 billion and $700 million worth of cuts made that turned out to be not needed to match realized revenues. If it could be done then, it can be done again.