Gov. John Bel Edwards said on Monday he would be flexible on the Jan. 19 deadline on a decision for a special session, but he emphasized the urgency of filling the budget the state will face when a penny sales tax expires in June.
Gov. Edwards spoke about the fiscal cliff during his speech at the Baton Rouge Press Club meeting. He said he does not want a continuation of the sale tax or any new revenue, both which would adversely affect low-income residents.
But he said the state needs to figure a way to replace what the state will lose when the temporary sales tax ends.
“Fixing the cliff doesn’t require any new revenue next year,” Gov. Edwards said.
The expiration of the sale tax will mean $1.07 billion less for the state and $450 million in continuation revenue.
He wants a special session after Mardi Gras to move past the fiscal cliff issue before the legislature begins its regular session in March.
Meanwhile, Gov. Edwards will release an executive budget that will show how the state will operate if it does not replace the money.
“It would not be pretty and it’s not the budget I’d want for this state,” he said. “But I’m constitutionally required to provide a balanced budget plan.”
Failure to replace the revenue could lead to deep cuts in healthcare and universities, which usually take the biggest hit, Edwards warned.
He also said it would end a period of prosperity which has included a surplus of $120 million for the last fiscal year and $153 million expected for this year.
Gov. Edwards noted that the surplus does not cover the fiscal cliff.
The budget hole could also lead to layoffs in government jobs and hospitals that partner with the state for healthcare.
“We need to do this in February and not because of the state, but because of the parents, students and businesses,” Gov. Edwards said.