Now, The Edwards Administration Says The State’s Budget Deficit Is Only $600 Million

Which of course they’re taking credit for, since they’re patting themselves on the back for expanding Medicaid.

Louisiana’s budget shortfall is now estimated at about $600 million — about 20 percent smaller than previously thought.

Commissioner of Administration Jay Dardenne told a panel of legislators Monday morning that the gap previously estimated at about $750 million has shunk, thanks to savings expected when the state expands Medicaid under the federal Affordable Care Act later this year.

Dardenne said the figures could continue to shift.

The state previously faced a $2 billion hole in the budget that begins July 1, but legislators during a special session earlier this year moved to raise taxes to bridge the gap.

A couple of quick points on this: first, any savings the state gets when it expands Medicaid will occur for one year and one year only, since the federal match on Medicaid expansion evaporates to only 90 percent next year. And that’s assuming the federal government actually holds up its end of the bargain, which is unlikely because at some point the feds are going to abandon Obamacare and won’t have the money to match at 90 percent – there’s only so much money that even Uncle Sugar can borrow.

And second, Dardenne has no idea how big the budget deficit is. He’s basing his estimates on a combination of numbers thrown together by the state’s Revenue Estimating Conference, which has proven time and again that it hasn’t a clue how to accurately project revenues, a set of fiscal notes which look like they’ve been deliberately held back in terms of the effect of the tax increases passed last year, and a budget proposal the administration offered which isn’t going to look anything like the final product.

So now his number is $600 million, down from $750 million, and the narrative is that the governor will have to call a special session when the current regular session is over in order to raise more taxes to balance the budget. But if the critics of those fiscal notes are right, and the administration has been corrupting the legislative fiscal office in a scheme to essentially defraud Louisiana’s taxpayers out of our money, and Edwards gets his tax increases this summer and they turn out not to be necessary…what then?

Asked about the prospects of a Democrat winning the Senate race this fall, Sen. Bill Cassidy had an interesting quote when he said Louisiana is a red state notwithstanding the results of the governor’s race last year that put Edwards in office. Cassidy said there’s a good bit of buyer’s remorse happening with Edwards at present.

We haven’t seen a poll on Edwards’ approval rating lately, but we’d be willing to bet Cassidy’s characterization is correct. And if he gets those tax increases which turn out to be unnecessary because his administration is fudging the current budget numbers, there will be hell to pay.

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