ATLANTA - Louisiana Gov. Edwin Edwards opened the state's 1994 legislative session Monday with a call for economic development, tax incentives for the petroleum industry, and new levies on hazardous wastes.

But Edwards, a Democrat, also used the annual gubenatorial address to announce postponement of his request for a 5% pay raise for state employees and teachers, blaming a ruling handed down last Friday by Louisiana attorney general Richard Ieyoub.

Ieyoub, who held that bidding should be reopened on the contract for construction of a giant casino in ew Orleans, cast doubt on $95 million in fiscal 1995 gambling tax revenues the governor had counted on to help fund the raises.

In his ruling, Ieyoub recommended that the state's gambling board rebid the contract awarded last July to Harrah's Jazz Co. because the current construction proposal awaiting the board's approval differs substantially from the one submitted originally.

"Most lawyers, including I, who have looked at it, feel that the decision is wrong, but we have to live with it," Edwards said in his speech. "Certainly it would be imprudent for me to ask you now in light of that opinion and the uncertainty to consider [the] pay raises.

"If it all works out in due course, we will try to revisit that at some other time." he said.

Despite the ruling, Edwards resolved to move forward with a number of other spending proposals for fiscal 1995, which begins July 1.

An important part of his legislative agenda, he said, will be using $50 million in surplus funds to finance economic development projects. Providing details about the projects for the first time, the governor recommended that $20 million be used to expand New Orleans' convention center, and $10 million go to rural road-building.

The governor also asked for an increase in taxes on the importation, creation, and disposal of hazardous wastes. Proceeds would be used to clean up abandoned toxic waste sites in 60 of the state's 64 parishes, he said.

In addition, Edwards asked lawmakers to help him enact unspecified tax incentives to aid the oil and gas industry.

Such measures, he said, will help the firms "to expedite drilling operations, to recapture abandoned wells, and maintain incapable wells so that we can maximize production and create as much employment as possible."

The governor also said he supported a graduated tax on revenues from video poker machines, but did not provide details on what programs such levies might fund.

Edwards hinted that he may soon provide further details on other legislative programs as the 30-day session proceeds.

"We have tried to, allocate the available funds as equitably as possible," he said, referring to his $11.7 billion fiscal 1995 budget proposal, which was unveiled last November. "However, as I stated a year ago. we are again underfunding a number of very important functions in government."

But Edwards said he would delay an effort to push for lower unemployment compensation taxes.

He said that the postponement was due to a determination by House Speaker John Alario that proposed legislation on the topic could not be considered during the fiscal session.

"We will not attempt to pass it now, but will list it as one of the items to be considered in the first appropriate special session," he said.

Under a constitutional amendment passed last fall, this year's regular session, which will last 30 days, can only consider fiscal topics.

Attorney general Ieyoub has strongly defended the legal opinion he handed down Friday. Ieyoub also said he believes the casino contract can be rebid without lengthy delay.

"There was no political purpose behind it," the attorney general said of the ruling at a press conference Monday. "We felt it was the right thing to do in view of the applicable law."

Last summer the state accepted a plan proposed by Harrah's Jazz Co. to build a casino in a renovated Rivergate complex in New Orleans, rejecting a rival proposal from developer Christopher Hemmeter. Hemmeter controls the lease on the Rivergate, which is owned by New Orleans.

But after Harrah's won the contract, it added Hemmeter as a partner and changed its plan to renovate the building rather than tear it down. This increased estimated project costs, already above $600 million, by another $100 million.

In his opinion, Ieyoub said that the changes were "so fundamentally different from the original" that they "cannot be considered minor, technical, or insubstantial."

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