ATLANTA - Louisiana's House of Representatives last week passed an $11.75 billion all-funds budget for fiscal 1995 that calls for no new taxes, but relies on about $500 million in revenues that might not be forthcoming.
Separately, the House yesterday approved a bill limiting general obligation debt in fiscal 1995 to $200 million, the same cap imposed this year
The House's budget, which is virtually identical to that requested by Gov. Edwin Edwards, assumes legislators will renew a package of sales taxes on food and utilities that would otherwise expire June 30, the end of the current fiscal year. The taxes are expected to bring in about $400 million in revenue in fiscal 1995.
Before 1986, the state exempted food and utility items from its sales tax, but that year began suspending the exemption in an effort to raise revenues. It has renewed the suspension every year since.
The representatives' appropriations also count on about $200 million in revenues expected from a casino to be build in New Orleans. The casino funds would help cover a 5% pay raise for teachers and other education workers urged by Edwards that would cost about $206 million next year.
The casino, which sponsors hoped to open this summer, is expected to bring in an up-front $125 million payment from its operators and more than $80 million from annual tax receipts.
However, the prospect of the state receiving the money for use in fiscal 1995 was recently clouded by a ruling handed down late last month by Louisiana attorney general Richard Ieyoub, who held that bidding must be reopened on the casino's construction contract.
"I think the sales taxes will continue to be imposed - the big question with the budget is how much we will get from the land-based casino and when," said Greg Albrecht, chief economist for Louisiana's legislative fiscal office.
In his ruling on the casino contract, 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 final approval differs substantially from that submitted originally.
Albrecht noted that in April the state's Revenue Estimating Conference certified only $4.04 billion of general fund revenues for fiscal 1995. The budget sets general fund spending at about $4.5 billion.
The House budget bill stipulates that the teachers' raises cannot take effect until the revenue conference certifies that the casino money is available. The conference must also decide if the $125 million up-front portion is recurring or on-time-money, If it decides it is one-time money. it cannot be used for the pay raises and must be used to retire debt.
In addition, the representatives stipulated that the sales tax exemption for food and utility items would be reinstated as the casino revenues flow in.
Following passage of the budget May 3, the House approved House Bill 52, which would continue the taxes for two years. The continuation of the sales taxes must now be approved by the Senate.
House members this week are also debating whether to increase taxes on hazardous waste in the state. Edward, who sought the legislation, urges that proceeds be used to clean up abandoned toxic waste sites in 60 of the state's 64 parishes.
Last week, the House also passed a supplemental appropriations bill allocating the final $50 million of a $100 million surplus left over from the 1993 fiscal year. Under the House bill, the money would be spent on a number of economic development projects recommended by Edwards,
The House budget bill is being reviewed by the Senate Finance Committee, which was nearing passage of its own version yesterday afternoon, according to legislative sources.
