State legislators learned Friday of next year’s projected budget deficit: $713 million. The $25 billion budget for this fiscal year that began July 1st contains about $550 million in patchwork financing that isn’t expected to be available a year later, accounting for much of the projected gap forecast for the 2016-17 budget year. The shortfall also assumes inflationary increases in health care, retirement and salary costs that lawmakers don’t always choose to fund. This projected gap is significantly smaller than the much-publicized $1.6 billion dollar one in the 2015 Session earlier this Summer. The shortfall could get larger as this year’s budget is based on $62 per barrel oil prices, significantly lower than real prices. Large dips in per-barrel price can wreak havoc on Louisiana’s budget, which generates revenue from severance taxes and mineral royalties tied to energy production. Every dollar drop in the annual oil price for income projections is estimated to be about an $11 million hit to the state general fund.
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