LAKE CHARLES, La. (AP) — Industry leaders and state officials say times are tough in the oil and gas patch with low commodity prices and a troubled state budget only complicate the path toward recovery.
During the Louisiana Oil & Gas Association’s annual meeting Thursday in Lake Charles, the American Press reports (http://bit.ly/1eOXZNb ) Gov. John Bel Edwards discussed the state’s budget as well as the details surrounding what many consider to be the industry’s worst downturn since the 1980s.
Edwards said he couldn’t promise the industry was going to get better in the short term. Over the last year, Louisiana has lost 10,000 jobs in the oil and gas industry.
“I know one of our tomorrows, things are going to be better for you and things are going to be better for the state,” he said.
A large portion of Edwards’ speech focused on the state’s budget shortfall, which in the current fiscal year is at $700 million. Next year’s shortfall is estimated to be as much as $1.9 billion. Both numbers are expected to grow and represent the eighth consecutive year the state has had a revenue shortfall.
“It doesn’t do us good to continue to pretend all is well in Louisiana,” he said. “We have to look at the situation as it is and we have to chart a course forward.”
Edwards discussed a handful of potential actions that could put the state on a “sustainable trajectory.” A majority of the budget proposals for the current fiscal year are not “revenue raising proposals,” Edwards said. Included among them are measures to tap the Rainy Day Fund, re-direct the first year BP payment to the state, and cuts to discretionary statutorily dedicated funds.
Edwards also discussed the concept of a “clean penny,” which is an additional penny of sales tax for the state. The penny sales tax will not apply to groceries, prescription drugs, or to residential utilities.
Edwards said he will call the Legislature into a Special Session on Feb. 14 to find ways to avoid extensive budget cuts.