"The state is facing a fiscal cliff."
That's the warning from a Louisiana budget watchdog who says the state will face massive budget cuts next July when two temporary sales taxes expire. If the state legislature doesn't act, the Louisiana Department of Health could face massive cuts.
"If the legislature wants to avoid cuts, they can extend those taxes," Jan Moller of Invest in Louisiana said.
Moller told WWL's Tommy Tucker that the state stands to lose a $500 million in tax revenue if the legislature allows those taxes to sunset. Moller says if that happens, the fiscal cliff would force the Louisiana Department of Health, the Department of Education, and other state agencies to slash their budgets.
That, Moller says, would impact vulnerable Louisianans.
"Even these cuts would hit programs that serve elderly people, children, people with disabilities," Moller said. "You end up cutting a lot of the services and programs that people depend on and a lot of the investments that we need to make tomorrow's economy as strong as it can be."
According to Moller, state legislatures of years past put the state into this bind by approving two temporary sales taxes to plug a budget hole instead of creating a permanent revenue stream.
"The two biggest components of the fiscal cliff are the a temporary .45(-percent) sales tax, and there's a separate smaller sales tax, two percent, on business utilities," Moller said.
However, Moller notes that lawmakers will be hesitant to increase, renew, or create taxes.
"There doesn't seem to be a willingness in the legislature, at least not now, to raise the revenue that could get them out of this problem," Moller said.
Lawmakers will discuss the fiscal cliff when they begin hearings on the 2025-26 budget later this week. The Joint Legislative Committee on the Budget will meet on Friday at 9:30 a.m.