How Do We Know How Much Money There Is?

Share This

Get to Know the REC

What is the REC?

The Revenue Estimating Conference (REC) decides how much taxpayer money lawmakers are allowed to spend. They usually base their projections off of the recommendations of bi-partisan economists who have extensively studied the Louisiana economy. Those economists predict how much revenue the state government can expect given a whole host of economic factors. Usually, the REC looks at the economists’ economic models, discusses their projections and determines how much money they expect to become available. Once that sum is agreed on, it becomes the basis for that year’s budget – and legislators can begin squabbling about how they want to spend the money.

This process was established more than 30 years ago with the intent to take some of the politics and partisanship out of the revenue-projection process. Unfortunately, in the last few years, things haven’t been that simple.

Who is on the REC?

The REC has 4 seats:

  • Senate President: Patrick Page Cortez
  • House speaker: Clay Schexnayder
  • Governor’s designee: John Leigh "Jay" Dardenne, Jr., Louisiana Commissioner of Administration
  • Reserved for a faculty member of a university or college in Louisiana who has expertise in forecasting revenue (as chosen by the Board of Regents): economist Stephen Barnes, founding director of the Kathleen Babineaux Blanco Public Policy Center at UL-Lafayette and former director of LSU’s Economics and Policy Research Group

The REC’s decisions must be unanimous.

 

What Happened in 2019?

We first saw a shift from the standard procedure in the 2018-2019 conference. Then-Speaker of the House Taylor Barras blocked the REC from approving a revenue estimate. He said he didn’t trust the projections of the bi-partisan experts in front of him, but more likely: it was an attempt to prevent Governor Edwards from funding his priorities (like the teacher pay raise) before the 2019 election, and to suppress the fact that Louisiana’s economy was booming.

In February 2019, the Governor is supposed to release his budget for the upcoming fiscal year, but he couldn’t because the REC hadn’t yet determined a fiscal projection. Keep in mind that the REC’s overdue “forecast” was for fiscal year 2018-2019; so most of the year had already happened.

Instead, the Governor released an “inspirational” budget that incorporated the additional revenue economists had projected.

The REC finally accepted the economists’ projections on April 10, 2019, nearly six months late, and the legislature was then free to spend that money on teacher pay raises, school funding, and other priorities.

 

What’s Happening in 2020?

 

Unfortunately, 2020 seems to be shaping up much like 2019. Two non-partisan economists presented their projections to the REC in January. Per the committee’s request, the economists gave their most conservative predictions: an additional $170 million this year and $103 million next year. Senate President Page Cortez and House Speaker Clay Schexnayder rejected the experts’ opinion, so as of mid-February we still do not have a budget forecast.

The Governor released his budget proposal on February 7th based off of the economists’ projections, but unless the REC does recognize the additional revenue, the legislature will not be able to pass a fully-funded budget.

We must make sure that the REC passes a sensible revenue projection before it’s too late – otherwise the legislature won’t have the money they need to fund teacher pay raises and school funding. Please use the form below, or click here, to send a letter to the REC!