State Warns of Lean year Ahead

Gov. Bobby Jindal's chief budget adviser has warned her Cabinet colleagues to prepare for a 30 percent cut in discretionary spending next year, and suggested that reductions could begin soon with the state facing a projected shortfall of $1.3 billion in the 2009-10 fiscal year.

To mitigate the impact on next year's budget, which will be presented to lawmakers in March, the administration has been holding a series of meetings at which department heads have been asked to identify where money can be saved and whether any the savings could be implemented in the current fiscal year.

The sobering news comes after three years of strong economic growth in Louisiana, fueled by record energy prices and post-hurricane reconstruction activity, which has produced a string of budget surpluses. But the national economic slowdown, combined with a leveling off in the energy sector, has led forecasters to predict that 2009-10 will be essentially flat.