FERRIDAY, La. — The Legislature will need to cut state government and renew a three-cent sales tax on food, medicine and utilities to cover a $500 million to $600 million budget shortfall in fiscal 2000-2001, state Rep. Bryant Hammett said Tuesday.

Those kinds of decisions, said Hammett, D-Ferriday, are what will make his term as chairman of the House Ways and Means Committee “both exciting and challenging.”

Hammett was named chairman almost two weeks ago and has since spent several days in Baton Rouge, holding committee meetings and being briefed on the state’s financial history, current budget and future financial issues.

One of the first things he learned was that the state’s budget for this fiscal year is down $14 million. Gov. Mike Foster’s administration feels confident that a temporary freeze in hiring for state positions will save enough to cover that shortfall.

But a shortfall of as much as $600 million is expected for next year. A two-year, 3-cent sales tax on food, medicine and utilities expires June 30 and was therefore not included in budget figures for 2000-2001. So renewing that tax alone will generate about $327 million.

Gov. Mike Foster said Wednesday that he will ask lawmakers to extend the tax and may ask them to make it permanent instead of renewing it every two years.

The rest of the funding gap would have to be covered by budget cuts that could include further state personnel cuts. But that projected shortfall does not include a $225 million raise Foster has been adamant about giving to teachers.

Many lawmakers are in favor of letting Louisiana voters cast ballots for levying a new tax or increasing existing taxes to cover teacher raises, but Hammett sees that as passing the buck.

“That’s why people elected us — to decipher the information and make those tough decisions,” Hammett said.

In the long term, Hammett wants to take a lead role in revamping the state’s tax structure.

Being dependent on sales taxes for the bulk of its revenue has meant that Louisiana has missed out on the economic boom that so much of the nation has experienced, he said.

And he believes a revamp of the state’s tax structure is the only way to take care of the state’s financial crunch in the long term.

The Louisiana Law Institute is convening a group of academics to study ways to restructure taxes in Louisiana and has already made a presentation to Ways and Means this week, Hammett said.

“But there are so many studies that are then put aside … and gather dust on a shelf,”&160;he said.

So Hammett’s main goal in the next four years is to get representatives of different business sectors together to see what concessions they would be willing to make to revamp the state’s tax structure. “If I could come away from this next term with a goal I&160;had achieved, it would be to do that,”&160;he said.

Ways and Means also includes the Capital Outlay Subcommittee, which doles out state money to different state and local construction projects.

Poorer, more rural parishes that do not have the tax base to do such construction on their own, like Concordia Parish, depend greatly on capital outlay money. In recent years, Concordia has gotten money for the Vidalia riverfront project and several other projects.

Hammett said he will use his new position to persuade Foster’s administration not to further cut the percentage of capital outlay bond money that is spent on local projects.

That is despite the fact that some lawmakers — mostly from urban districts — would like to see local projects taken out of the capital outlay bond bill altogether.

“But I’ll fight tooth and nail to help make sure that doesn’t happen,” he said.