Gov. John Bel Edwards is asking the Louisiana Legislature to dip into the state's reserves, shift spending sources and make modest cuts to some agencies to plug a $304 million mid-year state budget shortfall.
Edwards, a Democrat, has called state lawmakers into a special session starting at 6:30 p.m. Feb. 13 to shore up the budget. Legislators must wrap up their work by midnight on Feb. 22.
On Monday, the governor unveiled his specific plan for plugging the gap in the budget that ends June 30.
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Edwards wants lawmakers to use $119 million from the state's rainy day fund to lessen the need for cuts to state services, but some lawmakers have said they would prefer to make further cuts.
Two-thirds of both the House and Senate members will have to agree to taking money from the rainy day fund.
Edwards' plan doesn't include cuts to K-12 education base funding, higher education, prisons or social services. The popular Taylor Opportunity Program for Students also would be spared from further cuts, as would waiver programs for children and the disabled.
“With only four months left in this fiscal year, adjustments of this magnitude are difficult," Edwards said in a statement. "We have gone line-by-line in the state budget to identify cuts and other state general fund reductions, including identifying funds that could be moved to other areas of the budget."
Edwards' plan calls for cutting the judiciary and the state Legislature's budgets by 2.5 percent; pulling back money that was intended for a new office building for the Legislative Auditor; sweeping $3.98 million from an escrow account that was created in a settlement with a pharmaceutical company; and using $9.7 million that the state received on bond financing, among other proposals.
In all, about $100 million of Edwards' plan, on top of the $119.6 million he thinks the state should use from the rainy day fund, would come from shifting finances, rather than direct cuts.
Edwards has proposed the biggest hit to the Louisiana Department of Health, which faces a $128 million cut on paper that would be about $55 million once revenue sources are swapped out.
"It would be irresponsible to inflict more pain on the people of Louisiana," Edwards spokesman Richard Carbo said. "We've got our plan out there, and it's a responsible approach that the administration has been very deliberative in crafting."
Carbo said that the state's public-private hospital partners were notified of the governor's recommendation that their payments be cut by about 1 percent.
"It's not that they are comfortable with the cut, but they can withstand it," Carbo said.
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Some legislators, particularly House Republican leaders, said they wanted the governor to offer long-term cuts to address the deficit and lessen the shortfall the state faces in the next budget cycle.
"I don't know how much of these cuts can be annualized," House Appropriations Chairman Cameron Henry, R-Metairie, said of Edwards' plan.
Henry and others were still reviewing Edwards' plan Monday evening and seeking more information.
He also said he wanted to know how much the Edwards administration wants to "back-fill" cuts — a process in which money is taken from other sources to plug cuts and mask the effect.
Henry said that in the past the state has turned to "accounting gimmicks to fix the problem short-term without looking at the long-term ramifications."
He said some areas of the governor's proposal, including use of the rainy day fund and sweeping money from other accounts, raised red flags.
"I'm deeply concerned about any method of using one-time money for recurring payments," Henry said. "It's important that we now to look at long-term solutions to our budget problem and not repeat the short-term Band-Aids that just compound the problem in the future."
Edwards Commissioner of Administration Jay Dardenne defended the plan to plug some of the cuts with other sources of funding, including reserve accounts.
"It's one thing to utilize one-time sources when you are facing a mid-year deficit," Dardenne said. "It's another thing to base your budget at the beginning on those sources."
He said that the administration's position is that the long-term budget answer needs to be a larger process taken during the regular session that begins in April.
Attorney General Jeff Landry, a Republican who has frequently found himself at odds with Edwards, accused the governor of playing "partisan politics" in his budget plan. Edwards' proposal would sweep nearly $4 million from an escrow account his office holds and trim statutorily dedicated funds the AG's office receives by 5 percent.
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"His proposed cuts to the department are counterproductive and would reduce our ability to bring much needed funds to Louisiana by pursuing legitimate claims on behalf of the State," Landry said in a statement.
Dardenne said that the 5 percent cut was recommended to the administration by Landry's chief deputy and that Landry didn't have sole claim to the escrow fund.
"It's the state's money," he said of the escrow account. "It's not the attorney general's money."
Gov. John Bel Edwards wants $119 million from the rainy day fund to balance the state budget…