The Louisiana Legislature appears to have struck a tentative agreement to closing the state's $304 million mid-year deficit as the clock winds down on the nine-day special session.
Lawmakers have until midnight Wednesday to approve a final version, but on Monday a deal emerged that would use more from the state's rainy day fund than House Republican leaders had initially wanted, but would help grease the wheels for legislation that is being pushed by House Speaker Taylor Barras, R-New Iberia.
Barras said the House Republican leadership still had to nail down a few votes Monday night or Tuesday morning to seal the deal but expected it to come together by Wednesday morning at the latest.
“We’ve had meetings individually, meetings by group,” he said. “It’s getting members comfortable.”
Barras said the key to the deal was the governor and his allies accepting the speaker’s plan to use 3 percent of statutory dedications next year to pay down the state's bond debt. Barras said that would free up about $96 million for the budget that begins July 1.
It would have no impact on the current mid-year deficit, but in return for its passage, House Republicans have agreed to use nearly $100 million from the state's reserves to help close the gap in the budget that ends June 30.
Gov. John Bel Edwards, a Democrat, had asked the Legislature to use $119 million from the rainy day account, which is the maximum amount by law. The administration believes it can use proceeds from bonds to make up most of the difference.
Monday's movement signaled where compromises are being made and where lines have been drawn.
The House version of the spending plan last week used $75 million in rainy day dollars. The Senate adopted its own version, using $99 million from the account, on Sunday.
The Louisiana Legislature's efforts to close a $304 million midyear shortfall in the state b…
House fiscal analysts say that the actual amount used by the Senate is closer to $96 million.
Based on the House Fiscal Office's review, the latest version of the spending plan would cut about $84 million, nearly half of which would come from the Louisiana Department of Health.
The House proposal contained about $114 million in cuts. Edwards' own plan contained about $59 million in cuts.
Also at issue was how much each plan relied on money that could be saved through vacant positions in state government. The House put that number at about $17 million, while the Senate went with $10 million.
State Rep. Cameron Henry, R-Metairie, who chairs the budget-writing Appropriations Committee, said on the House floor Monday evening that negotiations were going well.
“We’re moving in the right direction,” he said.
The House Appropriations Committee and the Senate Finance Committee will meet separately on Tuesday to continue moving legislation.
The Senate budget panel will take up Barras proposal, while the House committee will take up legislation that is needed to tap the rainy day fund.
“If certain chips fall into place, we have a deal,” said state Rep. Gene Reynolds of Minden, who leads the House Democratic caucus.
The state House is again considering a plan that proponents say will free up tens of million…
After Sunday’s activities, many observers believed that both sides were dug into their respective positions.
Edwards met with Democrats from the House Monday morning, and they told him that they wouldn’t go lower than taking $99 million from the rainy day fund. The Republican-controlled Senate agreed with that position.
“We weren’t sending $99 million as an offer for a counter offer,” said state Sen. Eric LaFleur, D-Ville Platte, who chairs the Finance Committee. “The $99 million is our first and final offer.”
Edwards and Democrats had initially opposed Barras' resolution, which instructs the state treasurer to begin developing a process for paying down the bond debt with money normally set aside for specific accounts. Edwards met with Barras and Alario after lunch in the governor’s office, and they soon reached general agreement.
Barras has said that cuts made through the process to areas that legislators didn't intend to defund could be restored on an individual basis. For example, about $20 million that would come out of the fund to pay debt next year normally would go to the transportation trust fund to pay for infrastructure upgrades.
Under the latest version of Barras' legislation, the state treasurer would report back to the Legislature ahead of the regular session that begins in April with more specific details.