Louisiana legislators will be heading back to Baton Rouge on Feb. 14 to try to fix a $750 million shortfall in the state budget — just four months before the fiscal year ends.
Gov. John Bel Edwards on Friday issued the proclamation calling the Legislature into a special session to try to cobble together a solution through a mix of tax hikes and budget cuts. He has set a March 9 end date for the session.
The call likely isn’t broad enough to give some Republicans the leeway they had wanted to consider broad structural overhauls they believe can save the state money.
But — at this point, at least — all sides say they are ready to work together to address the state’s fiscal crisis. And all appear to agree that the budget hole can’t be fixed strictly through taxes or cuts.
“Leadership demands that we all work together — my administration, legislators and every Louisiana citizen who cares about the future of our state — to stabilize this budget structurally, not only for this year, but for the long term,” Edwards said in a statement on his special session call. “This is not the plan I want to submit to the Legislature, but unfortunately, these are the options we have to choose from in the short term.”
Edwards is asking lawmakers to consider a series of tax proposals as well as cuts to funds that are not locked in by constitutional protections. Among Edwards’ tax options: a 1-cent sales tax hike, a 22-cent increase to the cigarette tax and a retooling of the state’s personal and corporate income tax brackets. Other items up for consideration include taxes on alcoholic beverages, rental cars and phone service.
His order also allows lawmakers to consider cuts to state government operating expenses in the current budget, address statutory dedications and consider scaling back some tax credits.
Republicans have been hesitant to embrace many of Edwards’ tax proposals and asserted a newfound independence from the governor when they elected House Speaker Taylor Barras, R-New Iberia, over Edwards’ pick for speaker, Rep. Walt Leger, D-New Orleans. Louisiana’s governor has, by tradition, wielded the unusual power of picking legislative leaders.
Republicans sent Edwards a letter earlier this week stressing that they wanted the special session call to be broad — “inclusive of all options.”
In the letter, Republican legislators urged Edwards to open the special session call to allow them to consider changes to Medicaid, pensions, employee health care, corrections and the organization of boards and agencies, as well as “other areas that require strategic reform to deliver high-quality services at the most effective cost to the taxpayer.”
It was signed by the chairmen of each chamber’s GOP delegation — Sen. Danny Martiny, of Metairie, and Rep. Lance Harris, of Alexandria.
Harris said the members he had spoken to Friday afternoon were disappointed that several of those options were not included in Edwards’ call.
“We believe reining in government spending and implementing budget reforms is the best approach,” he said. “We are going to dig into this call to see where we can effect some savings in government.”
Harris said members will spend the next several days poring over Edwards’ proclamation to see what they can work into the session.
“Revenue enhancements aren’t the first option,” he said. “We’ll continue to focus on the conservative values that are in line with the citizens of this state.”
In a statement responding to Edwards’ special session proclamation, Barras also noted that several of the GOP delegation’s requests aren’t covered in Edwards’ order. The special session is limited to items outlined in the governor’s call. Edwards’ call contains 36 specific items, many of them tax proposals.
“While some nontax items are included, many were anticipating more opportunity to address structural and spending reforms,” Barras said. “The House committees are positioned to begin work within the frame of the call, and I am certain a number of bills will be filed in the coming week.”
In the letter, Republicans said they agree with key points that Edwards has made: Tax hikes shouldn’t be the first option, and a cuts-only approach won’t work. But they expressed hope that Edwards would allow more flexibility to address those structural issues.
“We must concentrate on structural budget solutions both short term and long term, and we look forward to tackling these issues in a bipartisan manner,” the Republican lawmakers wrote. “Without specific efforts to rein in costs, focus on core services and streamline operations in state institutions, we fear that we will be in a similar deficit situation in a few short years.”
The state Revenue Estimating Conference will meet Feb. 10 to adjust the outlook for this year’s and next year’s budgets. Edwards’ administration has said it expects the shortfall projections will grow because tax collections have not met expectations.
“We’ve predicted the numbers would get worse,” Edwards said this week. “The prudent thing to do, we believe, would be to plan in the most practical manner.”
Meanwhile, state higher education and health leaders have released detailed plans outlining the impact of a cuts-only approach to filling the budget hole.
Edwards said he hopes the Legislature can reach a budget solution early and won’t need the full 31/2 weeks that he’s allotted for the special session. But the Republicans’ letter seemed to indicate that lawmakers were eager to take on time-intensive efforts during the short session.
Harris joked that lawmakers would be working on “overdrive” during that time.
The Legislature’s regular session begins March 14. Lawmakers will then begin hashing out a budget plan for the fiscal year that begins July 1. The state is facing about a $1.9 billion shortfall for the coming year. Any taxes or cutbacks approved in the special session could be held over to shrink that hole.
Edwards is required to release an executive budget recommendation by Feb. 13. He said he plans to present a balanced budget that reflects the cuts it would take to balance the budget.