Louisiana lawmakers wrapped up their fourth special session in less than two years on Friday with a nearly $29 billion budget plan for the coming year but little to address a looming $1.2 billion shortfall that they face after that.
"The fiscal cliff is coming and we're going to have to find the will, the courage to come together to do the hard right instead of the easy wrong," Gov. John Bel Edwards said after lawmakers ended a week-long special session.
The Legislature ended its two-month regular session last week in a dramatic meltdown without approving a budget – the first time that's happened in nearly two decades.
A final agreement was hashed out in recent days with a plan that more closely resembles what Edwards, the Senate and House Democrats had wanted, bucking a push from the conservative House Republican leadership to use less than the dollars that are projected to be available to spend in the budget that begins July 1.
"It's a prudent budget. It's a conservative budget, and I'm proud of that," Edwards said of the final deal. "I do believe this was much harder than it needed to be and it certainly took longer than necessary."
House Republican leaders, citing the state's repeated mid-year deficits, had initially pushed for the state to leave $206 million unspent in next year's budget. The final plan instead encourages Edwards administration to direct agency heads to save about $60 million in the coming year, in case of a deficit, but it still appropriates the money.
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Both the House and Senate are majority Republican, but the House is more conservative and the Senate tends to be more closely aligned with Edwards, a Democrat.
After a dramatic end to the regular session on June 8 that had House members on their feet yelling for a budget vote before time wound down, lawmakers were more jovial on the floor Friday. Hours earlier, the Senate overwhelmingly approved the operating budget, sending it to Edwards.
For the first time in nearly a decade, the state Legislature will fully-fund higher education and the state's popular Taylor Opportunity Program for Students, and thousands of state employees will get modest pay raises.
"It's just like me, far from perfect, but I'm trying," said Sen. Norby Chabert, R-Houma.
Several members lamented that the state didn't address the "fiscal cliff" that comes when a temporary sales tax hike expires in 2018.
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Before this year's regular session started, it was billed as a test for lawmakers to shore up the state's finances. The Legislature can legally only take up certain budget and tax measures during regular sessions in odd-numbered years, or in special sessions, which cost the state about $60,000 a day.
In March – well before lawmakers began what ended up being 10 consecutive weeks of session – Standard & Poor's, one of the major ratings agencies, predicted the Louisiana Legislature would be "forced" to address structural issues in the budget. "Without meaningful, long-term structural tax changes that could carry significant implementation risk, there is a one-in-three chance we could lower the ratings," the ratings powerhouse wrote in an analysis.
Inside the State Capitol, lawmakers have increasingly acknowledged what is thought to be an inevitable special session before next year's regular session begins in March to try to address the shortfall.
Edwards, who has the power to call special sessions as well as direct the topics of them, said Friday that he's not so certain because he won't call one if he doesn't believe that it will accomplish anything.
"I truly don't know," he said when asked when he would call the next one.
Edwards said he plans to spend the off months vetting ideas with members and legislative leaders to see where consensus can be built around revenue and budgeting.
"I don't know what is exactly going to be in the plan," he said. "Any new tax structure needs to be equitable and needs to be fair."