Louisiana legislators made some minor changes Thursday but otherwise approved the Jindal administration’s plan to fill an unexpected hole in revenue collections and rebalance this year’s $25 billion state budget.
About 160 vacant jobs were eliminated outright, and others won’t be filled for the remainder of the budget year, which ends on June 30. Nobody will be laid off, Commissioner of Administration Kristy Nichols said.
Revenues came up short because the price of oil fell dramatically and unexpectedly. Severance taxes, royalties and other energy-related fees are determined by the price of oil. Also, other taxes did not come in as expected, creating the $170.5 million deficit.
In order to balance the budget, positions were cut, contracts were reduced and travel was curtailed. Additionally, money will be shifted around various funds, and additional monies, such as collections from the tax amnesty program and penalties from motorists without insurance, will be included.
Nearly $4 million will be saved because Louisiana’s voucher program that sends students to private schools with taxpayer dollars had fewer students than expected. Health care contracts at state prisons shrank.
Minor changes were made to the plan submitted last month by the Jindal administration. Some financing sources were swapped. Agriculture department job cuts were scrapped. A cut to road maintenance work was eliminated.
Joint Legislative Committee on the Budget Chairman Jim Fannin, a Republican state representative from Jonesboro, said he was comfortable that the plan would match spending with available revenues.
Republican state Sen. Mike Walsworth, of West Monroe, said he too was OK with the plan. But if any mistakes are found, they could be fixed in January when the committee likely will return to deal with the impact of any further drop in oil prices.
After Nichols ran the plan past the joint House and Senate budget panel, legislators then approved $17,410,944 in changes to the state’s spending plan.
A few minutes later, Gov. Bobby Jindal issued an executive order that reduced spending and revamped money to reduce the projected deficit by $153,080,648.
Legislators tweaked the plan on the margins.
At least one set of modifications to make the plan work will be needed in the coming months, however.
The Jindal administration wanted to use some amnesty money and other sources of piecemeal financing that haven’t yet been approved for spending by the Revenue Estimating Conference, the state forecasting panel.
Once the panel approves the spending, lawmakers will have to plug that money into the state health department’s budget within the next few months, or the department will have to make $45 million in cuts to comply with the budget revisions made Thursday.
“The funds are available. We need the recognition to spend them,” Nichols said.
The Associated Press contributed to this report.