Louisiana’s difficult financial picture brightened a bit on Tuesday.
That had state lawmakers saying they now face an easier job in meeting their constitutional responsibility to balance the budget this year and next, while achieving their goal of doing that without preventing cuts to the public health care system and to public colleges and universities.
“It gets us closer to where we need to be,” said Rep. Joel Robideaux, R-Lafayette, who is chairman of the tax-writing Ways and Means Committee. “Our hope is the Senate will figure out how to generate the additional revenue or make cuts.”
The legislative staff certified an additional $53 million for the 2016 fiscal year that begins on July 1. Legislators added it Tuesday to the budget as part of House Bill 800, which is known as the Supplemental Budget Bill.
Combining the $53 million with $116 million in new money certified by a state panel last week gives state lawmakers a total of $169 million in additional money. They say they are now $145 million short of what they need to fund the higher education institutions and health care providers at the same level in 2016 that they are receiving in 2015.
The staff also found enough money for the committee to cover unpaid expenses for the 2015 fiscal year that ends on June 30. That gap was $52 million.
With the extra money in hand, the Louisiana House is expected to approve its draft of next year’s state budget on Thursday, following an all-day debate. In all, lawmakers have to fill a projected $1.6 billion deficit in approving a budget that authorizes state government spending next year. Legislative leaders expect to balance the budget by making at least $600 million spending cuts.
The budget also includes $615 million in new revenue from increasing the cigarette tax, scaling back tax breaks for the film and solar energy industries and taking away 20 percent or 25 percent of an array of business tax breaks.
In its current form — as approved by the Appropriations Committee 10 days ago — the House budget directs most of the $615 million to the colleges and universities, leaving a shortfall for the private companies that manage the public hospitals, the health insurance for the working poor, elderly patients living in nursing homes and the developmentally disabled.
Lawmakers have also been searching for more money to fund the enrollment growth in K-12 public schools next year, as well as programs run by the state tourism office, the Agriculture Department and other agencies.
The $169 million found for next year could be used to help fill the shortfalls for health care and the other programs.
Where lawmakers would find the remaining $145 million is not clear. They have to pass a balanced budget by June 11 when they adjourn for the year.
They must do that while offsetting much of the $615 million in new tax revenue with tax decreases to avoid a veto by Gov. Bobby Jindal and his adherence to the tax guidelines from Americans for Tax Reform, a Washington, D.C.-based lobby group.
Senate President John Alario, R-Westwego, said he awoke from a fitful sleep at 2:30 a.m. on Tuesday and again at 4:30 a.m., worried about how to raise enough money without inviting Jindal’s veto.
The House Ways and Means Committee approved a measure Wednesday that would create an offset sought by Jindal. House Bill 828 by state Rep. Cameron Henry, R-Metairie, would phase out the corporate franchise tax over five years. Doing that would cost the state $50 million next year and more in later years.
“We need to send a message to business that we still want to proceed as a business-friendly state,” Henry said in an interview after the vote, given the other proposals that would make businesses pay more.
With the House expected to approve the budget on Thursday, the Senate Finance Committee will take it up on Monday. The committee will hear testimony from the public on Saturday, May 30, said state Sen. Jack Donahue, R-Mandeville, the committee chairman.
“Supplemental is just cleaning out our current year,” said Appropriations Chairman Jim Fannin, R-Jonesboro.
For the current year, the legislation would add money to a number of programs that were facing a gap. For instance, the Medicaid program for the poor would receive $12 million, and another $3 million would go to sheriffs for housing state prisoners in local jails. But most of the money would is going to fund public schools.
The legislation would add about $37 million to cover unexpectedly high public school expenses this year.
The Minimum Foundation Program — better known as MFP — is a formula that sends state revenues to local school districts based on the number of students enrolled. The formula came up short in dollars for the current year.
“It’s because of the additional students that were added during the school year,” said Rep. Rogers Pope, R-Denham Springs, an Appropriations member. The undercount goes back to October.
The state’s Revenue Estimating Conference cleared the use of the $116 million last week. Most of the money comes from a fund that collects fees from insurance companies to cover losses of companies that go bankrupt.
Fannin and Alario met briefly after the Appropriations meeting Tuesday to discuss the legislation needed to access about $74 million of that money that the state Insurance Department is holding, Fannin said. The bill to do that is currently in the House Insurance Committee but will have to be amended.
The revenue conference designated about $125 million in surplus money and $70 million from a myriad of other sources for next year’s budget.
Follow Tyler Bridges on Twitter, @TegBridges. Mark Ballard is editor of The Advocate Capitol news bureau. His email address is firstname.lastname@example.org and is on Twitter, @MarkBallardCNB. For more coverage of government and politics, follow our Politics Blog at http://blogs.theadvocate.com/politicsblog/.