Louisiana has begun chipping away at its daunting budget shortfall: about $60 million down, $840 million to go to fill the gap before June 30.
The state Legislature began work this week to identify further cuts that can be made, as well as potential sources of additional revenue that will help the state make it to the end of this year’s budget without a huge deficit.
Gov. John Bel Edwards, through executive order, carved $21 million out of the spending plan for the current year. The Joint Legislative Budget Committee then voted, at Edwards’ recommendation, to slash expenses by an additional $38 million on Monday.
“This was the easy part,” Commissioner of Administration Jay Dardenne said on Monday — two days into a special legislative session to fix the budget. The special session is slated to wrap up by March 9, and legislators will enter regular session on March 14.
Lawmakers will be asked to cut another $29 million off the top of the current year’s budget in the coming days, as the initial budget trimming continues.
All told: The state Legislature is staring down an estimated $900 million shortfall with just four months left in the budget cycle.
The Joint Legislative Budget Committee agreed to Edwards’ early trims with little discussion on Monday.
The cuts that already have been made include a $1.4 million hit to coastal protection; $4 million cut to higher education; $1.1 million less for the budgets of various elected officials; an $18.8 million cut to the Department of Transportation and Development; and $1 million decrease in funding for the State Police, among other services through June.
Edwards also has ordered an immediate hiring freeze for the executive branch and a freeze on expenditures on travel, operating services, supplies, acquisitions and major repairs.
But it could be just the tip of the iceberg for state agencies.
The initial round of cuts were driven by the amounts that are allowed under state law. Edwards and the Joint Legislative Budget Committee can trim budgets when there is a deficit. The Legislature will have to approve further cuts.
To counter the potential threat of cuts, Edwards has offered the Legislature a series of tax proposals, including a one-cent increase in the state sales tax and a 22-cent cigarette tax hike.
But legislators have been slow to embrace his tax hike ideas.
Rep. Tony Bacala, R-Prairieville, compared the current situation to theorizing which comes first, the chicken or the egg?
“I think we need to put cuts before revenue, rather than revenue before cuts,” he said. “We should come out of this process as a more efficient government, a better government.”
He said he believes that the Edwards administration is looking at it from the other side.
Edwards, a Democrat who took office Jan. 11, has proposed using $128 million from the state’s “rainy day” fund and $200 million in BP oil spill settlement dollars that can be used for non-coastal expenses to help plug the hole in this year’s budget, and his sales tax increase proposal would generate an estimated $216 million by the end of the fiscal year.
But beyond the current fiscal mess, the state faces another $2 billion cliff in the coming year.
Just a day into a session that has set out to address this year’s and next year’s problems, some legislators already are expressing frustration over the task that’s been presented to them.
Dardenne gave legislators an overview of the “worst-case” scenario budget for the financial year that begins July 1, representing about a $2 billion cut to current services.
Rep. Rick Edmonds, R-Baton Rouge, expressed frustration over not receiving more detailed information about how deep cuts can be made, rather than just the “worst-case” scenario.
“I don’t think anyone thinks that’s what’s going to happen,” he said. “You look at these pages, and you can’t do anything with it.”