House Republican leaders on Tuesday privately proposed covering a mid-year budget deficit in part by cutting spending on K-12 schools, public colleges and universities and the prison system but then withdrew the plan in the face of strenuous objections by Gov. John Bel Edwards and a lack of support from its own members.
GOP leadership also canceled an Appropriations Committee hearing scheduled for Tuesday afternoon during which the Republican-controlled committee was to take up the budget cuts favored by the leadership.
The events took place on the first full day of a nine-day special session called by Edwards to close a $304 million shortfall.
The House leadership’s retreat on both fronts indicates sharp divisions within the ranks of Republicans, who hold a majority in both the state House and Senate. The governor is a Democrat who counts on strong support from his party in both chambers as well as the Senate, which is more moderate than the House.
The next steps taken by the House Republicans are crucial to the fate of the special session because little meaningful action can occur until the Appropriations Committee acts. All budget bills must originate with the committee under the state Constitution.
“What government service do you not want to fund in the few remaining months of the (fiscal) year?” Jay Dardenne, the governor’s top budget official, asked in a rhetorical question directed at House Republicans. “That’s the challenge the Legislature faces.”
Echoing comments by Edwards and Dardenne, Republican and Democratic senators on Tuesday called on the House leaders to offer specific details on what programs they want to axe as part of an overall plan to fill the $304 million gap.
“We want to give them ample opportunity to come forth with a plan,” state Senate President John Alario, R-Westwego, told a packed room during a Senate Finance Committee hearing in the afternoon, even as he noted that “the clock is running on us” in the special session. “We will continue to give the House a bit more time.”
The House Republican leaders – led by state Rep. Cameron Henry, of Metairie, and Rep. Lance Harris, of Alexandria – presented their budget plan in two separate closed door meetings in the governor’s office attended by House and Senate members of both parties.
Henry chairs the powerful Appropriations Committee, through which budget bills must pass. Harris chairs the House GOP Caucus and is a member of the Appropriations Committee.
The key sticking point in resolving the $304 million deficit is the amount of money that lawmakers would tap from the state’s rainy day fund. Edwards has insisted on taking $119 million, the full amount legally available, to prevent cuts to higher education, K-12 schools and programs that provide home care givers for families with developmentally disabled children unable to care for themselves.
To reach the $304 million, the governor is proposing $63 million in other cuts, taking $44 million in higher-than-expected tobacco tax revenues and taking $78 million in unspent money from other accounts.
In the private meetings Tuesday, Henry and Harris said they want to take only $50 million from the rainy day fund, not $119 million, and pay for the difference – $69 million – by cutting public colleges and universities by $12 million, K-12 schools by $6 million, prisons by $9 million and the state health system by $44 million.
The governor rejected the proposal, according to accounts of several lawmakers in the meeting, because he opposes any cuts to K-12 schools and further cuts to higher education, which has suffered 16 separate cuts in the past nine years. The governor also said that the $44 million in cuts to health care would take money for the developmentally disabled and for the private partners that operate the state’s safety-net hospital system.
Another important number looms – 70, which is how many votes are needed in the House to take any money from the rainy day fund. Edwards may have only 50 votes for this currently, but the Republican leadership doesn’t have the 70 votes either for its proposal to use less of the rainy day fund and make deeper cuts. (The 70 is two-thirds of the 105 members in a fully constituted House.)
Henry, following the second meeting with Edwards, said that House Republican leaders would propose a new plan on Wednesday.
“We’re trying to meet in the middle,” he said in a brief interview. “We’re trying to compromise.” He didn’t respond to a later request for more information.
State Sen. Eric LaFleur, D-Ville Platte, said House Republican leaders are facing a conundrum.
“They like the power, but they don’t always like the political consequences of that power,” he said in an interview. “It requires them to make tough decisions that aren’t always popular.”
LaFleur chairs the Senate Finance Committee, which took the only meaningful legislative action on Tuesday when it unanimously agreed to send the rainy day fund debate to the full chamber for vetting. The committee did not take action, meaning it has not technically endorsed tapping the fund.
LaFleur, during the interview, said the full Senate will make that decision only after legislators on the Appropriations Committee choose the budget cuts they want to make. This means the Senate may not have anything to do for the next couple of days.
Besides the cuts proposed by the House Republicans, Edwards also objected Tuesday to the insistence by Republicans that he agree to a complicated scheme that the governor’s office said would lead to spending cuts during the next fiscal year for roads and the TOPS scholarship program and to additional cuts to higher education and K-12 schools. The new fiscal year begins on July 1.
Under the plan by House GOP leaders, they would siphon money from fees and statutory dedications that flow through a debt fund.
Advocates of the idea say that the state can use some of the money that normally only passes through the fund to pay down debt and free up money for other areas of the budget.
The Senate balked at the money-skimming idea last year after the upper chamber's budget advisers said that they worried about the unknown impact on agencies that normally receive those funds and on the state's credit rating.
Under the latest version of the proposal, about $97.6 million would be culled through the process.
The Louisiana Legislature will get eight days, five hours and 30 minutes to close a $304 mil…
The money would effectively be a cut to existing funds. For example, it would pull $19.6 million meant for the transportation trust fund that is meant for improvements to roads and other infrastructure projects. It would skim nearly $1.8 million from the Hospital Stabilization Fund that allows local hospitals to draw down more federal Medicaid matching funds, and it would take $1.9 million from the fund that goes toward paying for the popular Taylor Opportunity Program for Students scholarships.
The cuts vary but would spread across even obscure funds ranging from the state's Battered Women Shelter Fund to funds held by parish-level convention and visitors bureaus.