As the 2015 Legislature moves toward its climactic tax-and-spending battle, we can take comfort in the fact that we’ll have to do almost all of this again next year.
Yet that is the bottom line: Gov. Bobby Jindal and lawmakers have dug the state such a budget hole that getting out of it requires more heavy lifting than just this year’s tax increases and spending cuts.
Next year, more than $500 million in one-time money won’t appear, and many of this year’s “fixes” are short-term changes that do not improve the state’s financial position.
What lawmakers and Jindal will achieve, if all goes well, is a discouraging prospect.
“I’m still optimistic that we’ll be able to get to the end of the session with a balanced budget that doesn’t raise taxes and invests in higher education and health care,” Jindal told reporters Thursday.
It is difficult to unpack all the misleading statements in that one sentence.
By law, the Legislature must approve a balanced budget every year. Jindal and lawmakers have balanced the budget in name only in recent years by drawing down various reserve accounts, selling state property, tapping legal settlements and approving a tax amnesty program. The budget that legislators approved last year contained $1.2 billion in one-time money not available this year.
That huge use of one-time money combined with a drop in oil and gas taxes produced the $1.6 billion projected deficit that lawmakers have been grappling with this year.
Investing in higher education? At the very best case, so far, higher education avoids significant new cuts.
Although many of Louisiana’s prominent citizens signed a statement last weekend applauding the tough votes by the House to suspend some tax exemptions, the reality is those votes merely staved off bigger cuts to LSU and other institutions across the state.
Nor is health care yet whole, and it’s not at all clear where the recurring taxes to pay for recurring health care needs will come from: Lawmakers in the Senate ponder a $163 million shortfall in funding critical services, including money for the private companies that manage the public hospitals and so-called legacy costs from the privatizations that will be borne by the LSU medical schools in Shreveport and New Orleans.
Another $150 million in state aid for the Bayou Health program, the so-called Medicare D program and several other health programs are not yet funded — money that the agency will inevitably have to spend.
Even if all that is patched up, to achieve what Jindal calls balance, the use of one-time money will hobble the budget next year.
Again, if all goes well: A May 25 report from the Legislative Fiscal Office said that at least $524 million in one-time money is already baked into the House Bill 1 cake, now awaiting action in the Senate Finance Committee.
The one-time fixes include $50 million from the tax amnesty program that is ending; $124 million from a one-year paydown in debt service that won’t be available next year; $42 million in disaster relief money for higher education and health care programs that won’t be available next year; and $103 million through a one-year suspension of tax breaks for business that the House has approved and that is awaiting Senate approval.
“Nothing on the table permanently fixes the structural gap,” said Greg Albrecht, the Fiscal Office’s chief economist.
In Louisiana, we have much to look forward to next spring, what with Mardi Gras and all. But long before Fat Tuesday, and in fact before Twelfth Night, the lawmakers might be amid their next budget crisis.