Louisiana Spotlight: Another budget crisis, more financial uncertainty likely again next year _lowres

Associated Press star reporter Melinda Deslatte in Baton Rouge, La., Monday, April 13, 2015. (AP Photo/Gerald Herbert)

At the Louisiana Capitol an urgent scramble is under way, with the governor, lawmakers and other state officials desperately searching for that elusive item in state government operations: savings.

With budget problems threatening programs and taxes off the table, the hunt is on for ways to cut state costs without damaging critical services.

Gov. John Bel Edwards’ administration is cutting contracts and shrinking staff. Secretary of State Tom Schedler is proposing to shed some of the small, local museums he can no longer afford to operate. And lawmakers are seeking to add new hurdles for pay raises, trim costs on state leases and chip away spending in other areas.

Even after lawmakers approved more than $1.2 billion in taxes for next year in a special legislative session, Louisiana is short $750 million of what is needed to continue all existing programs and services in the budget year that begins July 1.

Edwards, a Democrat, is warning of deep and harmful cuts to colleges, health care services and many other programs.

His administration says under current budget scenarios, Louisiana only will be able to pay for safety net services for the poor at hospitals and clinics in New Orleans and Shreveport — and maybe in Lafayette and Baton Rouge — next year. Similar services in Houma, Lake Charles, Alexandria, Bogalusa and Monroe likely would be shuttered.

Talk continues about a second special session in June or July to consider additional tax hikes to stave off the cuts. But many Republican lawmakers remain resistant to taxes, and it’s unclear if there’s enough appetite in the majority GOP Legislature to boost taxes further.

Agency chiefs have turned to fee increases, hoping to raise money for their departments by charging people for services. Only fees, not taxes, can be raised in the current regular legislative session. The fee hikes, however, are meeting opposition in the House.

But while lawmakers are taking aim at the state’s spending practices, many proposals are modest and the ideas to emerge so far won’t bail out the budget.

The House has voted to cut spending on public art, a possible minor savings on state construction projects, but not for the operating budget. Lawmakers in the House agreed to a measure aimed at ending some pricey outside lease deals for state agencies if space is available in Louisiana-owned buildings, which could shrink some department spending.

The Senate has voted to put restrictions on last-minute pay raises for outgoing governors after former Gov. Bobby Jindal’s administration enacted millions in salary hikes before walking out the door. That could save money in later years but won’t do anything to help with the state’s short-term budget woes.

A new task force, pushed by House Republicans, is digging into budget and tax policy to recommend structural changes. Similar studies have been done repeatedly, but the most sweeping suggestions largely have gathered dust as lawmakers have been reluctant to take the politically difficult votes required for true reform efforts.

The search for savings could boost support — or at least lessen Republican resistance — for one of Edwards’ top priorities, a planned expansion of the Medicaid program to give health insurance coverage to the working poor.

The Edwards administration estimates the expansion could save Louisiana $124 million in the upcoming budget year, by taking advantage of enhanced federal financing streams available to pay for health services.

The most lucrative area where lawmakers could scale back spending, however, seems to be a difficult one for the Legislature.

Lawmakers have been unwilling so far to cut deeply into billions of dollars in state tax breaks. An ongoing Senate review of those tax rebates, credits, deductions and exemptions has drawn ardent defenders for most of the programs.

As the search for savings continues, Edwards is expected to unveil Friday his budget cut proposals for the upcoming budget year. The governor’s chief financial adviser, Commissioner of Administration Jay Dardenne, warned lawmakers they won’t like what they’ll see.

“It is not the kind of government that anyone would like to present to the people of Louisiana,” Dardenne told senators.

Melinda Deslatte covers Louisiana politics for The Associated Press. Follow her at http://twitter.com/ melindadeslatte.