Louisiana’s state budget shortfall is now estimated at about $600 million — 20 percent smaller than previously thought.
During a Monday budget briefing, Gov. John Bel Edwards’ administration continued to caution legislators that the outlook for the state spending plan that begins July 1 still would require deep cuts to funding for scholarships awarded through the popular Taylor Opportunity Program for Students and other state support to higher education and health care, if legislators don’t find ways to fill the remaining gap.
“It’s going to be a debate over priorities and how much money is available,” Commissioner of Administration Jay Dardenne told the Senate Finance Committee, explaining that the gap previously estimated at about $750 million has shrunk, thanks to savings expected when the state expands Medicaid under the federal Affordable Care Act later this year.
Dardenne said the figures could continue to shift — even as legislators look at other ways to carve out savings.
The House Appropriations Committee — the first step in the budgeting process — is expected to reveal its plans for the budget in the coming weeks. The budget bill, House Bill 1, is expected to make its way to the House floor as early as May 12, before the Senate gets its crack at it.
Edwards has presented a spending plan to legislators that would drastically change TOPS because of the cuts, if legislators don’t move to raise more revenue, causing thousands of students to lose their scholarships.
The state previously faced a $2 billion hole in the coming year’s budget, but legislators during a special session earlier this year raised taxes and made other cuts to begin to bridge the gap.
Lawmakers must pass a balanced budget but can’t raise revenue during the current legislative session, under state law. Edwards, a Democrat who took office Jan. 11, is expected to call a second special session after the regular session ends June 6.
Edwards has frequently noted that he’s looking to a new task force to come up with a short-term plan for filling the immediate gap, as well as long-range plans lawmakers can consider during the 2017 legislative session that will focus on financial issues.
Edwards said during a recent meeting with reporters that he expects the task force recommendations will be similar to recommendations that have been produced by groups in the past.
“I don’t believe the proposals that we’ll see coming out of the task force will be different from before,” Edwards said.
Jim Richardson, an LSU economics professor who co-chairs the latest task force, said the group will spend the next month evaluating proposals that can be passed during the second special session.
But some legislators say they are looking for more from the state’s new leader — as far as his vision for state services, including higher education, health care and the state’s tax base.
“I hear nothing from the Governor’s Office on where he wants to take the state on restructuring all these elements,” said state Sen. Conrad Appel, R-Metairie. “Where are we going?”
He said that promoting bigger picture ideas for the state instill confidence in the government process.
“I’m thinking policy — big policy issues,” he said. “That’s the kind of stuff that I’m not hearing.”
He added that short-term proposals “are frightening to citizens.”
Already some lawmakers, including House Appropriations Chairman Cameron Henry, R-Metairie, have indicated they would prefer the state look elsewhere for cuts and spare TOPS in the crafting of the spending plan.
As the administration presented its latest figures to the Senate panel, the House Appropriations Committee approved a bill that would fund TOPS by cutting $183 million in professional, personal and consulting contracts. House Bill 74 now heads to the full House for consideration.
“Let’s put some money where our mouth is and say we’ve cut some of these contracts,” said state Rep. Dee Richard, of Thibodaux, who has no political party affiliation. “Let’s save TOPS.”
Contracts have become a popular point of contention among lawmakers who are cool to the idea of raising more taxes, after agreeing to sales tax hikes and other increases to bring in more than $1 billion for the state.
Randy Davis, assistant commissioner for Division of Administration, said Edwards’ administration is in the process of evaluating contracts for possible cuts.
But officials agree it’s not even clear how many professional and consulting contracts the state has, or how much they are worth.
“We’re not sure what’s out there,” Richard said. “But it’s a big figure.”