Gov. John Bel Edwards will present a budget proposal Monday that will include potentially devastating cuts to higher education and health care funding — the result of the looming $1 billion state budget shortfall.
In short: It won't be pretty, but Edwards is required by state law to present a budget that reflects the current revenue estimates.
"There's not a single cut that we will propose that we want to implement," Edwards, a Democrat, told The Advocate editorial board on Friday. "We don't want those cuts made."
Near elimination of the popular Taylor Opportunity Program for Students college scholarships, defunding safety net hospitals and layoffs are among some of the most drastic measures that Edwards will reveal.
"It's stark," he said.
Edwards said he hopes that it emphasizes the urgency of addressing the "fiscal cliff" the state faces when temporary tax measures, including a sales tax hike, expire July 1.
"Sometimes, people just forget how significant those things are," he said.
So far, Edwards has been unable to reach an agreement with House Republican leaders on the best path forward. He has proposed a series of measures he says will generate revenue that is lost from expiring taxes, including expanding the state sales tax to some services, eliminating some sales tax exemptions, taxing business utilities and reducing or eliminating some tax credits.
Edwards wants to call a special session in February, before the regular session begins March 12, to address the budget. Lawmakers cannot take up most revenue measures in even-numbered years.
"I'm not going to have a special session for the sake of having one," he said.
State Rep. Julie Emerson, R-Carencro, communications chairwoman for the House GOP Caucus, said she feels the chances of lawmakers reaching an agreement in time to have a special session in February before the regular session begins March 12 are about "50-50."
"Everybody sees what's ahead of us," Emerson said.
She said she believes lawmakers see that if they don't have a special session, they'll be forced to try to craft a budget in the regular session with the drastic types of cuts that Edwards' budget proposal will have.
"I think everyone is cognizant of it," Emerson said.
Edwards has said he thinks lawmakers will end the regular session without a budget, forcing a special session in June if there is no effort to address the fiscal cliff before the regular session.
"The fear is it being a failure and a waste of time," Emerson said of reluctance toward a February special session.
Edwards said he expects more information from House Republicans on Jan. 29.
He expects they will ask for four budget reform efforts, which he said he generally supports but he hasn't seen details from the other side yet.
"The devil is always in the details," Edwards said.
Those ideas include implementing co-pays and/or work requirements for able-bodied Medicaid patients, establishing a spending transparency website and revising spending caps for state government.
"They haven't put a s ingle one of those proposals on the table with any specificity," he said.
Since taking office, Edwards has called four special sessions — all dealing with budget issues.
The looming shortfall is a product of what was meant to be a temporary fix until a more permanent structural budget fix could be reached. Lawmakers agreed to temporarily increase the state sales tax by a penny and remove some exemptions for two years, giving them a window to study other options.
A blue ribbon panel of experts and other stakeholders put forth several recommendations ahead of last year's regular session, which was supposed to be dedicated to fiscal issues, but the Legislature didn't pass any of the task force's recommendations.
"The pressure we have right now is purely self-inflicted," Edwards said. "The recommendations that we are making came from the task force."
Edwards has had regular meetings with House Speaker Taylor Barras, R-New Iberia, and other Republican leaders in recent weeks — he met with Barras most recently on Friday.
"There is not a single thing that they have put on the table to solve in part or in whole the cliff," he said.
All but about a third of the state's $29 billion budget is federally funded. A large portion of the $8.7 billion from the state general fund is locked up in mandated spending, leaving higher education and health care particularly vulnerable to cuts. Edwards said he's left with cutting about $1 billion out of $3 billion free.
"I don't know that we would have partner hospital left," he said. "You're going to see cuts in Medicaid that are clearly not in our best interest."
He said he's also worried about the impact of cutting TOPS and other higher education funding on workforce development and education. He said he also doesn't think that cuts to TOPS are fair to the high schoolers who have been told that they will get the scholarships if they meet the requirements.
”It's not a cut that I want implemented," he said. "We need to deliver on that, but we need to deliver on all these areas."