A key legislative committee Friday delayed action on how to tackle a $315 million deficit from the previous financial year.
The Joint Legislative Committee on the Budget put off a decision until December, with the agreement of the Edwards administration.
“I’m not sure what is going to change between now and then,” said Senate Finance Chairman Eric LaFleur, who chairs the panel that oversees state finances when the Legislature is not in session.
“There may be some movement, but we’re still going to have to make cuts next month," he said.
When all the bills came in for the fiscal year that ended June 30, the state found it was short of revenues by about $315 million. Because the state is required to balance its budget, cuts to spending are necessary.
Legislators attacked the problem during the three sessions earlier this year by raising about $1 billion in tax and fee increases and by cutting spending, sometimes in popular programs, such as the Taylor Opportunity Program for Students. TOPS pays tuition at public colleges for students achieving modest academic results and was cut for the first time in order to help make budget.
Students will have to come out of pocket to pay for college in the semester that starts in January. The timing caused some concern among legislators on the joint budget committee.
State Rep. Katrina Jackson, D-Monroe, said she told her constituents that tax increases were necessary to protect higher education institutions, whose budgets had been cut significantly over the past seven years. Then, came the news that TOPS wouldn’t be funded fully, followed by Gov. John Bel Edwards’ budget balancing proposal that included $18 million in spending reductions for the state’s colleges and universities.
She asked for a delay to see if money could be found somewhere to cover that amount.
“We’re dealing with trying to explain to our parents on why TOPS is not fully funded,” Jackson said.
“We’re going to be back here making more cuts,” responded Commissioner of Administration Jay Dardenne, Edwards’ chief budget architect.
The cut, which equals about 2 percent of colleges' general state financing, is contained in a package of budget adjustments sought by the governor to offset gap left from the last fiscal year.
Edwards is proposing to reshuffle some financing, tap into available pots of money and make cuts. The largest piece of the plan involves delaying $152 million in payments to health providers that care for Medicaid patients. The payments will be shifted into the next fiscal year.
"Given the ongoing financial crisis of our state, nothing is painless anymore," the Democratic governor said in a statement. "However, we knew this shortfall existed and worked with state agencies to prepare for it without causing unnecessary harm."
All but $36 million of the cuts can be made without legislative approval.
Statewide elected officials would be spared cuts, as would the transportation, prisons and tourism agencies. Reductions would hit the education, veterans’ affairs and public safety departments, along with the governor's executive department.
After all the reshuffling, the health department would take a net state cut of $12 million, a less than 1 percent hit to its state financing — and would postpone $152 million in payments to service providers in the Medicaid program.
This deficit stems from drops in employment that are hampering personal income and business tax collections, officials said earlier this month. Legislative economist Greg Albrecht said Louisiana’s economy will start improving, slightly, in 2017.
The Revenue Estimating Conference also meets next month, which will shed more light on Louisiana's often-struggling budget outlook.
The Associated Press contributed to this report.