‘Historic’ changes for Louisiana food stamp program as Gov. John Bel Edwards inks executive order _lowres

Advocate staff file photo by HILARY SCHEINUK – On his 100th day in office, Louisiana Gov. John Bel Edwards fields questions from callers during his first "Ask the Governor" radio show with Jim Engster at Louisiana Radio Network in Baton Rouge.

Gov. John Bel Edwards says it's good that the state ended its most recent budget cycle with a surplus, despite some pushback from Republican critics who have argued that the news means the state's finances were not as dire as the Edwards' administration had presented when lawmakers approved a sales tax hike earlier this year.

"We know it's going to be a surplus, which is a good thing," Edwards said Wednesday during his monthly call-in radio show. "The economy performed better than the Revenue Estimating Conference predicted."

"It certainly beats a deficit," he added.

After years of repeated budget crises, the Louisiana Legislature approved in June an extension of part of a sales tax that would have otherwise expired.

The final result of setting the sales tax rate at 4.45 percent came after weeks of debate among Edwards, a Democrat who had pushed for a 4.5 percent sales tax rate to address an anticipated budget deficit, and opponents, largely led by House Republicans, who wanted a smaller extension or none at all.

The sales tax rate, which had been 5 percent for the past two years, would have dropped to 4 percent on July 1 without legislative action. State leaders, guided by economist projections, had estimated a nearly $500 million gap if no additional revenue was generated to replace the expiring sales tax.

Edwards argued the state would be forced to make deep cuts to state services. Before a final budget was negotiated this year, the Edwards administration sent thousands of letters to nursing home residents warning that funding for their care was at risk.

The actual size of the surplus hasn't yet been recognized by the state as final audits are being performed, but the Revenue Estimating Conference is slated to meet Thursday and will likely get a more complete picture of the state's latest fiscal outlook.

State Treasurer John Schroder, a Republican and ex-member of the state House, has said expects the surplus could be more than $300 million.

"Having a surplus is a good thing, but not on the backs of Louisiana citizens," Schroder said in a statement Wednesday. “One of my biggest anxieties is that the surplus will be used as a slush fund for pet projects.”

State law requires that budget surpluses can only be spent on one-time expenses, including debt payments and construction projects. Leaders can't put the money toward recurring expenses in state government, and the money could not have rolled over to cover budget gaps in the fiscal year that began July 1.

During his radio show, Edwards didn't identify where he thinks that the money should go but he said he will work with legislative leaders on a plan.

Edwards said he believes that the revenue boost is due to economic growth.

"We've been able to stabilize the situation in Louisiana," Edwards said. "I'm excited about it and I hear from people all over the state of Louisiana that they are doing better."

The news of the surplus has prompted some to publicly question the push to extend a portion of the expiring sales tax hike.

"If this is accurate, it appears the conservative House Republicans were right to question the governor's claim of a need to raise taxes to cover a purported ($400 million to $500 million) deficit," Rep. Nancy Landry, R-Lafayette wrote on twitter. "His unreasonable demands resulted in excess taxation for (seven years)."


Follow Elizabeth Crisp on Twitter, @elizabethcrisp.