The Louisiana state Senate on Friday passed a state spending plan that uses hundreds of millions in federal aid to plug holes and freezes state pay for workers, as lawmakers are set to hash out which tax breaks for businesses they will pass in the final days of session.
The more than $35 billion state budget for the upcoming fiscal year has garnered little controversy or debate among lawmakers. The Republican-led Legislature has largely agreed with Democratic Gov. John Bel Edwards to use more than $1 billion in coronavirus aid to help patch up the current and upcoming fiscal year budgets.
The state House needs to approve the changes made by the Senate before it goes to the governor. Budget bills often go to a conference committee where handful of legislators try to strike a deal in the final days of session. The current session must end by Tuesday evening.
In the budget bills passed Friday by the state Senate, $500 million in federal coronavirus aid would be used to offset a severe drop in revenue, along with a $291 million injection in new Medicaid funds and $90 million in the state’s rainy day fund.
The biggest changes made by the Senate include freezing pay raises for workers across state government, including the Legislature and judiciary. The move will put about $60 million in a fund that could be used in October to plug holes in the budget if the financial picture worsens, or could be returned to agencies to use on pay raises. The Senate version of the budget also plugs in $1.7 billion in mostly federal funds to pay for a new hospital payment formula that has been the largest source of disagreement between lawmakers and the administration.
“I think the thing that was most upsetting for our committee was we got information two weeks before,” said Senate Finance Chairman Bodi White, R-Central. “This is a complete shift in how we fund hospitals.”
The operating budget, carried in the Senate by White, also restores some budget cuts to Motor Vehicle Offices, Secretary of State Kyle Ardoin’s Office, colleges and others.
The Senate backed the bill on a 38 to 0 vote, after an effort by Sen. Karen Carter Peterson, D-New Orleans, to restore some cuts and the pay raises failed.
“The people who make this state run are those civil service employees that we should take care of,” Peterson said.
Republicans who crafted the pay freeze said it would send the wrong message to business owners and private sector workers who lost their jobs to boost pay for government workers. The Senate rejected Peterson’s amendment on a 31-6 vote.
The budget will also include $37 million more in unclaimed property funds, which Republicans intend to use to pay for tax breaks for businesses, after Gov. Edwards and Republican Treasurer John Schroder reached a deal on the long-simmering dispute over the money. The deal will put a constitutional amendment on the ballot in the fall that, if approved by voters, would set up a fund for unclaimed property funds in the future, but deliver tens of millions to the state budget for the fiscal year that begins July 1.