The Budget Bill Is Approved- How Will This Affect La. Moving Forward?
It took two sessions to pass what could have been done in one.
On Friday, the Louisiana Senate passed the House-approved bill dealing with the state’s $28 Billion operating budget that would appropriate every available dollar. When the Regular Legislative Session came to an end on June 8, the House and Senate differed on the appropriation. The Senate wanted 100% appropriation while the House wanted 97.5% appropriation, saving the 2.5% as preparation for possible mid-year budget cuts.
So, how did the House and Senate bridge the divide and come to this conclusion – 100% appropriation?
Once the Special Session started, 11 House Republicans broke party lines and voted with House Democrats, who were eager to back the Senate-approved plan. Once the numbers were there in the House, it became a mere formality for the Senate to approve the bill, which Governor John Bel Edwards had been advocating for.
“We adopted a budget that got us the biggest bang for our buck and put money behind our priorities,” says Senate Finance Chairman Eric LaFleur of Ville Platte to Louisiana Radio Network. “That’s something we’re always accused of not doing.”
But former state Representative Brett Geymann disagrees.
“To say that you’re funding priorities, all that goes out the window as soon as midyear cuts get here,” says Geymann to KPEL. “Midyear cuts are so devastating for departments (such as Healthcare and Higher Ed.) to overcome. It’s better to let Higher Ed. know what dollars they are going to have (at the beginning of the fiscal year) so they can make whatever adjustments they need to make. If they’ve already spent that money in the first half, it’s almost like a double cut for them. They have to make a years worth of cuts in 6 months.”
With midyear budget cuts happening nearly annually here in Louisiana, there’s been much debate over the Revenue Estimating Conference’s yearly budget numbers. These numbers are used by lawmakers to project our growing budget each fiscal year.
“I think they tend to probably go on the high side of the estimate that there is more money available to spend,” says Geymann, who points to lower than expected revenues being generated from oil and sales taxes over recent years.
Much has been discussed on how TOPS would be funded in the future. Proponents of the newly signed budget bill say TOPS and Higher Ed., as well as the Department of Children and Family Services and the Department of Corrections, will be fully funded in this legislation.
“Those are two departments that we thought over time have been neglected,” says Lafleur.
When asked, Geymann mentioned the full funding of TOPS as a positive.
“I think most people you talk to across the state believe it’s a program that we created and that we promised the students if they met certain goals that money would be there for them. I think to honor that commitment is something most people believe we ought to do.
“One other positive is that we didn’t raise any ridiculous taxes in order to fund even more growth in the government spending,” notes Geymann, as he cited Governor Edwards’ failure to get the CAT tax passed through the Legislature.
So, what’s next? Temporary taxes, such as the 1-cent sales tax increase that was approved in 2016, will be going off the books. This means a loss of over a billion dollars in revenue next fiscal year (Fiscal Years begin on July 1).
Senate President John Alario has already said he expects another special session – this time on fiscal issues – to be after January 1, reports Julia O’Donoghue with The Times Picayune on Twitter. She reports Governor Edwards announced earlier today that the fiscal cliff for next years is $1.2 Billion, not $1.6 Billion as previously announced.
“We’re like a spaceship coming in from space and our parachutes don’t open because we forgot to pull the parachute release handle,” says Metairie Senator Conrad Appel to LRN, who voted against the budget bill in the Special Session, yet voted for it in the Regular Session.
“I think the driving force behind the January session will be to generate more revenue,” says Geymann. “It’s always the default position.”
Geymann says he expects lawmakers to look at possibly making permanent the temporary 1-cent sales tax increase and tax credits and rebates for businesses.