The Louisiana Legislature closed a $304 million mid-year budget deficit after a short special session last month.
Lawmakers spent 10 days in Baton Rouge working out a solution to the mid-year budget gap. Discussions revolved around how much money would be used from the state’s rainy day fund.
The final plan for closing the shortfall in the budget, which ends June 30, relies on $99 million from the state’s rainy day fund. The rest will be made up through cuts to state agencies and other funding sources.
State Representative Dodie Horton (Dist. 9) was skeptical going into the session because she was not in favor of using money from the rainy day fund. However, she is pleased with the outcome of the session.
“When I was elected, I told my constituents that I was going to work in a bipartisan manner whenever possible and without compromising my core beliefs. That’s what I feel like I just did,” Horton said. “We stood together. We stood firm. Moving forward, I hope we can continue to look at ways to live within our means without effecting the critical programs that help our most needy citizens.”
By repeatedly using the rainy day fund and other one-time money sources, Senator Barrow Peacock (Dist. 37) said it created a bigger problem for the state.
“We’re now going into a session in April with a $400-plus million deficit to start off with,” he said. “That’s why I voted against the use of the rainy day fund. There are some people out there that say we need to deplete all of our rainy day funds. I, honestly, think the rainy day fund should be there in case we have another emergency – another flood, a hurricane or forest fires. We may need that money and I would hate to see us not have that.”
He continued: “We are basically going into next year’s [budget] with a larger deficit, which is positioning us to have a potential income tax increase starting in the fall, which I’m opposed to.”
A solution, Peacock said, is to have framework within the tax system that provides for the private sector to produce jobs.
“Until we get our economy going back, we’re going to continue to have problems with financing in our state,” Peacock added.
The state’s focus now shifts to the next budget cycle. The Louisiana Legislature will convene in Baton Rouge April 10 for the start of the new session.
In keeping with his commitment to honest budgeting, Gov. John Bel Edwards’ budget proposal does not include one-time money for recurring expenses or fund sweeps, includes input from every agency across state government, and spends only funds the state is projected to take in over the next fiscal year. The budget is balanced by recognizing $440 million less revenue for the fiscal year that begins July 1, 2017.
“We still have a lot of work to do,” Edwards said. “It’s going to be hard work. We’re going to make the bold decisions that are necessary so that the frequency of these mid-year deficits is less.”
Included in the budget proposal is a list of priority expenditures identified by the administration. In the regular session, Gov. Edwards will submit a plan to the legislature to fund these priorities, including fully funding the TOPS program. As part of the list, Gov. Edwards has also indicated his intent to put more funds into the classroom by increasing the base MFP.
“My goal is to fully fund critical priorities of our state, most notably the TOPS program and transportation, but we cannot do that without making reforms and without additional revenue,” Gov. Edwards continued. “This is a critical moment for our state, but I am confident that we can make the changes we need to so the priorities I have identified can be funded for the people of our state.”