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Monday, 07 March 2016 19:56
Edwards sounds siren alarm over 48 hours to Louisiana budget collapse
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With Louisiana on the precipice of budgetary collapse, with Universities on the brink of going dark, Louisiana's Governor John Bel Edwards, who has been in office for less than two months, is calling the siren cry.

With fewer than 48 hours to go until the end of the special legislative session, Governor John Bel Edwards outlined the drastic cuts that are scheduled to take place in the areas of health care and higher education if the legislature does not bring in additional revenue to solve the current budget shortfall.  For the current fiscal year, Louisiana faces a more than $940 million deficit that must be addressed by Wednesday, Mar. 9 at 6 p.m.  For the fiscal year that begins on July 1, Louisiana faces a more than $2 billion deficit. Gov. Edwards has offered the only comprehensive plan to solve the budget deficits that includes both spending cuts and asks for a balance of revenue raising measures from businesses and individuals. 

“Since we first identified this historic problem, I have called on the legislature to work with me to stabilize our budget with a combination of strategic spending cuts and a responsible way to raise additional revenue that doesn’t overly burden our citizens,” said Gov. Edwards.  “While the comprehensive plan I proposed is not something I wanted to present, it does represent the best path forward for our state.

“There are some who are suggesting that we further ask individuals to shoulder more of this burden to fix our budget without asking businesses to contribute in a balanced approach. Unfortunately, we are running out of time and some members of the legislature appear ready to accept the catastrophic cuts that will take place when we adjourn in 48 hours.  If my plan is not acceptable, it is up to those members to offer an alternative, which has not happened. We will be here working until the very end to solve this problem, but if some members refuse to accept this reality, they should be prepared to defend these cuts to their constituents.”

Gov. Edwards proposed a balanced set of revenue raising measures that asked both businesses and individuals to contribute to solve the budget crisis, coupled with more than $160 million in spending cuts. 

Gov. Edwards' proposed $160 million in spending cuts include:

  • $21 million made by an executive order
  • $38 million recommended by the governor to the Joint Legislative Committee on the Budget (and approved by the committee)
  • $29.5 million recommended to the legislature
  • $70 million in supplemental requests from agencies that will not be fulfilled

To date, the legislature has failed to pass enough revenue raising measures to correct the shortfall and failed to rally behind a proposed set of spending cuts outside of the $160 million proposed by the governor.

If the legislature fails to fill the remaining deficit for the current fiscal year, which ends June 30th, higher education institutions and the health care industry will begin implementing drastic cuts upon adjournment of the special session. Some of those cuts include:

Health Care Cuts:

  • 17 percent cut this year to each of the 10 safety hospitals in Lake Charles, Alexandria, Bogalusa, Houma, Monroe, Baton Rouge, Lafayette, Shreveport, and New Orleans. (Already, the privately-managed boards of two of these hospitals have asked their financial managers to consider ending these public-private contracts with the state if these cuts happen.)

Detailed information on the cuts to the Department of Health and Hospitals is available by clicking here.

Higher Education Cuts:

Louisiana State University System ($40.5 million):

  • This budget crisis has already resulted in 15 percent fewer academically gifted students responding to LSU’s student orientation program for next year – already hurting enrollment
  • LSU Health Sciences Center Shreveport will not be able to make payroll in June
  • Will not be able to train firefighters for the state, as required by Property Insurance Association of Louisiana, meaning Louisiana homeowners’ insurance rates will rise, directly hitting Louisiana residents’ pocketbooks

Southern University System (approximately $4 million):

  • Furlough employees without pay for 3 to 12 days over the rest of the fiscal year
  • Downsize or eliminate one of four agriculture research programs
  • Cancel summer youth programs for 700 students from across the state

Southeastern Louisiana University (Hammond):

  • Withhold budgeted merit increases for the faculty/staff (have not had merit/cost of living increases since 2009—7 years ago)
  • Lay off 15 staff members, furlough more than 200 faculty/employees
  • Hiring freeze which will hurt accreditation efforts

University of Louisiana at Lafayette:

  • Furlough more than 650 employees every Friday without pay, equals a 12.5% cut in pay to those employees’ salary through year-end
  • No funding for research centers
  • Hiring freeze

Nicholls State University ($2.2 million):

  • Furlough employees without pay, starting March 15; makes regional accreditation problematic
  • Jeopardize ability to meet operations and bond covenant requirements for future fiscal years

Northwestern University (Natchitoches):

  • Furlough more than 200 9-month faculty members without pay for six days during the next four months
  • Furlough more than 380 other employees without pay for 12 days during the next four months

University of Louisiana at Monroe:

  • Furlough maintenance workers one day each week without pay—so buildings will be serviced every other day instead of every day

A complete list of cuts that would take place at higher education institutions is available by clicking here.



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