Monday, 04 June 2018 19:43

Tic Toc! Louisiana budget clock tolls if legislature, Edwards don't fix cliff

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ticktocTic Toc. Tic Toc.

Roughly nine hours to go. When the clock strikes 12 midnight tonight, despite commonly-held belief, the princess won’t turn into a rag. But, if the Louisiana legislature and Louisiana Governor John Bel Edwards do not resolve their differences, the bells would have tolled and the Louisiana legislative session will have collapsed again over the issue of the budget. Some call this process, fixing the fiscal cliff.  


On Sunday night, the Senate approved a budget it considers to be a compromise which would raise the sales tax to 4.5 cents instead of the five pennies which was ushered in during the 2016 special session to deal with a substantial budget gap Edwards encountered when he first took over the governor’s mansion from Bobby Jindal.

This morning, the Republicans in the House of Representatives decided to stick to the 1/3 of a penny increase, making the sales tax 4.33 cents instead of 4.5 cents approved by the Republican-controlled Senate.

Edwards has wanted $648 million in increased revenue which would have fully balanced the budget for this upcoming year.  However, his options are limited and with the Democrats operating as a minority in both houses of the legislature, a silver slipper of a 4.5 cent compromise could be left on the legislative floor.

Louisiana starts a new fiscal year July 1.

Below is a fact sheet from the Louisiana Governor’s office. Also, below are legislative tweets

On Sunday, the Louisiana Senate approved a budget compromise that passed with strong, bipartisan support.  The measure was approved by a vote of 38-1. This fiscally responsible plan funds critical priorities across the state, reduces the tax burden on the people of Louisiana by over $500 million and makes strategic spending cuts of more than $200 million.

Reducing the tax burden on the people of Louisiana...

On June 30, 2018, $1.4 billion in revenue is expiring - a result of temporary measures passed by the legislature in 2015 and 2016.

Based on the current compromise proposal in the Senate, only $540 million of that revenue would be replaced, while reducing the state sales tax from its current rate of 5% to 4.5%.

That, coupled with federal tax changes, will result in a reduction of the tax burden on the people of Louisiana by over $500 million beginning on July 1, 2018.

Strategic Spending Cuts

Under the Senate proposal, strategic spending cuts of more than $200 million would take place across state government.  With adequate funding, the administration can better manage and allocate spending cuts with the bipartisan revenue proposals approved by the Senate. In addition to cutting statutory dedications by approximately 2%, more than $116 million in spending reductions are included in the Senate budget compromise. A complete list of those spending reductions is available in the attached document.

...while still funding critical priorities, including:

· Higher education, TOPS and Go Grants

· Health care services for senior citizens and those with disabilities

· Medical schools in Shreveport and New Orleans

· Public-private partner hospitals across the state of Louisiana

· Law enforcement, Sheriffs and District Attorneys

· A phased opening of the Acadiana Center for Youth in Bunkie, Louisiana. This new facility has sat empty following its construction because of a lack of funding, yet the state has been required to pay more than $15,000 per month in utilities.

Mandatory Cost Increases

A major component of the overall plan is the ability to manage mandatory cost increases, while still funding priorities across the state.  These mandatory cost increases total $250 million and include funding for election expenses, corrections facilities, and contractual obligations that pre-date this administration, such as Medicaid cost adjustments and funding for costs increases in the Department of Children and Family Services.

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