The House Appropriations Committee began holding budget hearings this week, and Chair Jack McFarland will be looking for cuts.
That’s not because Louisiana is facing a revenue crunch. In fact, the state government is running a surplus of close to $900 million, if you add up the extra cash from last fiscal year and the current one.
But state economists are projecting shortfalls in future years, federal spending cuts are creating higher costs for the state, and lawmakers are itching to slash the state income tax rate even further during next year’s fiscal session. Senate President Cameron Henry says his goal is to get the current flat rate of 3% down to 2.5% next year, which would cost about $500 million.
Gov. Jeff Landry has proposed a largely “standstill” $47 billion budget, thanks in part to hundreds of millions of dollars in savings he credited to his administration’s efficiency efforts. But McFarland and other key lawmakers hope to figure out a way to spend a little less than the governor has asked for to prepare for the future.
“The last thing we want to do is to create or increase recurring expenditures,” McFarland says.
This year’s most contentious spending debate is likely to center around Landry’s proposed $44 million increase for the LA GATOR voucher program. Senate Finance Chair Glen Womack says he was less worried about the initial expense than about how costs could grow over time.
“What’s it going to look like in five years, 10 years for our state?” Womack says. “How’s it going to be funded?”
Landry also is asking for an additional $82 million for the Department of Corrections. McFarland is fielding requests to spend more on early childhood education and community-based waivers that support in-home health care, and he also expects to pay off some judgments against the state this year.
Unless they reverse course, this will be the first year that lawmakers will not be able to use vehicle sales tax dollars for general fund spending, notes Rep. Jerome Zeringue, who replaced now-New Orleans City Council member Jason Hughes as Appropriations vice chair. He expects legislators to stand by that decision, but it’s one more factor to keep in mind.
