For starters, it’s important to recognize that representatives, senators and the administration are under no obligations, other than moral, to pass a budget within the confines of a legislative session. The budget only has to be in place before the July 1 opening of the next fiscal year. Moreover, Louisiana has never, at least in recent history, entered a fiscal year without a budget.
But what if it does happen? With the Capitol class now averaging two special sessions per year, all of which have been defined by gridlock and sour moods, it’s a fair question to ask. Based on the political landscape of the ongoing regular session, it’s also an important question.
Being budget-less is not unheard of in the United States. The Illinois Assembly, for example, failed to pass a budget for fiscal years 2016, 2017 and most of 2018. Other states have failed to pass budgets, too, leading to government shutdowns in certain cases. The Associated Press has reported that two dozen states have this shutdown option in their laws, but Louisiana is not one of them. Plus the Bayou State’s laws are “silent,” in general, when it comes to available avenues, according to Commissioner of Administration Jay Dardenne. “We’re very much in uncharted territory,” he says. “Obviously, it’s being looked at.”
Matthew Block, the governor’s general counsel, sounded just as uncertain when interviewed today. “We don’t have a firm or final answer right now on what will happen in that—hopefully—not very probable or possible eventuality. The Constitution doesn’t give a whole lot of guidance.”
Pushed for likely scenarios, administration officials, who remain optimistic that a budget will be passed, did take some educated guesses about what would happen in Louisiana if that doesn’t happen. State taxes and other sources of revenue wouldn’t necessarily disintegrate, so money would keep coming in. The rub is whether the state and its agencies would be allowed to spend the cash under such a predicament. In the short-term, the state could struggle to make payroll while keeping afloat the Legislature, courts, police, corrections and all other departments. In the long term, Louisiana’s credit rating would probably be devastated.
What Louisiana would have to do under such circumstances was a topic of discussion between the governor’s office and the treasury during the 2017 special session. Those conversations were halted when a budget emerged from the rubble, Block says. As of this afternoon, those talks haven’t resumed, especially since state officials are still viewing the cliff’s edge from a safe distance. “We can see it,” Block said, “but we’re not there.”
With little else to lean on for guidance, Illinois’ recent past may present our best case study. Lawmakers there failed to pass a budget for more than two years before eventually adopting a plan late for the current fiscal year. The stalemate took roots when GOP Gov. Bruce Rauner was elected alongside a Democratic-controlled statehouse. (The Republican governor, a multimillionaire, has since blamed his budget failures on the Democratic House speaker.)
What happened on the ground in Illinois after this legislative inaction is hard to believe. Government payroll became sporadic, prompting one Illinois lawmaker to drive an Uber to support his family. State-funded entities, among them Medicaid and mental health providers, weren’t paid on time and began suing the assembly en masse for their money. Homeless and domestic violence shelters were shuttered, lottery winners didn’t get their prizes and various workforces were thinned. Prisons were in jeopardy of closing and students left state universities by the thousands out of fear their institutions, which receive no constitutionally-dedicated funds, would not survive.
In an effort to stop the bleeding, the Illinois Assembly gathered for special sessions that produced six-month stopgap measures, but the money always ran out. Then one day Illinois officials took out their calculators and realized the state had more than $15 billion in unpaid bills—with an annual average budget of $36 billion. Illinois managed to mitigate that figure with state bonds, leaving it with a now-$6 billion deficit and the lowest credit rating in the country.
Putting doom and gloom from across the state line aside, Louisiana officials sound confident that our Legislature will pass a budget by the end of June, if not at the month’s outset. Block, however, argues that some legislators do not fully understand the repercussions of budget inaction. “Some believe the budget automatically rolls over and we keep operating under the previous year’s budget, which is not the case,” he says.
Jeremy Alford will publish a daily update throughout the legislative session on Daily Report PM. Alford reports on Louisiana politics at LaPolitics.com. Follow him on Twitter, or on Facebook. He can be reached at JJA@LaPolitics.com.
