Gov. Bobby Jindal’s administration has started sifting through agency budget proposals as it works on a plan to close next year’s anticipated $1.4 billion shortfall, though the governor’s chief budget architect says the hole isn’t quite as large as it appears.
Commissioner of Administration Kristy Nichols tells The Associated Press about $200 million of the gap for the fiscal year that begins July 1 is tied to inflationary increases that don’t necessarily materialize each year. Those presumed increases include items such as state worker pay raises and assumptions that enrollment in Louisiana’s Medicaid program and the use of its services will grow.
Nichols says another $300 million of the gap can be filled by enacting money-saving recommendations from a consultant hired by the Jindal administration or by finding other available revenue sources.
“We have items that will significantly reduce the $1.4 billion,” Nichols says. “We’re working on every option to get the number down.”
Even with those adjustments, a hefty gap remains, and Nichols acknowledges cuts will be needed.
Nearly $1 billion of the shortfall is because Jindal and lawmakers used patchwork financing to balance this year’s $25 billion budget, and those dollars won’t be available in the next fiscal year. The piecemeal financing included savings from an advanced debt payment, trust fund dollars, money from a tax amnesty program, loan repayments and pharmaceutical settlement dollars.
The Jindal administration is expected to propose similar types of “one-time” money to plug holes in next year’s budget before settling on how much to slash spending. But Nichols says rather than give agencies target figures to cut their spending plans, she wants to talk about state priorities and ways to end duplications across departments.
Jindal’s budget proposal is due to lawmakers on Feb. 27, which kicks off the start of financial negotiations with legislators who return for their regular session in April. Read the full story.
