The final days of the state appropriations process can sometimes be filled with suspense when there are deep cuts to be made, or lots of excess dollars to divvy up. Other times, it’s so quiet that lawmakers decide to sine die early, which may be the case this week.
There’s still some intrigue around this year’s spending plans, though, especially when it comes to diverting a $700 million pot of money, which lawmakers may do in the coming days. (More on that below.)
The real drama is set for next year, as Louisiana’s political world approaches its self-induced fiscal cliff of about $460 million prompted by the expiration of a temporary state sales tax.
“This is the easiest budget cycle Jeff Landry will ever have,” says Jan Moller with Invest in Louisiana, formerly known as the Louisiana Budget Project.
Legislators generally have fulfilled the new governor’s spending requests, more or less. In doing so, they say they have remained cognizant about next year’s potential shortfall. “That was our mission from the time the session started,” Senate Finance Chair Glen Womack says.
Womack’s committee advanced most of the major spending bills last week with very little discussion. House Bill 2, the comprehensive construction budget, and the judicial budget was heard.
Thanks to some additional revenue in the most recent state projection, the Senate Finance Committee restored the full $198 million Landry’s administration had requested for a K-12 employee pay bump, along with $24 million the House had cut from early childhood education.
Though no one is happy that teachers appear to be getting another one-time stipend rather than an actual raise, the move reflects a hesitation to create new recurring expenses.
“We’ve been pleased overall,” says Erin Bendily with the Pelican Institute for Public Policy, which generally advocates for spending restraint.
She notes recent conversations between the administration and legislative leadership about possibly diverting some $700 million in business tax collections from the Revenue Stabilization Fund for new brick-and-mortar projects. Still, others hope the money will be directed to other needs as well.
“Should we consider paying down debt?” Bendily says.
Some budget watchers quibble with the idea that state government is truly tightening its fiscal belt. Landry is requesting, and so far getting, raises for some positions (including Cabinet secretaries) along with a number of additional positions, such as new jobs in the Attorney General’s Office and the Office of Juvenile Justice.
While the increases in HB1 may not add up to a huge number in the context of $48 billion in overall spending, they still represent recurring costs that could make avoiding the cliff that much more difficult—not to mention some 70 pages of local projects that the Finance Committee tacked on to the supplemental appropriations bill for this fiscal year.
As it stands now, lawmakers won’t have any issues with bumping up against the state spending limit. Noticeably lacking so far is project funding for the Coastal Protection and Restoration Authority, though that may change when the Finance Committee takes up HB2.
“We have significant [coastal] projects that could be impacted if funding isn’t provided,” says Rep. Jerome Zeringue, the former Appropriations chair who leads the House Select Committee on Disaster Recovery.
Another factor to watch: Legislators’ local priorities, sometimes referred to as “pet projects,” are subject to line-item veto by the governor, which gives the chief executive the means to reward friends and punish enemies.
Jeremy Alford publishes LaPolitics Weekly, a newsletter on Louisiana politics, at LaPolitics.com. Follow him on Twitter, or Facebook. He can be reached at JJA@LaPolitics.com.
