Louisiana lawmakers today took the first step in crafting the state’s spending plan for the upcoming year, cutting more than $236 million from health care spending in Gov. John Bel Edwards’ budget proposal and fully funding TOPS.
The Republican-heavy House Appropriations Committee passed House Bill 1 on a 17-5 party-line vote after passing a host of changes that amount to spending roughly 97.5% of the money the state expects to have for the upcoming budget cycle. The move avoids a $440 million budget shortfall by essentially cutting agencies preemptively. State budget officials also said it would mitigate the amount of the looming “fiscal cliff,” which is a projected budget gap of more than $1.3 billion in 2018.
“We’re trying to get away from having consistent midyear cuts,” said Committee Chairman Rep. Cameron Henry, R-Metairie. “Right now the only way I can think of to do that is to not appropriate all the money.”
Edwards has endorsed the concept of spending less than the amount of money the state expects to collect from taxes and fees. But Commissioner of Administration Jay Dardenne said the governor wants to stabilize the budget first, and objected to the changes. Several other Democrats on the committee also opposed the move.
Aside from spending $235 million less on the Louisiana Department of Health than Edwards’ proposed budget, the plan also cuts corrections, public safety and social services, along with a host of other services.
Baton Rouge Rep. Franklin Foil successfully took $82 million from LDH to fully fund TOPS, which lawmakers cut for the first time last year. Students had to pay the bulk of their tuition bills this spring.
The plan also carves out a $500,000 spending increase on the Louisiana Workforce Commission, one of the few agencies to avoid cuts.
But the proposal is still in the early stages of the process. The same committee fully funded TOPS last year before the full House decided to fund hospitals instead, leaving TOPS short. The budget will go through the same process in the Senate, which is more sympathetic to the governor’s priorities, and money from any tax increases that pass will be put back into the budget.
Several Democrats on the committee pushed back against the changes, arguing the bill does not take into account mandated cost increases from the federal government and state retirements systems, among other things.
Rep. Valarie Hodges, R-Denham Springs, passed an amendment that requires the state to take $190 million from the $1.6 billion in federal flood recovery funds and spend it on the Comite River Diversion Canal project. That project has been in the works for nearly 20 years, and Hodges said the move would fully fund it and help prevent flooding in parts of the Capital Region.
“We’ve been working on this project for 17 years, and I think this is the best opportunity we have to get it done,” she said.
If the amendment passes, the state Office of Community Development would have to develop a “substantial amendment” and get it approved by the federal Department of Housing and Urban Development, says OCD Executive Director Pat Forbes, who has overseen the flood recovery process for the state.
“There is some risk they would not approve it,” Forbes said, noting that the state has so many unmet housing needs. HUD also prohibits spending more than $250,000 on Army Corps of Engineers-authorized projects, which would include the Comite diversion project.
And if HUD did approve it, the project would mean around 4,000 homeowners who are currently set to get flood relief would no longer receive aid, Forbes says.
The state developed a spending plan for the $1.6 billion through an exhaustive public process last fall, ultimately getting it approved by HUD before the money was handed to the state.
The budget goes next to the full House for consideration.
—Sam Karlin
