Alford: Several budget benchmarks to watch


“We’re going to hit it head-on.”

That’s what House Appropriations Chairman Zee Zeringue, R-Houma, told me last week when I asked how his committee intended to dive into budget hearings. I wanted to know what potential there was for the committee to pass either a temporary, continuation or contingency budget. 

Like most everyone else in leadership positions in the building, however, Zeringue said those intentions could change based on several circumstances. But for now, committee members are charging forward to tackle the budget warts and all, which could eventually mean devastating cuts somewhere down the line.

No one could have predicted the current fiscal environment a year ago. Unemployed residents, sinking oil prices and shuttered businesses are in, while planned investments in early education and teacher pay are out. The harsh truth, moreover, is the landscape may stay that way for a while, according to Greg Albrecht, the Legislature’s economist.

“It’s going to be a long, drawn-out recovery here with no real boom,” Albrecht told lawmakers this week, “The numbers are going to go down pretty bad for a while.”

In terms of what the budget will look like by July 1, the start of the new fiscal year, lawmakers like Zeringue are watching for a number of mile markers:

The REC: The Revenue Estimating Conference meets May 11 and will determine precisely how much the state has to spend next fiscal year. In recent years, predicting the outcome of REC meetings had become difficult, with conservatives on many occasions calling for delays in forecasts so more revenue data could be collected. But should everything go as planned, Commissioner of Administration Jay Dardenne recently told lawmakers his office will have a list of recommended cuts ready shortly after that.

The feds: Congress has already approved $1.8 billion in aid for our state and local governments, with $810 million going to the latter. The money can only be used on COVID-19 needs, but there’s a push on Capitol Hill to ease those guidelines and maybe even direct more money to states. If that happens, budget woes from Baton Rouge to Breaux Bridge to Bossier City would soften.

The gavels: In addition to watching the REC and Congress, Zeringue said, “We’ll also have to see what kind of direction the House speaker and Senate president take.” There are already expectations for at least one special session, possibly two (one in the summer and maybe another in the fall), which the Legislature or governor can call to order. Senate President Page Cortez, R-Lafayette, so far sounds hesitant on making final economic decisions any time soon. “We won’t know until really maybe the fall what the real forecast will look like,” he told senators this week, “so there may be a lot of economists guessing to some degree.”

The others: House Speaker Clay Schexnayder, R-Gonzales, and Cortez told reporters last week that only about one-third of the session’s bills will be heard between now and June 1, when the regular session adjourns. There will be an emphasis, they added, on legislation related to COVID-19, the budget and the economy. But Democratic lawmakers say they have been disappointed to see the business lobby’s top priorities: tort reform and oil and gas litigation from coastal parishes, in that mix. Supporters argue the issues speak directly to economic development, but they could also serve as a distraction.

Depending on how all of those pieces move, the chairman said, lawmakers may have good reasons to come back in a special session for follow-up budget work, or maybe they won’t— it’s just too early to tell.

Zeringue says the budget hole could be as big as $500 million, but acknowledges “that others believe it could be much worse.” For example, Senate Finance Chairman Bodi White told Advocate reporter Sam Karlin the shortfall could range from $500 million to $1 billion.

In related news, members of the budget-drafting Appropriations Committee will hear bills that could ease certain spending restrictions during times of emergency and they will have to make some tough decisions regarding pending judgments and settlement payments the next fiscal year. “We’ll be looking into and evaluating those, but it’s going to be difficult,” Zeringue says.

In time, lawmakers will likely discover there are many other difficulties surrounding the budget as well. But for now it’s one day at a time.

Jeremy Alford publishes LaPolitics Weekly, a newsletter on Louisiana politics, at LaPolitics.com. Follow him on Twitter, or on Facebook. He can be reached at JJA@LaPolitics.com.