Louisiana officials are bracing for an expected additional shortfall in last year’s budget that likely will be rolled into the budget for the fiscal year that began July 1, the governor’s key budget adviser told the Baton Rouge Press Club today.
Agencies have already been asked to prepare for midyear cuts if revenue falls short, said Commissioner of Administration Jay Dardenne, who also outlined the state’s efforts to “right-size” government and detailed Louisiana’s ongoing fiscal problems. He also said Louisiana’s budget could be impacted by the upcoming fall elections.
State officials are working to eliminate wasteful spending through state contracts, Dardenne said, adding that he hopes to consolidate two “high-dollar” state contracts for call centers—one with the Department of Health and one with the Department of Children and Family Services. Instead, one call center would handle inquiries to both agencies.
Information technology is another area the administration plans to streamline and consolidate among different agencies, Dardenne said. The streamlining efforts can save “significant” dollars, said Dardenne, who declined to give an estimate.
Dardenne said the upcoming fall elections are a “big uncertainty” for the state, which just expanded Medicaid to cover hundreds of thousands of low-income patients. The Edwards administration has touted the move as a money-saver.
If Republican presidential nominee Donald Trump wins, and Republicans maintain majorities in both houses of Congress, there would likely be an attempt to repeal the Affordable Care Act, also known as “Obamacare,” he said. Repealing the federal health care law would impact federal dollars flowing to Louisiana through Medicaid.
And although the Louisiana Legislature balanced the state budget, as it’s required to do, through cuts and tax increases, the state is facing “serious” cash-flow issues, said Dardenne, who laid the blame squarely on the shoulders of former Gov. Bobby Jindal’s spending practices. In sweeping funds saved by various agencies and spending “one-time money,” Jindal’s administration depleted state coffers, Dardenne said. The state is now looking to take out a short-term loan to cover expenses this fiscal year.
Louisiana is approaching a fiscal cliff in 2018 when many of the tax increases passed in recent legislative sessions are set to expire. To forge a sustainable budget, Dardenne is hoping the Legislature will agree on long-term, sweeping tax changes laid out by the budget task force on which he sits.
“We can’t just lurch from crisis to crisis in Louisiana,” he said. “We need to make some fundamental changes.”
—Sam Karlin
