It’s one problem after another

Here we go again! No sooner did the state get out of one fiscal jam than another reared its ugly head. The budget Gov. John Bel Edwards proposed for the new fiscal year starting July 1 is $440.5 million short of meeting the state’s basic needs.

The governor is proposing a $29.7 billion budget, which is $1.4 billion higher than the current year’s budget of $28. 3 billion. The increase is because of a $1.7 billion boost in federal money for the expanded Medicaid program for poor and low-income citizens.

State revenues for the new fiscal year are projected to be $9.5 billion, but the general fund needs $9.9 billion to perform basic state services. That’s why there is a $440.5 million shortfall.

OK, so where is most of the money going? Health programs are projected to cost $14.2 billion, 48 percent of the budget. Most of that is federal money. Education costs another 26 percent. That leaves only 26 percent for everything else.

A favorite budget target of House Republicans is the state Department of Health. Unfortunately, Louisiana has the third highest poverty rate in the country. And the fact that over 400,000 citizens were added to the Medicaid rolls when Edwards expanded the program demonstrates the high cost of medical care for the less fortunate in Louisiana.

The Census Bureau estimates 19.6 percent, nearly 890,000 of the state’s 4.7 million residents in 2015, lived below the federal poverty line of about $24,000 for a family of four. The poverty rate was only higher in Mississippi (22 percent) and in New Mexico (20.4 percent). New Hampshire had the lowest poverty rate at 8.2 percent.

Where do we go from here?

Edwards said, “This is not the budget proposal I want to present and should serve as a starting point for the Legislature. For the second year in a row, my budget plan contains no one-time money to pay for recurring expenses and no fund sweeps.

“The budget I am submitting only spends money the state is projected to have for the next fiscal year, meaning that many state services that I, and the people of Louisiana, consider to be important are not yet funded.”

The TOPS scholarship program is at the top of the governor’s funding priorities. The budget contains only enough money to pay 70 percent of its costs. Students and their parents would have to pick up $81.8 million for the second year in a row.

The Department of Transportation and Development is short $43.2 million that could attract another $172.8 million in federal dollars for a total of $216 million. Edwards said that could fund 546 miles of highway overlay and replacement of 360 120-foot bridges and 107 300-foot bridges.

The private-public partnerships that replaced the state’s charity hospital system would be cut 6.2 percent, about $30.5 million.

Nothing in the budget deals with $1.7 billion in deferred maintenance at colleges and universities. McNeese State University has $26.7 million in maintenance that hasn’t been performed. The LSU System deferred maintenance totals over $1 billion.

Residents who have had to delay improvements and maintenance at their homes and businesses know what happens after years of neglect.

A task force has offered recommendations for reforming the budget and tax systems at the regular session beginning April 10. Income tax changes are on the list, along with a harder look at tax credits and deductions.

Rep. John Schroder, R-Covington, said Edwards needs to give lawmakers a plan.

Edwards accepted the challenge. He said he would submit a plan to lawmakers for funding priorities.

“My goal is to fully fund critical priorities of our state, most notably the TOPS program and transportation, but we cannot do that without making reforms and without additional revenue,” the governor said.

Some have already questioned Edwards’ plan to fund pay raises for state employees at a cost of $23.8 million. These workers have gone without merit pay increases for a number of years, and that has taken its toll. The turnover has been high at the state level and at colleges, universities and agencies around the state.

The $440.5 million needed to fund these priorities is insignificant when compared to the revenue problems the state is going to face on July 1, 2018, when temporary taxes and tax break suspensions go off the books.

An additional 1 percent state sales tax approved at last year’s first special session, making it the highest state sales tax in the country, is bringing in an estimated $880.6 million a year. How do you replace those kinds of revenues? You start raising some money this year.

The Council for a Better Louisiana in its wrap-up of the just-ended special session makes some excellent points about successful negotiations over the state budget.

“What that tells you is that the state’s budget, by any measure, is pretty darn tight and even fiscally conservative budget cutters haven’t had much luck in finding cuts of any significance that a majority of their colleagues could view as palatable,” the non-partisan agency said.

“We saw compromise that rose all the way to getting a two-thirds vote on something (use of the rainy day fund) a lot of legislators were totally opposed to when the session began.

“Maybe that’s a reason for just a small degree of hope.”

Time will tell if that is simply wishful thinking on CABL’s part. For the sake of the state’s future, let’s hope not.

l

JIM BEAM, the retired editor of the American Press, has covered people and politics for more than five decades. Contact him at 337-515-8871 or jbeam@americanpress.com.