BATON ROUGE – Gov. John Bel Edwards will seek legislative approval to pull from the Rainy Day Fund and reduce spending for state agencies in a plan to erase a $304 million mid-year deficit.
State legislators will address the fiscal shortfall when they gather for a special session Feb. 13 at the State Capitol.
The budget does not include additional taxes or an increase in fees.
“As we drafted this plan, my administration sat down with every agency to identify where budget adjustments could be made to ensure that the priorities identified by the legislature in this year’s budget were funded,” Gov. Edwards said. “With only four months left in this fiscal year, adjustments of this magnitude are difficult.
“We have gone line-by-line in the state budget to identify cuts and other state general fund reductions, including identifying funds that could be moved to other areas of the budget,” he said. “In our view, this is the most responsible approach to solve this shortfall until we can make structural budget changes in the regular session.”
A refusal by lawmakers to use the Rainy Day fund would likely lead to cuts in areas currently protected from reductions, Gov. Edwards said.
Without a special session, the state constitution would mandate cuts to the Louisiana Department of Health, higher education, K-12 education and the Department of Corrections.
The plan Gov. Edwards will bring before legislators does not include cuts to K-12 (the per pupil allocation of the Minimum Foundation Program), higher education, TOPS, waiver programs, the Department of Corrections or the Department of Children and Family Services.
The governor’s budget proposals include:
- · Use of the Rainy Day Fund - $119.6 million
- · 2.5 percent reduction of state general fund to the judiciary - $3.79 million
- · 2.5 percent reduction of state general fund to the legislature - $1.65 million
- · Excess funds from the Louisiana Legislative Auditor to construct a new office building - $8 million (This reduction does not impact the operations of the agency)
- · Attorney General’s escrow account balance - $3.98 million
- · 5 percent reduction in statutory dedications from the Attorney General - $1.9 million
- · Reduction in statutory dedications from the Department of Transportation and Development - $1.46 million
- · The Louisiana Department of Health - $127.8 million in reductions and adjustments
- Reduction in statutory dedications from the Department of Transportation and Development - $1.46 million
- The Louisiana Department of Health - $127.8 million in reductions and adjustments.
Lawmakers can only use the special session to consider use to the Rainy Day fund, cuts of the general fund for the judiciary and legislature, along with the reduction of excess funds to the legislative auditor.
Prior to Gov. Edwards taking office, the state’s Rainy Day Fund has been used to stabilize the budget four times over the past eight years for a total of $517.4 million. Those funds were used to eliminate budget shortfalls and were combined with various one-time funds to pay for recurring expenses.
The 2017 fiscal year budget does not include funds for flood-related expenses. Department agencies have advanced $246 million in unbudgeted dollars for flood response. The federal government will reimburse the state 90 percent of the flood-related expenses, but not during the current fiscal year.