BATON ROUGE – Gov. John Bel Edwards urged lawmakers to cast aside partisan politics in their effort to close a $304 million gap in the mid-year state budget.
Gov. Edwards made his remarks Monday night in an address to a joint session of the House and Senate on opening night of a 10-day special legislative session at the State Capitol.
“Let us be Louisianans first – not Democrats or Republicans,” he said. “Let us put Louisiana first – not rigid partisanship or political self-interest.”
Gov. Edwards asked lawmakers to consider a $119 million withdrawl from the Budgetary Stabilization Fund, also known as a “rainy day fund,” to help prevent deeper cuts to the budget.
The withdrawl from the Rainy Day Fund amounts to one-third the amount in the savings coffers.
The use of the Rainy Day Fund has drawn sharp debate among Republican lawmakers – including the delegation from Livingston Parish – who believe Gov. Edwards should pursue cuts before he dips into the reserves.
The withdrawl represents 40 percent of the budget shortfall.
“I am aware of the criticisms of using this approach, however, we should be mindful that, the Budget Stabilization Fund was created for this very purpose,” he said. “In fact, before I took office, the state tapped this fund four times during the last administration when our budget challenges were much less severe.”
The state endured an unexpected hit of $246 million from unreimbursed expenses related to the Great Flood of 2016, which also dented the coffers.
State Sen. Dale Erdey, R-Livingston, said the governor’s request came as no surprise.
“In a sense, the reference to the flood lets people know it’s raining, and that’s what the Rainy Day Fund is all about – taking care of unexpected expenses,” he said. “The only problem is that there’s this tendency to kick the can down the road rather than dealing with the cuts today.
“Rather than dealing with it now, he’ll have to deal with it later, but we have unexpected expenses from the Great Flood of 2016,” Erdey said.
The Rainy Day Fund will likely trigger the most contentious debate during the special session, he said.
Gov. Edwards cited the plummet in oil prices for much of the state’s budgetary woes. Oil dropped from $110 per barrel in August 2013 to $26 per barrel last year, and has increased to $53 on the current market.
The Edwards Administration anticipates the hike in oil prices will help the state deposit an additional $25 million into the Budget Stabilization Fund later this fiscal year. The state could also receive an additional $360 million over the next 15 years from the BP Settlement in relation to the Deepwater Horizons crisis in 2010.
“Simply put, not using the Budget Stabilization Fund, in my view, would be a mistake,” Gov. Edwards said. “Not using the Budget Stabilization Fund would inflict more pain upon Louisianans than is necessary or advisable.”
A vote against use of the Rainy Day Fund would lead to cuts to higher education, K-12 education, waivers, public safety, law enforcement, child abuse prevention, foster care and state-partner hospitals, he said.
“That’s not fear-mongering, a scare tactic, or an exaggeration. It is reality,” Gov. Edwards said.
The state budget shortfall comes off a spending plan that kicked off the current fiscal year $326 million short of the funding needed to provide the same level of service from the last fiscal year.
The 2017 budget included a $90 million cut to the TOPS program, as well as cuts to higher education, corrections and other departments and agencies – including the executive, judicial and legislative branches.
“It is an honest budget that was crafted without the use of one-time money and contains no fund sweeps,” Gov. Edwards said. “There were no contingent appropriations (because of my veto) or other gimmicks.”
Gov. Edwards told lawmakers he’s open to other ideas.
“If there is another option out there, let’s discuss it, he said. “Compromise isn’t a bad thing, but it is counterproductive to our mission to constantly criticize and oppose without offering a viable alternative.
“If collectively, you prefer more mid-year cuts than I have proposed, then propose those specific cuts and vote for them,” he said. “But, don’t resort to budget gimmicks; propose your cuts honestly and transparently. And let’s debate it. Let’s hear from our constituents and stakeholders. That’s why we are here.”
Compromise remains possible in spite of the potentially divisive nature of the session, Erdey said.
“We’ve often said in this arena that good legislation is a matter of compromise,” he said. “When you have to balance a budget with so many areas to cut, compromise will have to be the name of the game.”