The Republican leadership of the Louisiana Legislature on Monday unveiled its $44 billion draft budget plan outlining how it intends to spend the unprecedented amount of money available to the statealthough a highly publicized section of the proposal remained unfinished.
The House Appropriations Committee unanimously presented an annual budget proposal to the entire House that leaves $400 million of available funding unspent, an unusual move that indicates a lack of consensus among lawmakers on the how to use all the money they have.
Governor John Bel Edwards has recommended spending $500 million on a new bridge in Baton Rouge over the Mississippi River, a proposal that legislative leaders have repeatedly criticized. The House Appropriations Committee was expected to present an alternative plan for the money this week, but it has yet to materialize.
The appropriations committee has agreed to siphon off $100 million of the $500 million Edwards wants for the bridge project to maintain existing roads. He placed the remaining $400 million in a state fund to be used for undesignated purposes. House leaders said they are still negotiating with the Senate over what to do with the money, some of which could still be earmarked for the new bridge.
Those who had also hoped that Louisiana’s financial windfall would translate into tax cuts or even a one-time refund for Louisiana residents will likely be disappointed. A House committee scuttled several tax relief proposals on Monday, making it less likely that a major tax cut will pass this session.
Legislative leaders focused on trying to keep the state budget plan going below Louisiana’s spending limit. The state constitution limits the growth of government by limiting state spending in a budget cycle unless there is a two-thirds vote of both houses.
Given the amount of money on the table, lawmakers risk — for the first time since the spending cycles immediately after Hurricanes Katrina and Rita — hitting the cap and needing that extra vote to break it. . It may not be possible to garner enough support to raise the spending cap in the Conservative House, so legislative leaders are trying to avoid the vote by taking creative approaches to budget construction.
To avoid the cap, Republican leaders have tried to spread state spending over multiple budget years and multiple state funds, arguing that not all the money comes out in one budget cycle and that the cap shouldn’t s ‘to apply. There appears to be some consensus around the strategy, with even Conservative House caucus leader Rep. Jack McFarland R-Jonesboro saying he is supportive.
The Legislature could still run into problems with the spending cap if a state panel raises state revenue estimates next month as planned. If lawmakers attempt to spend the extra money available to them at that time, they may have to resort to even more maneuvering to avoid the spending cap vote again.
Lawmakers also said they were mindful of limiting spending, regardless of the cap issue. The state may be strapped for cash now, but it anticipates a major shortfall in just over two years.
In 2025, Louisiana’s sales tax rate is expected to drop by 0.45%, which will reduce state funding for K-12 schools, higher education, health care and education more than hundreds of millions of dollars per year.
Last year, lawmakers also voted to divert $150 million in the next budget cycle from health care and higher education to transportation projects and about $300 million a year in future years in the same goal.
With that in mind, Republican leaders said they cut $25.7 million in additional pay increases for local law enforcement and first responders that Edwards included in his budget proposal. That would have been $100 more per month for workers than those who qualified.
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“We must be aware of the shortfall that we will have to fill,” said the chairman of the House Appropriations Committee, Jérôme Zeringue, R-Houma.
The proposal may also be targeted for political reasons. Groups pushing for higher wages, primarily local sheriffs and municipalities, are currently at odds with House Speaker Clay Schexnayder, R-Gonzales. They oppose his plan to try to centralize sales tax collections.
Law enforcement will likely see its funding funneled back into the budget on the Senate side. Senate Finance Chairman Bodi White, who controls the budget process in the Senate, is move an invoice to add the additional $100 payment that the Senate unanimously approved earlier this month.
Here are other items included in the spending plan approved by the House Appropriations Committee:
State unemployment trust fund replenishment: $500 million
State unemployment fund was sold out at the start of the COVID-19 pandemic while an unprecedented number of people were out of work. Louisiana is still looking to bring the trust fund back to pre-pandemic levels.
This is slightly less than the Governor’s proposed allocation of $550 million. Edwards had said $550 million would be needed to avoid a trigger that would force the state to tax companies at a higher rate if the trust fund fell below $750 million. The legislator hopes to avoid this higher tax rate by extending a temporary suspension of the law it would require.
The House unanimously approved a resolution on Tuesday with this extension. He heads next to the Senate.
Improvements to the water and sewage system: $450 million
The state has between 1,600 and 1,700 boil water advisories across the state each year. While $450 million may seem like a lot of money, it’s not enough to meet the state’s challenges in providing clean water. The backlog of maintenance needs for Louisiana’s water and sewer systems is estimated at $7 billion. Edwards had offered to devote more money, $500 million, to this cause.
Salary increases for teachers and school support staff: $148 million
The House Appropriations Committee and Edwards agreed that educators should see another pay rise this year. The funding would provide an annual increase of $1,500 for teachers and $750 for school support staff. Teachers have received $3,300 in pay raises over the past four years, Zeringue said.
Lake Charles Interstate 10 Bridge: $100 million
Doubled by truckers one of the “scariest” bridges in the country, the Interstate 10 bridge over the Calcasieu River in Lake Charles has no shoulder and is incredibly steep. It is also very old. Transport Secretary Shawn Wilson said it was built before the interstate system even existed.
This money would be combined with federal funding to upgrade the bridge. The total project is expected to cost over $800 million.
Aid for flood victims in the parish of Tangipahoa in the 1980s: $75 million
The House Appropriations Committee has offered to make two lump sum payments to more than 100 residents and business owners in Tangipahoa Parish whose properties were destroyed in a 1983 flood. Damages total $300 million, though plaintiffs were willing to pay with the State less than half of this amount.
A first payment of $45 million would be made this year, followed by another payment of $30 million next year. A few million dollars that had also been set aside for this settlement several years ago will be distributed.
Last year, Edwards and Louisiana House agreed to start paying residents, business owners and their survivors some of the money owed, but the Senate balked. At the time, Cortez said the Legislature should not set a precedent by paying major judgments against the state.
Recovery from Hurricane Ida: $30 million
The House Appropriations Committee added $30 million in Hurricane Ida relief to the governor’s original budget proposal.
Workers serving persons with disabilities: $34 million
Edwards had invested an additional $31 million in raising fees for organizations that provide services to people with disabilities. The extra money will increase the pay by about $13 per hour to $18.50 per hour. The House Appropriations Committee has expanded this proposal to increase a wider range of programs, such as those that work with people with autism.
The Appropriations Committee also added 250 additional slots for people with disabilities to receive government-funded services.
Salary increases for higher education professors: $31.7 million
The House Appropriations Committee and Edwards agreed to give higher education faculty another pay raise. They received a salary increase of 2% to 3% Last year. Prior to 2021, Louisiana faculty had not received a raise in 13 years.