Wednesday, May 22, 2024

House members advance spending bills that use federal money to avoid deep cuts

by BIZ Magazine

By David Jacobs | The Center Square

The Louisiana House of Representatives on Tuesday approved a $30-billion-plus state operating budget that uses federal pandemic relief funds to make up for most of a projected billion-dollar revenue shortfall.

Most of the spending bills were sent to the Senate with no objections from House members. The House has not yet taken up the state construction budget, which is likely to be more controversial.

According to the state constitution, spending bills are supposed to be approved before the next fiscal year begins July 1. The current session must end June 1, though a special session has been called and will begin as soon as the pandemic-shortened regular session is over.

Gov. John Bel Edwards proposed $82 million in cuts across state government. Legislators added a $12 million cut to the Louisiana Department of Health to free up spending for other areas. Pre-pandemic plans to increase spending for education at every level have been scrapped.

Lawmakers agreed to use $90 million of an available $135 million from the state’s “rainy day” fund next fiscal year, leaving an additional $40 million if the Revenue Estimating Conference predicts a midyear shortfall. The fund contains $405 million now, but only a third can be spent in a given year.

One spending measure that attracted opposition would increase spending for nursing homes by about $100 million, about a third of which would come out of state funds, including $8.7 million from the state general fund and $24 million from the state’s Deepwater Horizon disaster settlement. “Re-basing” nursing home rates is required by law at least every other year.

Lawmakers last year voted to make the Deepwater Horizon money available to fund $700 million in state infrastructure projects. That means the entire impact of the nursing home rate increase would be borne by the general fund, legislators said Tuesday. The increase passed by a 60-37 vote.

On Tuesday, legislators attached an amendment by Rep. Lance Harris, an Alexandria Republican, urging the Edwards administration to formulate a “deficit avoidance plan” to reduce spending by an additional $100 million and report the details to the legislature’s joint budget committee. Harris said cuts might be necessary if the economy doesn’t fully recover from the COVID-19, so the report would allow legislators to be in the loop about what the administration is planning.

As amended, the state budget bans spending on a mandatory contact tracing program. “Contact tracing” is a process used in public health emergencies to determine who might be carrying an infectious disease and asking them to take steps to mitigate the spread.

State health officials reiterated Tuesday that the program would be voluntary. Rep. Blake Miguez, R-Erath, said legislators want to know more about how the program would work and how the two contractors who are helping to implement the program were chosen.

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