Lawmakers weigh how to spend newly found money

By David Jacobs | The Center Square

Gov. John Bel Edwards’ administration has proposed paying for a looming $400 million state obligation in cash, rather than borrowing the money.

Lawmakers are able to consider the option now that they’re in the unfamiliar position of being relatively flush thanks to better-than-expected tax collections and federal aid. Raises for teachers and a spending increase for the state’s court system also are on the wish list.

“It’s always a lot easier when you have money than when you’re wrestling with cuts,” Commissioner of Administration Jay Dardenne, the governor’s top official for budget matters, told the Senate Finance Committee on Friday.

Friday’s hearing followed Tuesday’s meeting of the Revenue Estimating Conference, where the official state forecast was raised $357 million for the budget year that ends June 30 and $320 million for the next fiscal year. While the state’s economy isn’t booming, it is outperforming previous estimates that were deliberately conservative because of the COVID-19-related uncertainty, state economists said.

Louisiana owes more than $1 billion for its share of the cost of a hurricane and flood protection system in the New Orleans area. The first $400 million payment is due in September.

Administration officials previously suggested borrowing the money by selling bonds, but that would require paying interest on the debt and cut into the state’s ability to borrow for other projects. The House already has voted to put $45 million toward the $400 million payment.

“It’s certainly prudent to try and pay cash for it,” Senate President Page Cortez said, adding that bonding out part of the debt remains an option.

Other spending requests from the administration include almost $20 million to enhance raises for teachers and support staff. The House-passed budget calls for raises of $800 for teachers and $400 for other staff; the governor’s proposal would bump them up to $1,000 and $500, respectively.

The committee advanced without objection budget bills for the Louisiana Legislature and the judicial system. House Bill 695 calls for spending about $74 million in state general fund money for 2021-2022 legislative expenses, which is about the same amount as the current budget.

As amended Friday, the judiciary budget contained in House Bill 584 calls for increasing spending by about $8.2 million, representing a 6.1% increase in general fund money and a 4.4% bump counting all funding sources, Senate Finance Chair Bodi White said.

Louisiana Supreme Court Chief Justice John Weimer said the increase will help to compensate for previous cuts and support popular programs such as specialty courts focused on drug or family issues.

“The judiciary, like the Legislature, has suffered through lean times,” Weimer said.

“I hear you,” White said, noting that there are many competing requests to consider. “We’re not through yet.”