Friday, May 17, 2024

Louisiana Senate to take next look at proposed budget

by BIZ Magazine

By Victor Skinner | The Center Square contributor

The Louisiana Senate is next to weigh in on the operating budget after lawmakers in the House approved a proposal last week that stays under the state’s spending cap.

House Republicans approved House Bill 1 on Thursday that prioritizes pension debt payments they argued would create hundreds of millions in interest savings for state agencies, colleges, and local school systems. Nearly all Democrats voted against the measure.

HB 1 would pay down about $950 million in pension debt, using money Gov. John Bel Edwards’ proposed in part to go toward $2,000 per year raises for teachers. The House budget would also eliminate $57 million of $114 million in spending increases Edwards proposed for higher education, as well as $52 million in new spending the governor suggested for early learning programs.

The House spending plan is aimed at reducing the impact of a temporary 0.45% state sales tax that’s set to expire in 2025, while avoiding the two-thirds vote in both chambers necessary to override a spending cap enshrined in the state constitution. Debt payments are not subject to the spending cap.

Overall, the state operating budget in HB1 would decrease by 2% for the next fiscal year, from $43.5 billion to $42.6 billion, or about $220 million less than Edwards’ spending proposal. The bill would direct nearly $1.9 billion in surplus tax collections and savings to debt payments, one-time projects and state savings accounts, according to analysis from PAR Louisiana.

The House budget maintains the governor’s plan to spend $340 million on road and bridge work to cover increasing construction costs and matching dollars for federal funding.

PAR takes issue with Republicans’ “problematic” cut to early learning programs. Those programs used $192 million in federal pandemic aid to serve more than 16,000 children, and officials contend the cut will leave 4,000 out of the program next year.

“While scrapping those education dollars, lawmakers poured about $44 million into pork barrel spending on favored projects back home that received no public vetting or explanation,” according to PAR. “The earmarks may bolster political talking points in an election, but they undermine state priorities.”

The Louisiana Federation of Teachers and other education advocates are also lashing out at the decision to cut teacher raises, despite the savings from pension payments lawmakers argued could offset the impact.

“The reality is that local school districts are under no obligation to give teachers and school employees a raise. Moreover, the funding is inadequate,” Louisiana Federation of Teachers posted to Facebook. “In FY 2024, $153 million would be divided up between 64 parishes and even more school districts. That is not enough to give teachers and support staff a significant pay raise they deserve.

“To put it into perspective, the $2,000 and $1,000 raises cut from the budget would have cost $196 million. According to testimony, charter schools that do not participate in TRSL would receive zero funds from this bait-and-switch scheme.”

House Democrats also cited teacher raises, and cuts to early and higher education for opposing HB1.

The budget debate moves to the Senate, where Senate President Page Cortez, R-Lafayette, has signaled support to increase the expenditure limit for one-time expenses.

“As the Senate begins its work on the budget, the House’s emphasis on reducing Louisiana’s long-term debt will clash with the Senate’s goal of spending temporary money on one-time projects,” according to PAR. “Both approaches thankfully move the state away from financial gimmicks and toward a more sustainable budget.”

Lawmakers have until June 8 to finalize a budget.

You may also like

Update Required Flash plugin