Thursday, June 20, 2024

House agrees to raising Louisiana’s spending cap

by BIZ Magazine

By Allison Allsop, LSU Manship School News Service

BATON ROUGE—The House voted 85-19 Wednesday to raise the Legislature’s limit on spending to make use of much of the large pile of extra cash flowing into state coffers.

Senate Concurrent Resolution 3 would raise the expenditure limit for this fiscal year and next. This year, which ends June 30, would be increased by $250 million above the current limit. The 2023-2024 fiscal year’s expenditure limit would be raised by $1.4 billion.

The expenditure limit is a constitutionally imposed cap on spending. The limits are determined each year by the governor’s office of administration. Prior to the increase approved Wednesday, this year’s cap was at $15.9 billion and next year’s was $16.5 billion.

There has been debate all session between Republicans in the House and the Senate about whether to raise the spending cap.

This compromise move comes as the state is seeing an influx of cash, but this is not expected to last. Experts say the state is likely to face a shortfall in upcoming years.

The Legislature does not often vote to increase the expenditure limit, with the most recent having been when Republican Bobby Jindal was governor. Lawmakers spoke on Monday about how difficult those times were.

Rep. Larry Frieman, R-Abita Springs, spoke Wednesday against raising the limit. He recalled the last time the limit was raised. During that session, according to Frieman, there was a piece of legislation intended to pay down debt instead of raising the cap. That legislation was authored by now Senate President Page Cortez, the author of this year’s resolution to raise the cap. 

Earlier in the session, it appeared there would be much more opposition to the resolution, but Monday showed House members singing a different tune.

Cortez had joined Gov. John Bel Edwards, a Democrat, in urging lawmakers to spend up to $1.8 billion of the extra cash next year on one-time items like road and bridge construction projects, and the Senate approved that plan unanimously.

Rep. Jack McFarland, R-Jonesboro, and the leader of a conservative caucus in the House, had opposed raising the limit, suggesting instead that some of the extra money be used to pay off state debt.

But on Monday, McFarland authored an amendment during a House Appropriations Committee meeting this week agreeing to bust the cap if the extra spending next year was limited to $1.4 billion.

Deciding on whether to raise the spending cap was the House’s first step in finalizing the budget bills.

The Senate sent its budget proposal back to the House on Monday. The House had been waiting to make its determinations on those bills till after a decision was reached on the spending cap.

The Senate tied funding for many pet projects of House members and infrastructure projects to the increase in the state’s spending limit.

The House sent the budget bill for the 2023-2024 fiscal year, House Bill 1, to a conference committee through a unanimous vote on Wednesday. The committee will try to rewrite the budget so that both chambers agreement on the details before the session ends Thursday.

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