Tuesday, April 12, 2016

Budget Day (again)

It's the year of the Long Parliament in Baton Rouge as the governor is expected to call a second special session to immediately follow the current regular session in order that legislators can attempt to fix the remaining FY 2016-17 shortfall.

Today the Governor outlined his budget proposal. It's not pretty.
Every state agency and department is expected to take cuts. Most will see a reduction of between 10 percent and 30 percent in state funding, according to the governor's staff.

Higher education leaders said last week that the state's public universities and college were bracing for reductions of 10 to 12 percent, which they said could send some into financial exigency, the academic version of bankruptcy. There also were concerns that some of the hospitals specifically set up to serve the poor and uninsured may have to close because of lack of funding.

This is the eighth year in a row of state budget cuts following a drop off in post-Katrina tax revenue and a generous state income tax cut. In spite of several rounds of spending reductions during Gov. Bobby Jindal's tenure, the state's budgetary problems have only deepened.
The Advocate posted a powerpoint of the Governor's proposal here.  Once again, the state is facing crippling cuts to health care services and higher education, including as much as a 66 percent cut to the TOPS program, unless... you guessed it.. new revenue can be found.

But unlike the more desperate dash to ram through a series of unpleasant sales and sin taxes we saw in last special session, there's an opportunity now to put together a more thoughtful and equitable tax reform package. This might involve altering or eliminating the federal income tax deduction on state income taxes, a more comprehensive reform of state tax "incentive" giveaways to special interests, as well as several other things the Task Force on Structural Changes in Budget and Tax Policy is looking at.

In theory, there's time to do these things. That is, if the House Republicans feel like coming back to work before September there might be. But.. well.. 
But House Republicans say Edwards and the Legislature should wait until October or November before having another special session because it will give everyone a better idea of whether additional taxes need to be passed.

"I don't see any appetite for a special session [to raise taxes] in June," Rep. Cameron Henry, R-Metairie, said.

The Louisiana House GOP refused to raise taxes as much as Edwards or the Senate leadership wanted during a special session held last month.

But conservative House Republicans who are resisting raising taxes again also haven't put forward any plan for budget cuts yet. Most say they don't want to cut TOPS or health care services but haven't released any alternative for coping with the budget shortfall.
In other words, the GOP "alternative for coping with the shortfall" is every bit as solid as Billy Nungesser's plan right now.  Should be a fun summer.

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