Every state is busted

Whenever we get around to reconvening the legislature, the agenda is going to look a lot different than it did when everybody showed up a few weeks ago.

Now, mainly through phone conferences, budget architects are trying to figure out what to do about the $32 billion spending plan for the next fiscal year that they are constitutionally required to balance with available revenues or state government comes to a screeching halt on July 1.

The Center of Budget and Policy Priorities, a Washington, D.C. think tank, said Thursday that Louisiana was one of the least prepared to weather the coronavirus impact because the state’s income is heavily dependent on taxes from now falling energy production and with services weakened by years of budget cuts.

With sales tax collections and oil revenues plummeting, it's tempting to go into an immediate panic. But there is some cushion. The state maintains an emergency reserve fund (known commonly as the "rainy day fund") that currently holds $409 million and the previous year's surplus is over $500 million.

But the bigger issue to keep in mind is this isn't just something that happened to Louisiana. It's happening to every state and local government in the country. There is going to have to be massive unprecedented aid to states from the federal govenrment.  We just don't know how big that will be yet.

“It’s not all doom and gloom. We’re going to get some federal dollars out of this,” said state Sen. Bodi White, the Central Republican in charge of the Finance Committee that considers the budget after it is approved by the Louisiana House. The question remains how much will the federal government send, what strings are attached and who on the state level can decide how the money is used.

White is also concerned about dollars reaching local governments, which have been paying police overtime during the crisis, among other expenses. Parish and municipal governments rely more on sales taxes than locals in other state do.

The legislature is *supposedly* going back to work on the 31st.  But whenever they do, it's important that their actions protect people from the effects of the crisis and not use it as an excuse to further gut the state's capacity to do good.  We'll learn more about the size and shape of the federal relief this week. But it's important to remember that, precisely because every state is in a similar situation now, the burden of relief will not fall solely on our state's lawmakers to solve.