“It’s almost all minus signs”

The new members of the Senate Finance Committee got a bleak update on the state’s deteriorating financial situation Thursday, which stems from a mix of falling oil prices, declining corporate tax revenue and the overuse of  piecemeal and one-time solutions by the previous regime. As of Monday, the Legislature has exactly five months in this fiscal year to come up with $750 million needed for the current year and fill a $1.9 billion gap in next year’s budget. The AP’s Melinda Deslatte has the details:

Legislative economist Greg Albrecht told the Senate Finance Committee the state economy has continued to weaken, employment rates are down, oil prices have dropped and the state is paying out more in tax refunds to businesses than it is receiving in corporate taxes. “The economy’s been weakening for a year, and oil’s done us in,” Albrecht told the Finance Committee, newly configured with the start of the latest four-year terms of office. Albrecht’s summary: “It’s almost all minus signs.” […] The state budget gap is estimated to have reached $700 million, possibly more, with only five months remaining in the fiscal year to rebalance the spending plans.

Some senators complained that outgoing Gov. Bobby Jindal kept them in the dark about the mid-year deficits, particularly in Medicaid. Commissioner of Administration Jay Dardenne said the new administration plans to be more transparent . Nola.com/The Times Picayune’s Julia O’Donoghue explains:

Longtime legislators are vocal about the fact that the Jindal administration wasn’t forthcoming, in their opinion, about how bad the state finances were. At the Senate Finance meeting, Sen. Jim Fannin, R-Jonesboro, pointedly reminded legislative budget staff that the state’s $500 million-plus shortfall in its Medicaid budget wasn’t brought to lawmakers attention until three months ago. […] But at the Senate Finance meeting, the Edwards administration implied the problem with getting accurate information had more to do with Jindal than longtime staff at agencies like the Department of Health and Hospitals. They vowed to be more transparent and honest with legislators.

House committees unveiled

Speaker of the House Taylor Barras of New Iberia unveiled his committee assignments late Thursday ahead of this morning’s meeting of the Joint Legislative Committee on the Budget. Nola.com/The Times-Picayune’s Julia O’Donoghue explains how this year’s House continues to buck Louisiana tradition:

The Legislature usually gives the governor a heavy hand in picking its leadership. Traditionally, the House speaker would have tried to put people in place that have a good relationship with Edwards. But the two most powerful committees — House Appropriations and Ways and Means — will be chaired by legislators who have been at odds with Edwards recently. There are also far fewer Democrats on both of those so-called “money” committees than expected, which will make Edwards proposed tax increases and other budget changes harder to pass. “The money committees are well out of balance. Whatever comes out in terms of tax proposals and tax cuts is firmly and squarely on the shoulders of the Republicans,” said Minden Rep. Gene Reynolds, head of the Democratic caucus.

Community colleges doing more with less

The growth of Louisiana’s community colleges and two-year schools is the subject of the latest edition of The Advocate’s special eight-part series on higher education. While the Jindal administration pushed for more participation in two-year colleges, budget cuts forced the schools to educate more students with fewer resources. The Advocate’s Rebekah Allen has more about what those cuts – and growing enrollment – mean for the schools and the state:

During the Jindal years, the number of students enrolled at four-year schools fell slightly, while the number attending two-year schools grew by nearly 20 percent. […] But for all the Jindal administration’s belief in two-year schools as an economic-development strategy, the state hasn’t exactly put its money where its mouth is. Quite the opposite. Louisiana has cut its investment in two-year institutions by more than a third during the Jindal years — even as Louisiana’s community college system has become one of the nation’s fastest-growing. The result is that state taxpayers now contribute about $1,650 per community college student annually; when Jindal took office, the figure was $3,508. That’s a drop of more than half. […] And it’s not as though the state was spending handsomely on two-year schools in 2008. The cost to the state that year, $227 million, was less than Louisiana has spent in most recent years on tax breaks for various and sundry industries that have come under question, including those for fracking wells and film production.

The problem with TOPS

As one of the most popular programs in the state, TOPS has also become one of the Louisiana’s biggest and unchecked expenditures. The Advocate’s Stephanie Grace explains the reasons for that unchecked growth and the need for more oversight for the scholarship program:

What started off as an effort to level the playing field for students who wouldn’t otherwise be able to afford college has morphed into a merit-based entitlement used more widely by the middle class. Income restrictions went by the wayside in 1998, and rising tuition has made the scholarships even more attractive to families of means than before. […]A broader byproduct is a disparity in how the program affects the state’s schools. LSU has seen its ambitious Flagship Agenda fall by the wayside, but because so many of its students qualify for TOPS, it’s been shielded from the worst of the budget cuts. The state’s historically black colleges, which tend to serve the same underprivileged population Taylor first targeted for aid, are struggling mightily, as are many of the students who are trying to meet higher tuition payments without the aid of TOPS.

Number of the Day:

$1,650 – Per-student state aid to two-year colleges in Louisiana in 2014.

       (Source: The Advocate)