Monday, February 15, 2016

Monday, February 15, 2016

Executive budget: “This is now the wake-up call”; Resistant to revenues; Trouble for TOPS; and Jim Beam: Budget crisis is real

Executive budget: “This is now the wake-up call”

Gov. John Bel Edwards’ first executive budget was released Saturday to a packed legislative budget committee – and the news was exceedingly grim. With no guarantees that the Legislature will go along with the governor’s plans for new revenues, the budget is a doomsday document that lays out deep, across-the-board cuts to state agencies and programs. In a letter to legislators, Edwards made it clear it’s not the budget he wants them to pass, but the budget he’s required to submit under the state constitution. The AP’s Melinda Deslatte has more:

 

Public colleges would lose $180 million in state financing, about 24 percent of the money they receive from the state. In addition, the TOPS free college tuition program would get $233 million less, leaving it with only about one-fifth the money needed to cover all students expected to be eligible to receive the aid. Health care would take deep hits, losing nearly $800 million in state financing, a cut that would grow to $1.9 billion with the loss of federal matching dollars, according to the Edwards administration. That type of reduction would force closures of health services and programs on which the poor, elderly and disabled rely. Sen. Regina Barrow, D-Baton Rouge, described the cuts as unrealistic, saying many state agencies have been forced repeatedly to shrink spending over the last eight years of budget gaps.

 

With the special session starting its first full day, hearings are underway in the House budget and tax committees on the governor’s budget and the various revenue proposals that have been floated. For a link to Commissioner of Administration Jay Dardenne’s presentation click here. The Advocate’s story from the special session’s opening day is here.  

 

Resistant to revenues

Despite the deep cuts that would come without new revenues, Republicans in the House are resisting the governor’s call for taxes and wants the focus to be on cuts to critical services. As The Advocate’s Tyler Bridges reports in a lengthy overview story, they have been woefully short on details.

 

Many Capitol insiders believe that Henry, who is close to senior Republicans in Washington, including his former boss, U.S. Rep. Steve Scalise, has been playing a key behind-the-scenes role in organizing the House to oppose Edwards’ tax measures. “The biggest concern is that his focus seems to be on raising taxes and not really looking at long-term structural changes for state government,” Henry said. Barras said House members are open to higher taxes but only after being sure that the governor has exhausted all possible ways to cut spending. Neither Henry, nor Kennedy nor any other Republican has offered more than a handful of specific spending cuts as an alternative to tax increases to help solve the immediate budget crisis. “If they are going to offer an $800 million plan of cuts, let’s see it,” said Alario, who added that he hopes that House Republicans get educated quickly on the available solutions. “This is a monumental problem.”

 

Trouble for TOPS
If anyone thought the current budget crisis doesn’t have real-world consequences, last week’s news about the TOPS program should have put that to rest. The popular college scholarship program would be cut by roughly 80 percent next year without new revenues, and colleges are already being asked to absorb more than $28 million in expenses for the current fiscal year. The Shreveport Times looks at the program through the eyes of two students and examines some of the ways it could be sustained for future generations of students.  

 

The day of reckoning has been long in coming — and not unexpected. Previous attempts to reign in the program have been stymied by lawmakers, the public and former Gov. Bobby Jindal. Proposals have included reintroducing the program’s original income cap and raising academic standards. Most agree the program needs to be reevaluated, but a consensus has yet to be reached. … TOPS recipients are increasingly coming from middle and upper income families, according to a required annual report published in December by the Louisiana Board of Regents. Since 2005, the number of TOPS recipients that came from households with incomes of $150,000 or more has more than doubled. Seventy-five percent of students who received the awards in 2014 were white, with a majority coming from families who make at least $70,000 in annual income. “It has become a very popular middle class entitlement in Louisiana,” said Jan Moller, director of the Louisiana Budget Project — a nonprofit that researches state policies and their impact on low and moderate income families.

 

Jim Beam: Budget crisis is real

The semi-retired former executive editor of the Lake Charles American Press has seen more budget crises in Louisiana than just about anyone except John Alario. And Jim Beam writes in his Sunday column that the current imbroglio will have far-reaching effects on universities and other public services.

 

Barry Erwin, president of the Council for a Better Louisiana, offers a ray of hope for those who will suffer the most if the Legislature doesn’t come up with some solutions during its special session beginning today. “If nothing happens, then what he’s (Edwards) saying is correct,” Erwin said. “The budget situation is serious, and I think we have some hugely serious issues. But I don’t think anyone thinks that they’re not going to do something to address those problems.” The governor’s critics continue to insist budget cuts are the only answer. However, Edwards addressed that fallacy in his TV message. He said some would try to downplay the severity of the problems for political gain, an obvious reference to state Treasurer John Kennedy, who is running for the U.S. Senate. “Remember, for eight years, we’ve had a conservative governor with a conservative Legislature. If stabilizing the budget were as easy as cutting spending and simply reducing state contracts, that work would have been done, but it hasn’t.”Edwards never mentioned Gov. Bobby Jindal by name, but Jindal got us where state government is today because of his presidential ambitions. Many of our current governor’s critics were devoted followers of Jindal, and they conveniently ignore his major role in creating our fiscal nightmare.

 

Number of the Day

$880,272,202 – Reduction in state support for the Department of Health and Hospitals in 2016-17 if the Legislature refuses to raise new revenues. (Source: Executive Budget).