Jan. 17: Midyear deficit confirmed

Jan. 17: Midyear deficit confirmed

Louisiana will once again have to endure midyear budget cuts amid a shortfall pegged at $313 million by the Legislature’s economist.

Louisiana will once again have to endure midyear budget cuts amid a shortfall pegged at $313 million by the Legislature’s economist. Gov. John Bel Edwards plans to call the Legislature into special session in order to make the needed adjustments to balance the budget. Elizabeth Crisp details the situation in The Advocate:

Edwards said he wants to spare higher education and health care as much as possible, but those two areas are left vulnerable in the budget because of protections to other services. “I have said all along that I am not willing to place the burden of this budget crisis only on the backs of our hardworking families, students or our most vulnerable citizens,” he said in a statement Friday. “In order to avoid that, the entirety of the state’s budget must be opened up in order to make these cuts, otherwise they will be concentrated in a few areas and the impact would be too painful for our people to bear. The only way that can happen is with a special session.”

The AP’s Melinda Deslatte reports that while House Speaker Taylor Barras is skeptical of the need for a special session, the leader of the state Senate agrees with Edwards.

Senate President John Alario, R-Westwego, said he also prefers a special session to lessen the cuts that fall on higher education and health programs. Even with the ability to spread the slashing, Alario said of the cuts: “I think there’s going to be a lot of pain.” The four-member Revenue Estimating Conference dropped the state’s official income forecast by $340 million for the current budget year that ends June 30. With other financial adjustments, the deficit is expected to be about $313 million.

Louisiana is hardly alone in its budget travails. An Associated Press survey shows two-thirds of the 50 states are experiencing some type of midyear budget problem.

 

Refinery processing tax proposed

Louisiana needs at least $700 million per year in new revenue to repair its crumbling roads and bridges, according to a recent task force report – which would require raising the state’s gasoline tax by 23 cents per gallon if that’s the route lawmakers choose. One task force member, however, has proposed a different solution: an oil and gas processing tax. Industry leaders aren’t amused. Will Sentell reports for The Advocate.

Rep. Kenny Havard, R-St. Francisville, said he is preparing a bill that would impose a $1.5 billion hydrocarbon processing tax on Louisiana’s 17 refineries to assist transportation and other state services. “It will be a significant amount of money,” Havard said. “There will be money to fundamentally change how we budget in Louisiana.” However, similar efforts have died for decades, and Havard’s proposal faces daunting political and legal hurdles. Chris John, president  of the influential Mid-Continent Oil & Gas Association, said Friday his group had multiple conversations with Havard about his idea. A former U. S. congressman from Crowley, John said the plan has constitutional problems, would unfairly single out 17 refineries to address a statewide problem and would put refineries here at a disadvantage with those in Texas and elsewhere. “It is a non-starter with us,” he said.

 

Public defenders could see cut

Last year, the Legislature passed a law meant to shield public defenders offices from further cuts. But, with a massive midyear deficit, all areas of the state budget may be on the table. The Advocate’s Della Hasselle explains:

According to Richard Carbo, the director of communications for Edwards’ office, “the entirety of the state government” has to be reviewed. “Everything is being looked at,” Carbo said. Matthew Block, the governor’s executive counsel, said it was too soon to tell which agencies would bear the brunt of the ax. He confirmed, however, that a letter from the state’s highest court won’t necessarily protect the Public Defender Board. “At this point we are not proposing any cuts to the Public Defender Board,” Block said, “but we have not guaranteed anyone they are not going to be subject to budget cuts.”

 

The high cost of calls to prisons

Phone calls are often the only means of communication between incarcerated people and their families. This line of connection is important for maintaining family ties and fostering relationships with children. But a 15-minute phone call can cost a family up to $4.50, while the state rakes in $5 million a year for the Department of Corrections and $6 million a year for local sheriffs. Nola.com/The Times-Picayune has the story as part of its criminal justice series.

“Predatory phone companies gouge already poor families, and it is disgraceful,” said Katie Schwartzmann, co-director of the Roderick and Solange MacArthur Justice Center, the nonprofit law firm that represented inmates in a class-action lawsuit that led to a federal consent decree at the Orleans Parish jail. “Families have to choose between filling prescriptions, keeping the lights on, and being able to communicate with a loved one who is behind bars. In the end, we all lose because the person locked up is deprived of the benefit of community and family support in moving forward with his or her life.”

 

Republican governors defend Medicaid expansion

Republican governors in states that have expanded Medicaid are speaking out in defense of that portion of the Affordable Care Act. Their core argument is that hundreds of thousands of people struggling to make ends meet would be thrown off affordable health insurance coverage if the law is repealed. They also are highlighting the budgetary implications. Politico’s Rachana Pradhan has the story:

“We are now able to provide health insurance to 700,000 people,” said (Ohio Governor John) Kasich, who circumvented his state Legislature to enact expansion in 2013 and who was the sole GOP presidential candidate in 2016 to defend that portion of Obamacare. “Let’s just say they just got rid of it, didn’t replace it with anything,” he said. “What happens to the 700,000 people? What happens to drug treatment? What happens to mental health counseling? What happens to these people who have very high cholesterol and are victims from a heart attack? What happens to them?”

 

Number of the Day

60 – Percentage of Americans who say the government should be responsible for providing health care coverage for all Americans. Only 5 percent believe the government should have no role. (Source: Pew Research Center)