A responsible approach to Louisiana’s budget

A responsible approach to Louisiana’s budget

The $31.8 billion proposed budget Gov. John Bel Edwards released Feb. 22 comes amid a period of financial stability in state government after a decade marked by fiscal turmoil. Steady economic growth, combined with the Legislature’s decision to partially renew a sales tax that was due to expire last year, means the state can expect enough revenue in 2019-20 to fund key health care and education programs without any damaging cuts to services.

Nevertheless, uncertainty hangs over the annual budget deliberations due to House Speaker Taylor Barras’ refusal to recognize an official revenue forecast for the fiscal year that begins July 1. Barras is one of four members of the Revenue Estimating Conference, which must adopt a forecast by unanimous vote before it can be used in state budgeting.

Without an official forecast in place, the governor had two unpleasant choices: He could submit an executive budget proposal based on a long-range forecast developed in June 2018, which did not include an official forecast for revenues that derive from dedicated fees or from “self-generated” revenues, such as college tuition payments. Or, he could base his budget recommendations on the revenue forecast developed by a state economist, but not yet recognized by the forecasting panel. He chose the latter, and explained his reasoning in a message to the Legislature:

No public purpose is served for me to submit a document that has no substance or value and does not reflect the improved projected state revenue situation. Doing so would lead to absurd consequences and needless widespread confusion. I would be required to submit a document that does not reflect the state’s true financial picture – without dedicated funds, self-generated fees, and revenues much less than the projected increase in taxes, licenses and fees. We are entering a short legislative session and we need to start the budget process with the true picture of the state’s finances so we can do the people’s business. We need to have a realistic budget proposal on the table right now and that’s what I am submitting.

While it’s not an executive budget, the proposed budget serves the same function: It lays out a blueprint for state spending in 2019-20, based on available revenues, and serves as the starting point for debate by the Legislature on Louisiana’s priorities.

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