To the Members of the House Appropriations Committee
My name is Jan Moller, and I’m the executive director of the Louisiana Budget Project, a nonprofit policy research and advocacy organization focused on lifting up low- and moderate-income families. Thank you for this opportunity to provide testimony on House Bill 105, the state’s operating budget for the 2020-21 fiscal year.
In normal times, the choices you have to make between various budget priorities would be obvious at this stage of the process. You would have an official revenue forecast in place, and your job would be to allocate that money between the many needs of our citizens and communities. But these are not normal times. Louisiana’s economy – and revenue base – have been profoundly shaken by the Covid-19 pandemic.
At this time we simply don’t know how deep our budget hole will be. But we know it will be serious, and likely long-lasting. And we know that this threatens many critical priorities. Our investments in public schools, workforce training, child welfare services, higher education, and healthcare services for children, the elderly and people with disabilities are all potentially facing cuts.
Important services such as public defenders that depend on revenue from fines and fees are in desperate need of resources. Poor people accused of crimes are languishing in jail right now because the state does not have the money to provide them with a lawyer as the Constitution requires.
Our efforts to revive Louisiana’s economy will be sorely hampered if the state cannot make needed investments in early childhood education, so working parents will have a safe and nurturing environment for their children as they head back to work.
With so many needs, and such an uncertain revenue base, we urge you to do the following:
Stop digging: The old adage about what to do when you’re in a hole has never been more appropriate. Louisiana is required to maintain a balanced budget, and that job will get much more difficult if the Legislature approves new tax breaks, as some members have proposed. Tax cuts at this time will only make our budget problems worse, and will harm the most vulnerable Louisiana residents who are counting on you to help maintain basic services.
Maximize the use of CARES Act and other federal funding: The federal government has made aid available to states through three stimulus bills. While these laws come with some unnecessary restrictions and strings attached, Louisiana should make maximum use of this one-time funding and make sure that it’s directed to those in the greatest need. For example, Louisiana could use one-time federal funding to provide protective equipment for child-care providers, and to ensure that more families have access to the Child Care Assistance Program.
Current federal aid is not enough: Louisiana will not be able to cut its way out of its current financial predicament without devastating effects on families that need your help to pay for college, get the healthcare they need and stay safe in their communities. As Congress considers additional aid packages in the coming weeks, we urge you to speak with a collective voice in favor of more aid for state governments, such as the SMART Fund bill introduced by U.S. Sen. Bill Cassidy.
Prioritize the neediest: It took an entire decade for Louisiana to recover from the devastating budget cuts that started during the Great Recession. Programs that serve Louisiana’s neediest citizens, such as child welfare services and the TANF block grant administered by the Department of Children and Family Services, were cut to the bone and have only seen their funding stabilized in the last couple of years. As you look for ways to reduce spending, your top priority should be to preserve the services for children and people with disabilities who cannot survive without your help.
Take a balanced approach: While this committee does not have authority over revenue issues, Louisiana should use this crisis as a reason to review its inefficient tax structure. This is the time to do away with the tax breaks, deductions and other giveaways that have failed to deliver economic growth and make it harder to invest in the education, training and other support programs that are the true drivers of a strong and equitable economy.
Thank you for your time and your hard work. I wish you nothing but the best as you undertake this most difficult task.