Another budget gap – with caveats

Another budget gap – with caveats

Louisiana faces a $962 million gap between the revenues the state expects to bring in and ongoing expenses for the 2021-22 fiscal year, which starts on July 1. Most of the shortfall is due to the loss of federal coronavirus relief funding, which was used to balance the current-year budget but is not guaranteed for next year. In normal times, a nearly $1 billion budget gap would require significant cuts to higher education, health care and other important state services. But as the AP’s Melinda Deslatte explains, there are several reasons to believe the worst-case scenario won’t materialize: 

The state has $293 million in unspent cash from this year because tax collections came in better than expected, and those dollars could help cover some of next year’s expenses. Plus, Louisiana is receiving new federal aid passed by Congress in December, some of which could help offset budget cuts next year once the state learns what strings exist in the latest assistance. In addition, President Joe Biden is proposing additional aid to states for Congress to consider. Louisiana also has a $270 million surplus left over from the 2019-20 budget year, but lawmakers and the governor can’t use that to pay for ongoing expenses.

A Black economic recovery
Black Americans have been hit harder than any other group by the Covid-19 pandemic – with higher infection and death rates, and deeper economic losses. As President Joe Biden tries to chart a new course for pandemic response and economic recovery, many scholars and activists are urging him to target Black people for recovery aid. The Washington Post’s Tracy Jan

Black Americans want President Biden to narrow systemic racial inequalities that have left them trailing Whites on every economic measure, gaps that are worsening amid the coronavirus recession. Black earnings for low-income households are predicted to fall by at least 35 percent compared with 2018, reversing gains since the last economic recovery, according to an analysis by the Center on Budget and Policy Priorities, a left-leaning think tank, and the Groundwork Collaborative, an activist group focused on economic issues. “What Biden has to do that few presidents have been willing to do is target,” said Julianne Malveaux, a labor economist and former president of Bennett College. “If I tell you that Appalachia was hardest hit with covid, you would have a special relief program for Appalachia. When I tell you that Black America is hardest hit, you have some reluctance to deal with race head on.

Covid strains rural hospitals
The latest surge in coronavirus infections, more geographically spread out than previous peaks, has put a particular strain on Louisiana’s rural hospitals. The Advocate’s Youssef Rddad reports that many hospitals don’t have enough staff on hand to care for patients, even if beds are available, and that the bed shortages at big urban hospitals has had a spillover effect in rural communities. 

Larger hospitals have been pinched by balancing their regular patients as well as a swell of COVID-19 patients. That trend has left rural hospitals with fewer places to send people after they’ve been stabilized but still need specialized treatment for things like heart attacks or serious injuries afterward. …  At Lane Regional Medical Center, doctors have had to reach out to hospitals as far as Oklahoma to find a place for patients needing specialty care or operations that require longer stays.

A drop in reading scores
Reading scores for Louisiana’s youngest learners have dropped sharply over the past three years – a troubling trend that has education leaders flummoxed and could translate to lower academic achievement for these students in the years ahead. More than half of students in kindergarten through third grade are reading below grade level, despite years marked by various efforts to improve the scores and put students on a path to better academic performance. The Times-Picayune | Baton Rouge Advocate’s Will Sentell reports

For all grades, 55% were reading below grade level in 2020 compared to 42.8% in 2018. … “I think K-3 is the gatekeeper for everything else that is going to happen,” said former BESE President Linda Johnson, who served on the board for 13 years. … Johnson said the state suffers from a lack of adequate pre-school programs, which means too many students enter kindergarten not ready to learn. She said the state has also implemented too many programs for reading improvements with too many stops and starts.

Number of the Day
$85 million – Amount of “off-the-books, surplus cash” sitting in the state Legislature’s financial accounts. The money could be used to pay for needed repairs to the state Capitol, as an alternative to state borrowing (Source: Melinda Deslatte, The Associated Press)