May 21, 2020

To the Members of the Senate Finance 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. 

I write in opposition to House Bill 118. This bill would cap annual appropriations at 98% of the state general fund (direct) forecast. This was a bad idea during the best of times, and it is an even worse idea today, when our state faces an unprecedented economic crisis that threatens the state’s ability to provide basic services. 

Two percent doesn’t sound like a lot, but it is. In Fiscal Year 2019, state general fund revenues came to a little over $10 billion. Two percent is about $200 million that the Legislature would be leaving on the table. Let’s look at what that buys us in the governor’s proposed budget

  • It’s more than the entire general fund allotment for the Executive Department ($143 million), 
  • It’s almost four times as much as we plan to spend on the Secretary of State in FY 21 ($54 million). 
  • It’s about six times the annual general fund budget of Louisiana Economic Development. 
  • It’s nearly 40% of what Louisiana plans to spend on corrections next year. 

Let’s not kid ourselves. We know Louisiana is going to fund its prisons, the Division of Administration and the November elections. When cuts have to be made, they will come mainly from two areas: health care and higher education. 

The coronavirus pandemic has blown a billion-dollar hole in the state budget, and Louisiana likely faces a slow recovery. Finding adequate funding for our hospitals, universities and first responders will be hard enough without taking up to $200 million off the table. 

This is not to suggest that the Legislature shouldn’t build up the state’s reserves during good financial times. A healthy rainy-day fund is a hallmark of good budgeting. And if the Legislature decides in a given year that it doesn’t want to spend up to the official forecast, all it would take is a simple majority vote in each chamber. But this bill would tie the Legislature’s hands at the worst possible time, and I urge you to reject it.