Everything you need to know about Louisiana's budget battle
BATON ROUGE, LA (KSLA) - The state of Louisiana is no stranger to budget problems. When the state legislature meets for a special session next week, it will be the sixth time in just over two years that lawmakers have needed a special session to try to balance the state's operating budget.
Until they find a solution, the future of your tax dollars hangs in the balance.
Here's why the state is in a constant budget battle and what it means for you.
The state of Louisiana doesn't have enough money to fund all the government programs for the next fiscal year, which begins July 1. Right now, there's a shortage of about $648 million. Since there's not enough money, lawmakers either have to cut funding for government services, raise taxes, or some combination of both.
This means you could end up paying more money to the state so the government can operate; and funding for things like education, public safety, and healthcare could be cut.
In 2016, the state faced even bigger budget deficits than today. At the time, Louisiana Governor John Bel Edwards said it was the worst budget shortfall the state had ever faced.
In special sessions that year, the legislature raised taxes to generate more than $1 billion in additional tax revenue. However, lawmakers set a two-year expiration date on the new taxes.
Now, two years later, the state is barreling toward a so-called "fiscal cliff." The state will lose more than $1 billion in income when all those new taxes expire at the end of June, creating this big budget problem.
Lawmakers had a chance to address that shortfall earlier this year during a special session, but nothing was resolved.
The Louisiana House of Representatives and the Senate passed a budget, but it won't go into effect.
The House passed a budget in April that included deep cuts to healthcare services. The House plan would have left 37,000 elderly and disabled people without Medicaid coverage, causing thousands to be evicted from nursing homes across the state. It also would have threatened the closure of many state partner hospitals.
The bill then went to the Senate which approved a version with their own amendments and changes on Tuesday. The Senate's budget does protect Medicaid recipients and hospitals but slashes funding for colleges, food stamps, and public safety instead. It also cuts 30 percent from TOPS scholarship funding.
The bill then went back to the House, which voted to pass it on Thursday. Governor Edwards vetoed the bill on Friday. He wants lawmakers to renew taxes to stop the cuts.
Louisiana residents are left to wait for the special session to see what spending plans survive and what taxes could be imposed to fill the budget hole.
A special session must be called because, by law, the state legislature can't consider whether to renew expiring taxes or create new ones in the regular legislative session.
Whatever plan ultimately gets passed would take effect on July 1.
The legislature is heavily restricted when it comes to how they can move money around and what funding they can and cannot cut. But if the budget that's on the Governor's desk is any indication, the following programs could be at risk for cuts:
- TOPS Scholarships: The budget passed by the House and Senate only includes TOPS funding equal to 70% of tuition. This means graduating high school seniors may have to pay more for college than they were expecting, or colleges may have to pick up more of the tab to help TOPS-eligible students make up the difference.
- Higher Education: Cuts to state funding for higher education likely means tuition will increase at our state's public colleges and medical schools. In turn, student spending would drop, fewer people would be able to afford to attend college, and students will be acquiring more student loan debt to pay the higher costs or we could lose students to other states where education is more affordable.
- Healthcare/Human Services: The budget that the legislature approved does fund Medicaid and healthcare. However, according to Associated Press reporting, the state's food stamp program would be eliminated under the current budget plan.
The special session is set to begin on May 22. Lawmakers have until midnight on June 4 to come up with a solution.
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