The state budget, HB 1 by Rep. Jim Fannin (D-Jonesboro), is bogged down in the Senate Finance Committee, and there is no clear picture of what the budget will actually look like after the session ends on June 21.
As proposed, the $25.4 billion budget includes deep cuts for higher education, health care and a number of other state responsibilities. But as reported in the May 21 edition of the Weekly Legislative Digest, the Senate and House of Representatives are at loggerheads over resolving a shortfall facing the state in the current budget year.
The stumbling block is over use of the state’s “rainy day fund” to shore up the budget. While both sides want to use the fund to avoid a constitutionally prohibited deficit, they disagree over how and when the funds should be repaid.
The situation grew murkier on Friday, when the state’s Revenue Estimating Conference met to announce yet another shortfall in state revenues. With just two weeks left in the fiscal year, state economists said that revenues have fallen by another $261.4 million this year.
The state already cut this fiscal year’s budget by $200 million last December, and by another $319 million in April.
Leading the most recent decline in estimated revenues is a $250 million shortfall in collection of personal income taxes.
As Greg Albrecht, chief economist for the legislative fiscal office, said, “Obviously, we have been dramatically wrong this year.”
That set up yet another confrontation between the House and Senate. Speaker of the House Jim Tucker (R-Terrytown) said the Revenue Estimating Conference should not accept the economist’s report until the end of the year, and use some constitutional sleight-of-hand to pay back the deficit in the coming year.
Senate President Joel Chaisson (D-Destrehan), on the other hand, said the constitution does not allow a deficit, and recommended that the conference recognize the shortfall, which would require more cuts over the next couple of weeks.
Because decisions by the Revenue Estimating Conference must be unanimous, the issue was left hanging at that point.
The Senate Finance Committee will continue its discussion of HB1 next week.
Showing posts with label Senator Joel Chaisson. Show all posts
Showing posts with label Senator Joel Chaisson. Show all posts
Friday, June 11, 2010
Thursday, May 27, 2010
How bad can it get?
How bad can things get for public education in Louisiana? As the old song says, “You ain’t seen nothing yet.”
On Monday, the Senate Finance committee killed any hope of increasing funds for public schools when it refused to increase public education’s Minimum Foundation Program by the traditional 2.75%.
Then on Tuesday, the state’s Revenue Estimating Conference revealed that we face yet another shortfall of perhaps as much as $100 million this year. That’s on top of the $319 million budget hole already confronting lawmakers as they struggle to balance the state ledger.
Anticipating a dark economic future, school boards around Louisiana are announcing Reductions in Force. In plain English, that means they are firing teachers and school employees.
The state has a “rainy day fund” that should be tapped to help stave off the growing crisis. But a deep and profound disagreement between the Senate and House of Representatives is keeping that fund off-limits.
Both Senate President Joel Chaisson (D-Destrehan) and Speaker of the House Jim Tucker (R-Terrytown) say they are willing to withdraw $198 million from the fund to help plug the budget hole. They have very different opinions about how and when the fund should be paid back, and that is stalling any movement on the issue.
Sen. Chaisson says the law allows the state to repay the rainy day fund when state revenues reach the peak of the post-Katrina economy of 2008. Rep. Tucker says the state must repay the rainy day fund next year, using revenues from a tax amnesty program.
If Rep. Tucker prevails, it means the rainy day fund cannot be tapped again next year, when another budget deficit is already projected. According to Sen. Chaisson, Rep. Tucker’s plan is therefore “absolutely pointless.”
The Revenue Estimating Conference must certify that rainy day funds are available for use. But decisions by the Conference must be unanimous. Both Sen. Chaisson and Rep. Tucker are Conference members, and until they come to an agreement, there will be no movement to fix the budget.
What are we to make of this awful situation?
LFT President Steve Monaghan says state leaders simply are not focused on the real issues.
“There is mounting evidence that this session is all about things that it should not be about, and is not facing the real issues,” says Monaghan. “They should be focused on the fiscal crisis, not just for teachers and school employees, but for all the citizens of Louisiana.”
For certain, this is a case of chickens coming home to roost. When the state seemed to be in good economic shape, lawmakers and governors doled out hundreds of millions of dollars in unnecessary and unwise tax giveaways to corporations and high-income earners. Anti-tax demagogues rolled over anyone who questioned the wisdom of severely reducing state revenues.
And as bad as the situation is now, the governor and legislature still refuse to consider any revenue measures. The mantra of the Jindal administration is “we must do more with less.”
The sad truth is, you can’t do more with less. You can only do less with less. Until the administration and legislature come to grips with that reality, Louisiana faces a bleak future indeed.
On Monday, the Senate Finance committee killed any hope of increasing funds for public schools when it refused to increase public education’s Minimum Foundation Program by the traditional 2.75%.
Then on Tuesday, the state’s Revenue Estimating Conference revealed that we face yet another shortfall of perhaps as much as $100 million this year. That’s on top of the $319 million budget hole already confronting lawmakers as they struggle to balance the state ledger.
Anticipating a dark economic future, school boards around Louisiana are announcing Reductions in Force. In plain English, that means they are firing teachers and school employees.
The state has a “rainy day fund” that should be tapped to help stave off the growing crisis. But a deep and profound disagreement between the Senate and House of Representatives is keeping that fund off-limits.
Both Senate President Joel Chaisson (D-Destrehan) and Speaker of the House Jim Tucker (R-Terrytown) say they are willing to withdraw $198 million from the fund to help plug the budget hole. They have very different opinions about how and when the fund should be paid back, and that is stalling any movement on the issue.
Sen. Chaisson says the law allows the state to repay the rainy day fund when state revenues reach the peak of the post-Katrina economy of 2008. Rep. Tucker says the state must repay the rainy day fund next year, using revenues from a tax amnesty program.
If Rep. Tucker prevails, it means the rainy day fund cannot be tapped again next year, when another budget deficit is already projected. According to Sen. Chaisson, Rep. Tucker’s plan is therefore “absolutely pointless.”
The Revenue Estimating Conference must certify that rainy day funds are available for use. But decisions by the Conference must be unanimous. Both Sen. Chaisson and Rep. Tucker are Conference members, and until they come to an agreement, there will be no movement to fix the budget.
What are we to make of this awful situation?
LFT President Steve Monaghan says state leaders simply are not focused on the real issues.
“There is mounting evidence that this session is all about things that it should not be about, and is not facing the real issues,” says Monaghan. “They should be focused on the fiscal crisis, not just for teachers and school employees, but for all the citizens of Louisiana.”
For certain, this is a case of chickens coming home to roost. When the state seemed to be in good economic shape, lawmakers and governors doled out hundreds of millions of dollars in unnecessary and unwise tax giveaways to corporations and high-income earners. Anti-tax demagogues rolled over anyone who questioned the wisdom of severely reducing state revenues.
And as bad as the situation is now, the governor and legislature still refuse to consider any revenue measures. The mantra of the Jindal administration is “we must do more with less.”
The sad truth is, you can’t do more with less. You can only do less with less. Until the administration and legislature come to grips with that reality, Louisiana faces a bleak future indeed.
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