When it was clear lawmakers would not offer voters a new constitution, and there would be no package of Article VII amendments targeting finance and taxation, House Speaker Phillip DeVillier reached out to his membership to explain the situation.
DeVillier told reps the approaching budget gap, whatever it ends up being, is due to the scheduled sunset of the 0.45 percent temporary state sales tax and a variety of other factors, like an expiring 2% tax on business utilities and the legislative decision to redirect vehicle sales taxes into transportation funding.
“But we have options,” the speaker added, “that can be considered that will balance the budget, including finding efficiencies in government and creating a more predictable tax structure for the state.”
In other words, spending cuts and tax reform—in that order, according to his statement.
As luck (or planning) would have it, Gov. Jeff Landry has given state agencies a mandate to tighten their belts.
The Division of Administration is forecasting a shortfall of about $340 million for the next fiscal year, according to Joint Budget Committee testimony. That’s less than what was projected earlier this year.
But there’s a major catch.
The total doesn’t include $248 million in additional dollars for educational initiatives, including teacher pay stipends, that lawmakers would like to continue funding. Include those costs, and the total gap rises to approximately $588 million, which in turn—believe it not—is a bit higher than the $558.8 million shortfall the Landry administration was anticipating in January.
In response, over the next two months, Appropriations Chair Jack McFarland will bring in department and agency heads that receive the bulk of the state general fund dollars to present their suggestions to save money. He expects to have multiple agencies at the proverbial table each week.
“We’re asking them to say, ‘Where can we do better?’” McFarland says. “Where can we save money rather than having to cut [services]?’”
