State short $895 million
$895 million shortfall projected
The Jindal administration projected an $895 million shortfall Friday in the state spending year that starts July 1.
Ternisa Hutchinson, deputy director of planning and budget for the state Division of Administration, told members of the Joint Legislative Committee on the Budget that the shortfall is based on a number of funding problems.
The biggest negative is a $538 million projected shortfall in the Medicaid program, partly to replace dollars that will not materialize again.
Other areas in need of a revenue boost include a college scholarship program and basic state aid for public schools.
The shortfall projection gave legislators an indication of the numbers Gov. Bobby Jindal is using to build a proposed state operating budget that will be unveiled on Feb. 9.
For the current fiscal year, a $1.6 billion shortfall initially was projected, although the budget hole ended up being smaller.
State Rep. Jim Fannin, D-Jonesboro and chairman of the House Appropriations Committee, said the $895 million projection surprised him despite several years of lagging revenue.
“I wasn’t expecting it to be quite that large,” Fannin said.
The shortfall is based on state revenue totaling $8.4 billion and spending exceeding $9 billion with an annual growth rate of 12.36 percent. The actual budget will be far larger once federal funds are added.
Fannin questioned the accuracy of the shortfall, saying it is likely based on what agencies requested in funding. “That’s what everybody wants, not what everybody is going to get,” he said.
Louisiana Budget Project Director Jan Moller said the shortfall shows Louisiana needs a more sustainable, broad-based tax base.
“This is the fourth consecutive year Louisiana has faced a massive budget shortfall, and the red ink is projected to continue as far as the eye can see,” he said in a prepared statement.
The Louisiana Budget Project is part of the Washington, D.C.,-based Center on Budget and Policy Priorities network. The center researches tax and budget policies, sometimes embracing ideas not welcomed by conservatives, such as encouraging efforts to expand the Medicaid program.
Barry Erwin, president of Council for A Better Louisiana, said the shortfall is significant.
“The bottom line is that agencies and institutions have been preparing for something in this ballpark, so I don’t think this comes as any huge surprise,” Erwin said. “But that’s not to say it’s not another significant hit to the budget coming on the heels of several years of significant cuts and it’s probably not over yet.”
CABL is a Baton Rouge-based nonprofit lobbying organization.
Once the governor presents his budget in three weeks, legislators will have an opportunity to make changes.
According to the Jindal administration, the state is short:
- $528 million for Medicaid payments.
- $103.8 million for basic state aid needed for public schools through what is known as the Minimum Foundation Program.
- $69.5 million for the Taylor Opportunity Program for Students, called TOPS, which provides college scholarships.
- $40.5 million for a pre-kindergarten program.
- $22 million for merit pay increases.
- $12.3 million for inflation.