With not many 'appealing options,' Gov. John Bel Edwards, state leaders tackle $1.9 billion budget shortfall

When Gov. John Bel Edwards releases his plan next month for the budget that begins July 1, it will show what state government would look like after $1.9 billion in spending cuts to address the looming revenue shortfall.

It won’t be the budget he wants the state Legislature to adopt, he admitted this week.

“We’re going to have a budget that reflects the budget that we have,” he said.

The resulting document is expected to be a sobering reflection of the state’s severe fiscal crisis, with deep hits to higher education and health care in particular.

Edwards predicted that such deep cuts would force colleges into financial exigency and would lead to hospital closures.

Last year, as the state faced a similarly drastic shortfall, higher education officials repeatedly referred to the threat of a $1.2 billion cut as a “doomsday scenario,” but it eventually was avoided.

Edwards met with Higher Education Commissioner Joe Rallo, LSU President F. King Alexander and other leaders on Wednesday to discuss the outlook for the coming year and his plan to illustrate the real impact that deep cuts would have.

Alexander said he appreciated Edwards’ candor about the severity of the budget crisis.

“The budget shortfall surpasses last year’s unprecedented deficit, and without legislative intervention, LSU will have to take significant steps to mitigate cuts,” Alexander said. “We aren’t left with many appealing options, but the numbers don’t lie. Something will need to be done to stabilize the budget and start the process of moving LSU toward greater national competitiveness.”

Edwards’ administration has offered up a series of tax proposals for state lawmakers to consider.

Among his suggestions: increasing the state’s 4-cent sales tax by a penny; increasing the cigarette tax by 22 cents a pack; overhauling the personal income tax brackets; and flattening the state’s corporate income tax brackets.

Republican legislators will gather for a retreat early next month to hash out their plans for addressing the state’s repeated budget shortfalls.

House Majority Leader Lance Harris said he expects legislators will bring forth their own proposals, but he was appreciative of Edwards’ recommendations for the budget. “It had a bit of meat on the bones that we could start chewing on,” he said.

Harris said he thinks Edwards’ plan to rely on the real numbers will help give legislators a clearer picture of the budget situation.

“There won’t be an increase in spending at all,” he said. “We’re going to be looking at it from that angle.”

Some Republicans, including state Treasurer John Kennedy, have called for various cuts to address the shortfall.

“I don’t envy any public official who walks into office with a $1.9 billion budget hole to fill, but they had better be careful trying to fill it by burdening our citizens with higher taxes,” Kennedy said in a news release. “Burdensome taxes will be like throwing gas on an already out-of-control fire.”

Edwards said he is open to cuts, but he thinks the scope of the budget shortfall is so large that it also requires an infusion of new revenue.

“A 25 percent cut is still $500 million,” he said. “Go to LSU and find out what would happen to them if they had to take their share of $500 million in cuts.”

Follow Elizabeth Crisp on Twitter, @elizabethcrisp. For more coverage of state government and politics, follow our Politics blog at http://blogs.theadvocate.com/politicsblog .

More Stories