Budget deficit projected
Officials cite several factors; Jindal decisions coming
The $895 million shortfall projected for the upcoming state spending year stems partly from the use of more than $300 million in one-time money to balance the current year’s $25 billion state operating budget.
Also contributing to the state’s money problems are the number of offenders returning to prison for parole violations and the impact of tuition increases on the college TOPS scholarship program.
The shortfall assumes what would be the first significant increase in basic state aid for public schools in several years.
However, state officials cautioned that Gov. Bobby Jindal is still crafting his proposed state operating budget for the fiscal year that starts July 1. Whether the governor actually will include a nearly 3 percent increase in basic state funding for public schools is unknown.
“I’d like for it to happen. Do I think it’s going to happen? I don’t know,” said state Sen. Jack Donahue, R-Mandeville and chairman of the Senate Finance Committee.
The governor will present his proposed budget to legislators on Feb. 9.
State Commissioner of Administration Paul Rainwater, the governor’s top budget adviser, said Thursday he still is talking with education officials, including new state Superintendent of Education John White, about the level of education funding in next year’s budget.
“We’re still working on the budget itself,” Rainwater said.
He declined to comment on whether it would be prudent to essentially freeze basic state aid to public schools for a fourth consecutive year.
On the use of one-time dollars, Rainwater said it was necessary to use money that will only materialize once to pay expenses that must be met year after year.
He said higher education and health care would have sustained heavy budget cuts without those dollars.
Public schools receive state funding through a formula called the Minimum Foundation Program, which is $3.4 billion this current fiscal year. Other than adjustments for factors such as an increased student population, the formula has been frozen for three years because of the state’s financial problems.
Steve Monaghan, president of the Louisiana Federation of Teachers, noted that the governor made no mention of an MFP increase in a recent 30-minute speech on sweeping changes to public education in Louisiana.
He said he has little optimism that an increase will materialize in the governor’s proposed budget, especially since it is contributing to the projected shortfall.
“Look forward to seeing it in the budget. Encourage the governor to put it in the budget,” Monaghan said.
The Jindal administration gave legislators the first real idea Friday of how expenses are expected to outpace revenue in the fiscal year that starts July 1. To balance this year’s budget, legislators pulled money sitting in funds to pay expenses that must be met year after year. The money shuffling avoided devastating cuts but is leading to problems in next year’s budget.
The administration’s calculations include expenses that do not necessarily have to be met, such as $12.3 million for inflation and $22 million for state workforce pay raises.
More than half of the shortfall, or $538 million, is in the state’s Medicaid program, which provides health insurance to the poor. State officials used $335 million in one-time dollars to pay health-care expenses in the current year’s budget, according to the state Department of Health and Hospitals. Those dollars will not materialize again but the expenses will, contributing to the shortfall.
Also creating problems for state government are the tuition increases that generated more money for public colleges and universities. The increases inflate the cost of the Taylor Opportunity Program for Students, which provides state-funded college scholarships.
Yet another wrinkle is a $14.8 million shortfall stemming from an overestimation of how many offenders would be affected by a 2010 law. The law allowed offenders returned to prison for parole violations to subtract time from their sentences for good behavior.
Instead of reducing the number of inmates housed in parish prisons by 1,500, less than 500 benefitted, according to the Division of Administration.