Matt Houston/Manship School News Service
The Louisiana Legislature sent six bills, including the state operating budget, to Gov. John Bel Edwards Friday, and then promptly folded its tent, ending the special session with three days to spare.
The Senate earlier in the day passed, 26-9, House Bill 1, which appropriates all forecasted revenue to meet nearly $29 billion in budgeted state expenditures but instructs agencies to refrain from spending a combined $60 million as a precaution against a midyear revenue shortfall. The House had adopted it Wednesday, 56-46.
The Legislature also passed House Bills 2, 3, and 7, also with no fanfare, which prioritize and fund nearly $1 billion in state construction projects, along with the supplemental budget for last fiscal year and a technical bill that authorizes money deposits and withdrawals.
The House adjourned sine die (without a day to convene again) at 5:15 p.m. and the Senate followed suit a few minutes later.
Edwards, in a press conference held after the chambers adjourned, called HB1 “a prudent, conservative budget that the people of Louisiana can be proud of, It isn’t perfect, but under the circumstances, it does the best we can to fund our priorities.”
He said the session was “much harder than it needed to be and it took longer than necessary, which is obvious because we circled back around to about where we were last week.”
Civil service workers will get 2 percent pay raises, higher education will not take a cut, TOPS will be fully funded, psychosocial services will continue, and the Acadiana Youth Center will open.
Most of the budget debate focused on possible solutions for midyear cuts. Republicans, led by HB 1 author Rep. Cameron Henry, R-Metairie, consistently had argued it is irresponsible to spend dollars that appear available now, but may not be available in the future.
“This is not an exact science, and our two economists could be off by $50 million or more each,” Sen. Sharon Hewitt, R-Baton Rouge, said. “We continue to select the most optimistic revenue forecast and build a budget off that like it’s a rock-solid number.”
“We cannot spend 100 percent of a wrong number,” Henry repeatedly said throughout the sessions. He missed the final three days of the special session to be with his brother, who works for injured U.S. Congressman Steve Scalise in Washington, D.C.
The original House version of the bill debated during the regular session would not have appropriated around $206 million, which Republicans said is close to the amount the governor has been forced to cut from state agencies during recent midyear deficits.
The Senate instead voted, 36-1, to appropriate every available dollar near the end of the regular session on the rationale that the appropriation but was lean to begin with. On the final day, it attempted to compromise with the House by adopting a resolution that would have required state agencies to refrain from spending a combined $50 million. That hold-back would have been executed proportionately, meaning larger agencies would have had more responsibility to spend prudently.
Neither side could reach an agreement. Despite significant parliamentary maneuvering by Rep. Walt Leger, D-New Orleans, the House did not vote on any Senate version of the bill, though there were indications it would have passed and the special session could have been avoided.
Democrats argued that unappropriated money, if realized in actual revenue, would be counted as surplus money. Surplus is constitutionally required to go through certain accounts, such as the “rainy day” fund and the overcollections fund, before it could be spent again in a supplemental budget during the next regular session.
Agencies would have had to cut existing programs or jobs now, and jump through more legislative hoops in the future to get the money back, argued Democrats and a handful of moderate Republicans.
By appropriating the dollars, but asking for conservative budgeting from each agency, the money is available in case of a shortfall. If it is realized, it could be spent without a supplemental appropriation.
Most Republicans, however, still expressed concern that the hold-back isn’t enough to cover potential deficits.
“My concerns are not for this budget, but for the future,” Sen. Conrad Appel, R-Metairie, said. “We had an opportunity to create a soft landing [for the cliff], but instead we’ve increased spending and picked up a lot of recurring expenses. This $60 million is a drop in the bucket. We’re not holding back enough.”
“We haven’t been solving these budget problems for 10 years, but many of the people who vote against this budget voted for every Jindal budget,” Sen. J.P. Morrell, D-New Orleans, said. “It was OK to vote for budgets that were off by 2 to 5 percent under the previous governor.”
Morrell’s comments reflect a sentiment, shared by the governor, that negotiations were about politics, not money.
All eight Senate Republicans who voted for the current budget voted two weeks ago for the budget that spent everything and withheld nothing. Only Sen. John Milkovich, D-Shreveport, voted was consistent in his negative vote.
The bill authorizes the Division of Administration to create a plan for deficit reduction. Commissioner Jay Dardenne said he would identify the agencies which can withhold money, and instruct them to do so. The plan will change if ongoing forecasts from Revenue Estimating Conference, the group given the annual task of determining the revenue levels, change. The conference forecasts have been off the mark to the low side in recent years, creating shortfalls.
Aside from the administration of the holdback, the difference between the Senate’s final regular session plan and the current version, which the House Wednesday adopted, 56-46, amounts to essentially $10 million, or less than one-tenth of 1 percent of the state’s $29 billion budget.
“I think the bill is actually better than it was before,” finance committee chairman Sen. Eric LaFleur, D-Ville Platte, said. “It’s smart, reasonable, and I think we did the right thing. The winner here is not the House, the Senate, or the governor – it’s the state.”
“It ain’t good times in the bayou,” Sen. Norby Chabert, R-Houma, said. “The cliff is coming, but the sky isn’t falling. This budget is just like me – far from perfect, but trying.”
Morrell and Sen. Jack Donahue, R-Mandeville, each called this House Bill 1 the best budget they had seen since becoming senators a decade ago, although Donahue voted against the bill because he said it did not hold back enough money.
Legislators lamented their own inability to pass tax reform during the regular session while debating the implications of cuts Friday. Several measures went before House committees that would have lowered tax rates, but broadened the tax base. Only a few made it out before dying on either floor.
The Legislature cannot raise new revenue in a regular session until 2019, meaning that policy would not go into effect until 2020. However, a special session will almost certainly be called this year to address the looming $1.3 billion fiscal cliff in the 2018-19 fiscal year when temporary increases in sales taxes expire.
Lawmakers were able, however, to comprehensively reform the criminal justice system during the regular session. Gov. John Bel Edwards signed ten bills Thursday that will free about 10 percent of prisoners in the state, and could save the state around $78 million over the next ten years.
Much time was spent during the regular session was consumed debating in committee hearing or the floor of the chambers emotional issues such as sanctuary cities, removing monuments to Confederate military heroes, the renaming of a school, investing in companies that don’t support Israel, and banning of the death penalty.