This isn’t to say that in the final days of the current legislative session the Louisiana budget which is finally agreed on will constitute any particular example of fiscal discipline or usher in the onset of small government in the state, but fundamentally, the House has won.
Over the weekend the Senate passed its version of HB 1, which is the state’s budget bill. And just like is the case every year, the Senate’s version is larded up with more spending than the economic and fiscal conservatives in the House are willing to tolerate. But something has changed…
After very little debate and discussion, the Louisiana Senate passed their own version of the state budget for next year using more dollars than the House wants.
The plan fully funds the TOPS program. Higher education, the Department of Children and Family Services (DCFS), and state prisons are spared the knife.
The plan also calls for a 2 percent raise for 38,000 state workers, including probation officers. State agencies have said they are struggling to attract and keep workers, in part because wages have remained flat in recent years.
“This is a way for us to move in the right direction with regards to paying our employees sufficient money so we don’t lose them,” said Sen. Eric LaFleur, D-Ville Platte.
Still, several programs come up short under the plan, including the state’s partnership hospitals that treat the uninsured, as well as mental health services.
“There are a lot of families, and children in particular, that are impacted by these cuts,” said Sen. Karen Carter Peterson, D-New Orleans, who amended the budget plan to add $2 million more to mental health funding.
Overall, the governor’s office supports the Senate plan, calling it “responsible” and a great improvement over the House version. Unlike in the lower chamber, the Senate spends all of the money the state is expected to bring in next year.
In the House, hard-line conservatives set aside approximately $200 million to prepare for a possible shortfall down the road. The governor’s office says doing that could put state services at risk.
“The budget that came over from the House was totally unacceptable and would have been vetoed,” said Commissioner of Administration Jay Dardenne. “It’s not our intention to leave any dollars on the table because our needs are so great.”
What’s not in there? More taxes or one-time money to facilitate a larger budget than the Revenue Estimating Conference said was possible.
This is a big deal, because the Louisiana budget tradition is for the governor to make out a wish list of all the cool things he or she would like to spend money on, and then send up a budget packed with those things while whining about a projected deficit. The legislators would then scramble to find enough dollars through taxes or raiding surpluses the government may have lying around in dedicated funds in order to justify the governor’s spending.
That did not happen this year, and it’s a really big deal.
What happened this year with respect to the state-dollars portion of the budget – not the whole $29 billion; we’re talking about the $9-10 billion in the budget that Louisianans pay to the state government to fund its non-federal related obligations – was that Gov. John Bel Edwards cooked up a wish list of about $9.8 billion in spending and presented it to the Legislature with a warning that the state was some $400 million in the hole.
To which the response from House Appropriations Chairman Cameron Henry was “No.” Edwards’ budget, and its deficit, went by the boards at the very beginning. Rather than the governor’s wish list, Henry used as his starting point the figure of about $9.4 billion, which was what the Revenue Estimating Conference said the state would have coming in. He then shaved 2.5 percent off of that figure, owing to the fact the REC’s revenue projections have been wrong some 15 times over the past nine years and in nearly every year those errors have resulted in the necessity for a midyear budget cut, and presented a budget which holds back projected revenue to cover that likelihood.
And while the Louisiana budget was making its way through the House, the REC revised its projections downward to the tune of $28 million – which went a long way toward bolstering Henry’s argument for holding something in reserve to ward off the necessity of those midyear cuts.
Of course, the House budget and its strategy for keeping money in reserve never had a chance in a Senate run by Edwards through his lackey John Alario. The Senate is spending $206 million more than the House did, and it’s advocating to spend 100 percent of what the REC says will come in.
But it isn’t spending more. They’re not pumping up the Louisiana budget and then demanding tax increases to make it balance. This is a big deal.
It’s a big deal because while they’re going to have a conference committee and a compromise between the House and the Senate on how much of that $206 million Edwards gets to spend and how much of it will be held as a reserve against the REC’s revenue projections being inaccurate, two things are foreseeable if not assured.
First, the House has won the argument that the state can only spend that which it takes in. That’s a sea change in Louisiana politics. Our expectation, which we were anything but alone in having, was that the final week of this legislative session would be the scene of a mad scramble to find some tax increase the House could find 70 votes for in order to justify pumping another $300-400 million in government spending through the Louisiana budget.
And second, it’s foreseeable that the House is going to win the argument that at least a token amount of money included in the REC projections be held in reserve.
With House fiscal hawks opposed to spending all of the cash, however, the next few days of negotiations could become heated. Even so, House leaders remain optimistic they will meet the deadline.
“They want to spend more of it. We want to spend less. So we’ll meet in the middle,” said Rep. Cameron Henry, R-Metairie. Henry chairs the House committee in charge of the budget.
Henry’s happy to meet in the middle on that aspect of the Louisiana budget. He’s won. At this point the question is how convincingly he’s won. But just like LSU head baseball coach Paul Mainieri would probably have been happier with a 10-0 victory over Rice Sunday night rather than the 5-0 victory he won, Mainieri is plenty satisfied with an NCAA regional championship and a berth in this weekend’s Super Regional.
And that’s why the Democrats are busy trying to change the game. They attempted late last week to unseat House Speaker Taylor Barras, in an effort to find a new House Speaker who would have less fidelity to the idea of spending only that which comes in, and when their attempted coup failed they dug in their heels on an exceptionally stupid plan to block HB 3, the funding mechanism for the state’s capital outlay process, and hold it for ransom in exchange for more Democrats on the Appropriations Committee Henry chairs.
Democrats in the state House are continuing to try to block a must-pass construction spending bill to gain leverage with the Republican majority over other issues.
Democrats have stopped passage of House Bill 3, which authorizes the state Bond Commission to sell the bonds needed to finance the construction projects. The Legislature normally passes HB 3 without fuss because it includes projects in so many members’ districts.
HB 3 requires at least 70 votes, which gives the 41-member Democratic caucus leverage in the 105-member House. Democrats are asking for better representation on the Appropriations Committee – which writes the first version of the budget – and Ways and Means – which handles tax measures. Democrats want 40 percent of the seats on the two committees, in line with their 40 percent representation in the House.
House Speaker Taylor Barras, R-New Iberia, indicated Monday that the House Republican leadership plans to try to sidestep the Democrats by amending HB 3 onto House Bill 2, which lists the projects to be funded. Democrats question whether the Constitution allows such a maneuver.
Four senior Democrats met with Barras on Friday morning to present their requests. Later that day, Barras told reporters that he was noncommittal about what the Democrats are seeking.
The HB 3 threat is an empty one – the consequences of it, that the state would take a break from capital outlay projects for a year, would fall far more on the Democrats and on Gov. John Bel Edwards than on most of the Republicans in the House – and if HB 3 was grafted onto HB 2 nobody would likely complain.
It just goes to show how desperate Edwards and the Democrats are. For the first time in modern history, Louisiana’s governor has lost control of the Louisiana budget.