SADOW: Louisiana’s Budget Contains Some Intriguing Story Lines

Earlier this month, Louisiana mainstream media covered the release of the state’s faux executive budget by Democrat Gov. John Bel Edwards. Lots of surface details emerged, but they all glossed over, if not missed entirely, the deeper and more substantive stories.

Primary among these in the pretend budget – a sham because it contained revenues unrecognized by the state’s panel empowered to do so, the Revenue Estimating Conference – was without its fake revenue Edwards essentially couldn’t make any new spending commitments. The reason: Medicaid expansion expenses are eating the state out of house and home, despite over $300 million in tax increases for the program Edwards falsely alleged would save the state money.

Other consequences followed. You couldn’t swing a dead cat during last year’s gubernatorial campaign without Edwards pledging to raise salaries for educators, but even with the unauthorized money included his spending plan had no room for these. With a half-normal-sized increase in the Minimum Foundation Program Edwards suggested districts individually approve raises with that bounty.

This should ignite a debate over appropriate funding sources of elementary and secondary education in Louisiana. Comparatively speaking, according to the latest (2016) data among the states it ranks proportionally fourth in federal, 36th in state, and 23rd in local revenues to fund this. And while property taxes pay for the largest proportion of all revenues across all states, about 36 percent, Louisiana ranks 43rd at just around half of that. Keep in mind Louisiana’s residential property tax rates on a home at the 2017 median national value are on average third lowest in the country.

These numbers indicate that the state gets away with funding less than average because of the higher influx of federal dollars. Moreover, the use of property taxes at the local level, or even at the (presently untapped but constitutionally permitted up to 5.75 mills) state level seems underutilized.

The commission of state money outside of the MFP to raises – the procedure used to grant these last year – especially rankled educators as Edwards seeks for his appointees pay boosts around $1 million and shaved expenses from other areas of government to achieve this and other increases. Regardless, these minor reductions proved insignificant across all state government agencies that depend on any general fund monies – except one.

That, of course, was to the department to whom Edwards has lost several high-profile legal cases, Justice headed by Republican Atty. Gen. Jeff Landry. Since Edwards began submitting budgets, of the statewide elected officials he has advocated by far the largest cuts to Landry’s $75 million or so bailiwick.

Landry has opposed Edwards publicly the most of the statewide elected executives. With about a quarter of Landry’s budget coming from the general fund, Edwards proposed slashing about nine percent of that. It hasn’t worked in the past. In 2017, the Republican-led Legislature gave Landry’s agency $2 million more than Edwards had wanted, in 2018 $3.5 million more, and in 2019 $1.3 million more.

The budget also asks for the same amount as last year for capital outlay, but the amount could go as much as $100 million higher. That represents revenues unrecognized from this fiscal year by the REC, the majority of which is eligible for expenditure on capital items. Edwards didn’t include these in his fantasy budget, which addresses only recurring revenues that go towards capital outlay; a different budget encapsulates the exact expenditures.

Just as REC recognition of the still-imaginary revenues remains crucial to Edwards’ budget, its recognition of the nonrecurring revenues that can go to capital outlay are critical to Edwards’ overall agenda. The more outlay, the more resources Edwards has to try to influence lawmaker votes by threatened use of line item vetoes on their desired projects.

As bill prefiling reveals a gathering storm of legislation that Edwards doesn’t want heading his way and with Republicans at a Senate supermajority and just short of one in the House, he’ll need all the help he can get to stop an avalanche of laws at odds with that agenda.

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