SADOW: Are Conservatives Leverage Louisiana Into A Better Budget?

It’s a great first step, but the Louisiana Legislature can do a whole lot better when it comes to a responsible fiscal year 2024 budget and use of surplus dollars over the last couple of years.

This week, the state’s general operations budget HB 1 kicked off its journey to the consternation of free spenders. Democrat Gov. John Bel Edwards and his partisan followers in the Legislature – and not a few Republicans including chamber leaders – had grandiose ideas about the using the bonus bucks mainly on infrastructure and larding out all sorts of new commitments, such as pay raises for educators and local public safety personnel, in this year’s spending plan.

But to accomplish that, the state would have to bust its spending cap by several hundred million dollars, a move opposed by the Louisiana Conservative Caucus that is comprised of most House Republicans as well as the Louisiana Freedom Caucus, which likely overlaps in membership considerably with the Conservative Caucus. These legislators argue that the surplus money (past the constitutional mandates for its use) primarily should go to paying down unfunded accrued liabilities in the state’s retirement systems, which not only would avert breaching the cap but also would relieve local governments from having to pay excess contributions into the state systems for defeasance of the UAL constitutionally mandated by 2029 that would free up money for other uses such as raising salaries.

The amended bill takes a small step towards that with an additional contribution to reducing the UAL by $185 million while excising anticipated new early childhood education spending of $51 million, new higher education expenditures of $57 million, reducing the size of elementary and secondary education pay raises by $46 million, and lopping off $159 million to Medicaid providers other than those involved in catering to disability services. This shifting apparently is in response to the fact that the Conservative Caucus with more than a third of House membership (all Republican) can block jacking up the expenditure limit.

Naturally, this fiscal prudence provoked cries of horror from leftist media and politicians. The Louisiana Illuminator, a web-based news site backed in part by extreme leftist funders, scarily suggested about how the reduction in the rate of growth of Medicaid might imperil some programs and particularly those related to disability services. Edwards, when informed about the House committee action, bleated that he “Didn’t know that education ceased to be a priority.”

Such responses range from the disingenuous to fabrication. HB 1 specifically tells the Department of Health not to touch waiver programs and supports for people with disabilities when assigning the cut – and keep in mind that this reduction represents less than one percent of the over $16 billion, or some 35 percent of the entire state’s spending, of the amount apportioned to medical vendors, or about 7 percent of the state’s portion. Consider as well that for the past few years the state consistently has spent less on Medicaid than budgeted – even as it badly underestimated the hit it would take because of Edwards’ triggering Medicaid expansion in 2016 – because of an extreme shortage of nursing providers that have left without services clients utilizing Medicaid waivers, thus saving the state money.


Edwards’ comment merely continued his history of contrafactual remarks, premised upon the belief that saying something untrue often enough will make people think it true, when the shortcomings of his policy preferences are exposed, as well as displayed his frustration at the deft countering of his agenda. Obviously, reducing the UAL burden on local education agencies leaving them more resources for things such as pay raises,  is anything but reducing education as a priority.

However, legislators can do better. The Freedom Caucus outlined how that is possible with its issuance of a “Recipe for Fiscal Responsibility” that proposes using surplus dollars to eliminate entirely the UAL, chunk money into the Budget Stabilization Fund to its limit, and then spend the remaining $285 million on infrastructure. The near-term impact would leave the state over $150 million more a year in discretionary funds, over $100 million more a year for schools and over $40 million a year for higher education, and allow local education agencies enough freed funding to pay for around $2,000 pay raises for teachers (although they would have to allocate additional dollars after 2029 to support these).

Ideas like this aren’t new, but the Freedom Caucus does a service in explaining the savings amounts and how they project over the next five years. In order for HB 1 to take on this form, it would have to jettison state-funded teacher pay raises as well as have changes made to capital expenditures in the companion bill HB 550.

Legislators should pursue this, although the timidity of legislative Republican leadership – apparently more interested in small capital outlay carveouts for themselves an allies squirreled away in HB 1 than in a true sea change from redistributionist mentality – likely means the current form of HB 1, in that form only because of Conservative Caucus leverage, is the best that can be done. Still, a quarter-loaf is better than none at all.



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