SADOW: Landry Must Resist Warping of Standstill Budget

As currently constituted, Republican Gov. Jeff Landry’s most pressing budget task will be to resist government-as-usual, continue right-sizing state government, and fund priorities that improve quality of life in Louisiana.

When introduced last week as a “standstill” budget, spending rose by less than one percent. However, that figure masks significant shifts, primarily from two sources: the disappearance of pandemic-related grants and associated one-time spending, countered by the continued escalation of health care costs triggered by Medicaid expansion nearly a decade ago. Overall, while state funding sources fall by two percent, a federal funds increase of around 3.5 percent more than offsets that, raising the total adjusted budget by a few hundred million to $45 billion.

Lesser movement comes from shifting priorities. Not surprisingly, health care continues to absorb more dollars, although a few novel situations have emerged. A decline in collections from motor vehicles and state lands has placed additional demands on the general fund. On the spending side, juvenile justice and child welfare receive a boost, as does general public safety. And, contrary to claims by advocates that increasing summer food aid with federal dollars wouldn’t cost the state anything, the budget had to include additional state dollars to cover that expense.

But a major new discretionary expense is funding the educational savings accounts for middle-class-and-below families. Landry wants to fold the $43.4 million spent on the current lower-income voucher program into this initiative and then add $50 million to the top to cover a portion of the eligible families. Even with priority given to lower-income households and those with children with disabilities, anticipated demand makes likely that a kind of lottery system will have to sort out everything.

Given that general fund dollars won’t increase enough to cover that discretionary addition along with the other costs mandated, other things will have to be trimmed, with the Landry Administration prioritizing reductions in previous one-time expenses. Although relatively small, the most squawking about “cuts” came over one-time $7 million for domestic violence shelters.

This is a hallmark of the political left, where any expansion of a favored program–even if temporary–becomes unimpeachable, regardless of whether more pressing priorities exist or if better methods are available. It’s also a tactic to stall the disempowerment of government. Thus, expect Democrats in the Legislature to push for making the one-time shelter subsidy permanent at the expense of ESAs or other education improvement measures, such as differential pay—just as they did last year in pressuring Landry to buckle on the extra summer meal provision last year.

Landry can’t let that happen. In the case of the shelter funding, his administration can argue that because the money only locations in a quarter of parishes, local entities should bear the cost rather than all state taxpayers—especially since the $7 million, along with other dedicated funds, surpasses the federal grant money involved for shelters. And it’s not as if these local governments lack the funds; for instance, New Orleans could have put $2 million into the effort instead of subsidizing the placement of a grocery store in New Orleans East.

Of course, if Amendment 2 passes next month and is added to the Constitution, the budget will have to be restructured, as the rewrite would alter revenue and expenditure patterns. Regardless, Landry must ensure that efforts to rebalance state government—shifting power away from bureaucracies and back to the people—aren’t thwarted by business as usual, such as by diminishing ESA funding, particularly given that projected expenses are expected to outpace inflation over the next five years.

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