Analysis: Another year, another budget shortfall
BATON ROUGE, La. — In case Louisiana lawmakers needed a little sobering news to go with their Thanksgiving meals, their pre-holiday budget meeting gave them a snapshot of next year’s financial problems.
As usual, the budget gap’s a doozy, standing at nearly $1 billion.
This time around, however, lawmakers received the figure in a subdued manner, calmly absorbing the number, offering a few suggestions and moving on to the next topic.
At some point, they had to get used to the big, bad news. They’ve been slammed repeatedly in recent years with hefty budget gaps and deficits. Some they helped create through giant tax breaks, while others rolled in with the national recession.
Gov. Bobby Jindal’s budget advisers told lawmakers the state faces a $963 million gap between state government’s projected income and the costs to continue all its existing programs and services and account for inflationary growth in the 2013-14 budget year that begins July 1.
This year’s budget stands at $25 billion.
By comparison to other years, the latest budget shortfall could probably be seen as an improvement, at least slightly.
Before lawmakers and the governor’s office started crafting the 2009-10 budget, they faced a $1.7 billion shortfall. For the 2010-11 budget, it was a $1.1 billion gap. A year later, it was a $1.6 billion hole. When they started working on this year’s budget, they started with a nearly $900 million shortfall.
The $963 million hole falls on the better end of the spectrum in the context of the last five years.
That’s probably little consolation to lawmakers looking at what is likely to be new rounds of budget slashing to health care services for the poor, uninsured, disabled and elderly and to public colleges that already have been stripped of $427 million in state funding since 2008.
There are no easy cuts left to choose. Efficiencies and streamlining won’t be enough to close the hole. And Jindal steadfastly refuses tax hikes to fill the gap.
The governor must unveil his proposal for balancing next year’s budget to lawmakers by Feb. 22.
Any new reductions will come as colleges are struggling to cope with what they’ve already lost.
Any new slashing also will hit as the LSU health care system continues grappling with deep reductions this year that have shuttered services without any surety that the private health care community will pick up those patients or the medical training programs tied to them.
Lawmakers were aware the news would be grim before they received it.
At least one-quarter of the gap, about $250 million, involves the loss of one-time dollars that Jindal and lawmakers used to pay for continuing programs, nearly all of it for health care services. Those dollars are expected to fall away in the next fiscal year.
Barry Dusse, director of the governor’s Office of Planning and Budget, said more than one-third of the gap, about $355 million, was tied to a drop in federal Medicaid financing that also created a deficit this year after Congress made the cut.
Meanwhile, the cost of Louisiana’s free college scholarship program, called TOPS, will jump another $28 million next year on top of its $172 million current price tag, largely because of continuing tuition increases approved by lawmakers to help offset some of the state funding cuts to the schools.
To start addressing the hefty state budget gap, Jindal and lawmakers likely will consider shaving off at least $164 million of the shortfall by refusing to pay for inflationary increases, merit raises and education funding boosts that they haven’t covered in recent years.
Senate Finance Committee Chairman Jack Donahue, R-Mandeville, said the state can’t afford to pay for some of the inflationary growth, like pay hikes for state employees and increased retirement costs.
“We’re not going to be able to fund all those kinds of things,” he said.
There’s a lot more the state won’t be able to afford next year either.
By MELINDA DESLATTE
Melinda Deslatte covers the Louisiana Capitol for The Associated Press.