Analysis: Wish Lists Are Out Of Step With LA Budget Reality

BATON ROUGE (AP) — With Louisiana's incoming governor throwing out the budgetary limits used by Gov. Bobby Jindal for his two terms in office, ideas for new spending are piling up after years of budget cuts.

         Those lengthy wish lists — seeking to steer more money to public colleges, early childhood education and transportation projects — ignore Louisiana's stark budget realities.

         While Gov.-elect John Bel Edwards is willing to support tax changes that will drum up new dollars for the state treasury, he'll be struggling just to keep up the current spending levels for state operations and services.

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         People touting wish lists don't seem to grasp or aren't willing to acknowledge the depth of the state's financial woes. Program expansions, restoration of cuts and new initiatives likely will have to wait until — and if — Edwards and lawmakers can right the sinking ship that is the state budget.

         The Democratic governor-elect says Louisiana needs to generate more money to pay for government programs. He's willing to talk about scaling back tax breaks to keep more dollars in state coffers. And he's suggested he'd consider other changes to help bolster state income.

         That's good news for those who believe the state cut enough spending over the last eight years under Jindal, a Republican who refused to support anything he considered a net tax increase and who patched together budgets with short-term fixes rather than by matching expenses to long-term revenue projections.

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         But that doesn't suddenly mean Louisiana's going to be flush with cash.

         As the term-limited Jindal exits the governor's office Jan. 11, he's leaving behind deep budget difficulties for Edwards and the lawmakers returning for a new term. Edwards is inheriting state financing gaps topping $200 million for this year's $25 billion budget and a more than $1 billion shortfall on the horizon for next year.

         Starting with this year, the state's TOPS free college tuition program has $19 million less than its students are expected to need to fully cover their tuition costs.

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         A heftier gap exists in the state's Medicaid program, estimated at as much as $530 million. Without a fix, the health department estimates it would run out of money to pay doctors, hospitals and other Medicaid providers in May.

         Jindal and lawmakers didn't put enough money into this year's Medicaid budget to cover increases in enrollment and in costs of items, like prescription drugs. To close the immediate Medicaid gap before the fiscal year ends June 30 would cost an estimated $191 million in state financing, to draw down the remaining portion in federal matching dollars.

         For even more grim news, there's the continuing slide in oil prices, which directly hit the state's severance tax revenues and mineral royalties, but also impact industries tied to oil, causing a ripple effect of declines in corporate tax and sales tax collections.

         Louisiana's current income estimates are pegged to a $48 per barrel oil price, above where prices have been hovering recently. If prices don't rebound, the state's revenue projections on which this year's budget is built will take another hit.

         Once they dig out of this year's troubles, Edwards and lawmakers face more on the horizon, estimates that they need as much as $1 billion to simply continue operating the current government programs and services without cuts.

         That seems to leave little room for the wish lists. People keep asking anyway.

         Louisiana's top higher education board requested to nearly double public colleges' state financing in next year's state budget, boosting the money that flows to campuses by nearly $636 million.

         Early childhood education supporters are seeking $200 million over several years to expand educational options for young children, particularly those in poverty, who don't get the proper foundation before they enter kindergarten.

         Others are talking about new road projects, money for a train to run between Baton Rouge and New Orleans and a list of infrastructure wants and needs.

         Maybe they should let the state's incoming governor and state lawmakers work on the short-term financial problems first. That's difficult enough.

         – by AP Reporter Melinda Deslatte



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