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Friday, January 27, 2017

Edwards makes case to fix $304M mid-year budget shortfall

Posted By on Fri, Jan 27, 2017 at 4:05 PM

click to enlarge Gov. John Bel Edwards and his fiscal staff discuss the state’s fiscal shortfall Friday with the joint legislative Committee on the Budget. - SAM KARLIN
  • SAM KARLIN
  • Gov. John Bel Edwards and his fiscal staff discuss the state’s fiscal shortfall Friday with the joint legislative Committee on the Budget.

Gov. John Bel Edwards made his case Jan. 27 for combining the state’s “rainy day fund” and spending cuts to fix a $304 million mid-year budget shortfall, warning lawmakers that funding reductions will be “deep” and “painful” no matter what.

Edwards will unveil a specific plan to address the funding gap Feb. 6, but today he said he wants to protect K-12 education, the Department of Corrections and Department of Children and Family Services from budget cuts.

He will call the Legislature to a special session from Feb. 13-23 specifically to address the deficit.

“It’s an understatement to say there just aren’t any painless options left for us,” Edwards said. “It’s storming ... The idea that under these circumstances we wouldn’t use the rainy day fund for its express purpose doesn’t make any sense to me.”

The so-called rainy day fund is money set aside for unforeseen emergencies.

It remains unclear, however, whether lawmakers will agree to use that emergency fund — which would reduce the shortfall to $185 million — or if they will reject the governor’s plan and make their own cuts. Doing so would require them to make deeper reductions to agencies, and Edwards pointed out most have been cut repeatedly in recent years.

In a lengthy Q&A with legislators on the Joint Legislative Committee on the Budget, Edwards sparred with some Republicans about how to best fix the shortfall. House GOP Chair Rep. Lance Harris, R-Alexandria, has opposed Edwards’ designs on the rainy-day fund to lessen the cuts.

Harris also took issue with the budget of the Department of Health, which he said has grown too quickly over the years, and suggested state spending is too high. Edwards countered that the Legislature had opportunities to make more cuts beyond what he recommended last year and largely failed to do so.

The governor and the committee currently have the authority to cut enough spending to plug the shortfall, but Edwards said he will call a special session to open up more areas of the budget.

In that call, the governor will include fee increases — the list of areas lawmakers can address during the special session — at the request of some legislators. But he reiterated he is only asking for spending reductions. The Legislature is prohibited from debating any proposed legislation outside of the topic perimeters set by the governor.

The Legislature is schedule to go into an eight-week regular session in April. It faces a $1.2 billion deficit cliff for the coming fiscal year when temporary taxes, enacted last spring, expire in 2018.

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