The Senate Finance Committee Tuesday moved forward with a resolution, primarily for the benefit of their wavering House colleagues, that would employ $119 million of the rainy day fund as part of Gov. John Bel Edwards’ budget proposal to close a $304 revenue shortfall.
House Republicans have expressed reluctance to do that, instead seeking additional budget cutbacks.
The resolution, sponsored by Senate President John Alario, R-Westwego, and six members of Senate leadership was moved to the Senate floor without action to expedite House movement on the matter. Earlier in the day, House Republicans and Edwards met to thrash out differences.
“I am very concerned if we don’t get into using some of the rainy day fund some of those programs that are much needed and much used. . . may very well get hurt,” Alario said. “The clock is running.”
Senate action is limited to helping advance Edwards’ proposal, as revenue bills must originate in the House. The House Appropriations Committee was scheduled to meet Tuesday afternoon, but cancelled in lieu of meeting with Edwards.
Commissioner of Administration Jay Dardenne told the Finance Committee consideration is being given to funding alternatives, but the administration is pursuing its original proposal.
“We’re presenting to you a solution and one we think is reasonable and appropriate under the circumstances, one that does not seek to make reductions in areas that we all have said are our top priorities in Louisiana,” Dardenne said.
Members of the Republican dominated House have pushed back against use of the rainy day fund, calling instead for additional cuts. Rep. Raymond Garofalo, R-Chalmette, said he would prefer to forego tapping the savings account in light of next year’s impending deficit where it may be needed even more.
The fund’s balance has declined from an all-time high of $853.7 million in 2009 to $359.96 million because of regular drawdowns. If Edwards’ proposal is approved, the state would utilize one-third of the fund’s current balance to help fill the deficit, noted Dardenne.
While many refer to the rainy day fund as an implied separate savings account, statutorily the money actually is co-mingled with general fund investments, according to Chief Treasury Investment Officer John Broussard. It does require certain criteria to be appropriated, however.
Compromise is possible, but there are legislators willing to wait and let the deficit roll over until the next year if the administration pushes too hard, Garofalo warned just after the special legislative session opened Monday night.
Dardenne said if legislators are opposed to tapping reserve dollars they need to put forth a list of agencies and departments they are willing to cut.
House leadership has pointed out, however, that they also could do nothing, adjourn and force the governor to do the cutting. The special session, which was called by Edwards, must adjourn by next Wednesday at midnight.
There is optimism in some quarters that a funding measure, House Bill 1, will move through the House and into the Senate by Friday.
Senate Finance members mostly were supportive of Alario’s move, but reservations remain. Sen. Sharon Hewitt, R-Chalmette, said it’s difficult for legislators to make well-informed recommendations with little knowledge of each agency’s business.
“That keeps me up at night, by the way. I don’t want to be the only one awake.”