Proposed Louisiana budget includes at least $650 million with no specific purpose

Conservative lawmakers concerned with increase in recurring spending

By: - April 23, 2022 6:00 am
Louisiana House of Representatives

The $44 billion spending plan the House overwhelmingly approved places at least $600 million in three state funds without specific instructions on how the money should be used. (Greg LaRose/Louisiana Illuminator)

The Louisiana House moved a budget package Thursday that gives K-12 public teachers and university faculty members pay raises. It also leaves hundreds of millions of public dollars with no specific spending purpose.

The $44 billion spending plan the House overwhelmingly approved leaves at least $650 million across three different funds without specific instructions on how the money should be used. House leaders said they are still in discussion with the Senate — which starts working on the budget next week — over where those dollars will go. Louisiana’s spending plan must be finalized by the end of June. 

Most of the undesignated money appears to be destined for transportation projects. Some sticking points for lawmakers include how much should be allocated to a new Mississippi River bridge in the Baton Rouge area, the replacement of the Interstate 10 bridge in Lake Charles and improvements to Interstate 49, which officials hope to eventually extend from Lafayette to New Orleans.

Approximately $152 million put in a Capital Outlay Savings Fund, which hasn’t been assigned a purpose yet, might also be used to cover construction costs overruns from existing state building projects, said House Appropriations Committee Chairman Jerome Zeringue, R-Houma.  Inflation and unreliable supply chains have driven up the price of construction beyond what was expected. 

Louisiana has an unprecedented amount of money to spend this fiscal cycle, in part thanks to federal support for the COVID-19 pandemic and hurricane recovery efforts. There’s more than $3 billion in additional money between state and federal funds, and more revenue could be materialize next month when the state updates its fiscal projections.

Gov. John Bel Edwards and the Republican-led House have agreed on some spending priorities. Their budget proposals include paying off outstanding debt, including $400 million owed to the federal government for the New Orleans-area hurricane protection system built after Hurricane Katrina. They both put $100 million toward the I-10 bridge project in Lake Charles, though lawmakers could increase that allocation.

The House budget plan also puts funding toward the state unemployment trust fund ($500 million) and ailing water and sewerage systems ($450 million) like Edwards suggested, though less than he had recommended for those purposes. 

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Where the governor and House members have primarily differed is funding for a new Mississippi River bridge in the Baton Rouge area. 

Edwards had proposed setting aside $500 million for the project, but lawmakers have balked at the suggestion. The House budget plan doesn’t commit any excess state or federal funding to the bridge, though legislative leaders haven’t suggested alternative plans for most of that money yet either. The House siphoned off $100 million of the $500 million bridge allocation for road and bridge maintenance and left the remaining $400 million unassigned.   

House Speaker Clay Schexnayder, R-Gonzales, said Wednesday he wants to see a final site for the Baton Rouge-area bridge before he devotes as much as $400 million to the project.

“I don’t want [the money] sitting there while we are waiting for a decision on a site,” Schexnayder said. “Constituents love to see dirt moving and to have projects done.”

Edwards has said repeatedly it’s unrealistic to expect a bridge site to be picked by the time the state budget is finalized in June. The federal government requires environmental studies of more than one site for a project of that scale, and they can’t be completed in a matter of weeks. 

Edwards said Thursday setting aside $500 million would help speed up the $2.5 billion bridge project in other ways. The federal government and private investors will take the bridge more seriously if the state shows it is willing to put up a significant amount of money first.

Schexnayder said he might be interested in putting some of the $500 million into upgrading Louisiana Highway 1 and LA 30 on each side of the Mississippi River in anticipation of the bridge. Those highways are expected to feed the bridge when it opens and Highway 30 cuts through Gonzales, which Schexnayder represents. 

Constituents love to see dirt moving and to have projects done.

– House Speaker Clay Schexnayder

Senate President Page Cortez, R-Lafayette, said what he wants to do with the state’s unallocated funding, including the $400 million that would have gone to the bridge, will depend on another piece of legislation.

Cortez wants to see what happens with Senate Bill 266, sponsored by Sen. Rick Ward, R-Port Allen. It could allow more money to be diverted annually from a state fund that pays for higher education, health care services and prisons to a fund for a few large transportation projects, including the new Mississippi River bridge project. Ward’s bill passed out of the Senate this week and needs to be considered by the House.

The House also rejected Edwards plan to spend $26 million on increasing supplemental pay for local law enforcement officials and firefighters by $100 per month. House leaders said compensation for local government workers should be primarily a local government responsibility and not the responsibility of state government. The Senate, however, has already voted in favor of the extra $100 law enforcement compensation through legislation, and will likely add the spending back into the budget plan later in the session.

If the state’s revenue projections next month are moved higher, giving officials more money to spend, Edwards said he would like to increase teachers’ pay further. The budget plan currently contains a $1,500 annual raise, but if an extra $25 million becomes available, he would like to bump it up to $2,000. 

The House inserted an amendment into the budget proposal that could make it harder for the governor to do that. Rep. Brett Geymann, R-Lake Charles, added language that would prohibit any new money recognized as part of next month’s revenue projections from being used for an ongoing expense like teacher raises.

A handful of conservative Republicans raised concerns that Louisiana is building more recurring spending into state budget plans of the future. In addition to permanently raising teacher and university faculty salaries, the House budget plan also provides more funding for services for people with disabilities.

Louisiana is expected to hit a financial shortfall in 2025, which might make it difficult to pay for the services receiving more money now. Louisiana’s sales tax rate is scheduled to drop by 0.45% that year, which will cut funding for K-12 schools, higher education, health care and prisons by hundreds of millions of dollars annually. Lawmakers also voted last year to permanently divert money from the state fund that pays for health care and higher education to transportation needs.

The increase in state spending obligations inserted into the budget this year, combined with the scheduled drop-off in revenue over the next few years, could exacerbate the state budget gap that is already expected.

 

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Julie O'Donoghue
Julie O'Donoghue

Julie O’Donoghue is a senior reporter for the Louisiana Illuminator and producer of the Louisiana Illuminator podcast. She’s received awards from the Virginia Press Association and Louisiana-Mississippi Associated Press. Julie covered state government and politics for NOLA.com | The Times-Picayune for six years. She’s also covered government and politics in Missouri, Virginia and Washington D.C. Julie is a proud D.C. native and Washington Capitals hockey fan. She and her partner, Jed, live in Baton Rouge. She has two stepchildren, Quinn and Steven.

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