The Republican-controlled House of Representatives on Tuesday approved a $30 billion state budget and supplemental spending bills that utilize nearly $1 billion in federal funds to make up for revenues lost because of the coronavirus, sparing most state agencies and programs from deep cuts.
The bills are nearly identical to the spending recommendations made by Gov. John Bel Edwards earlier this month and were approved by the full House after a mere two hours of discussion. They maintain current funding levels for K-12 schools, TOPS Scholarships and social services.
The plans use a combined $991 million from the CARES Act, $190 million in direct federal aid to the state’s Medicaid program, and $90 million from the state’s budget stabilization fund to make ends meet.
State lawmakers and Edwards entered the legislative session with expectations of a $500 million surplus and hoped to raise K-12 teacher salaries, increase spending for early childhood education, and chip away at a backlog of infrastructure projects. But those hopes were dashed when the coronavirus-induced economic downturn and sharp decline in oil prices prompted state economists to remove $1 billion from their forecast of state revenue in the coming fiscal year.
The state’s budget architects got creative, balancing the budget by routing large portions of federal coronavirus relief payments to payroll at state agencies tangentially involved in coronavirus mitigation.
Jay Dardenne, the commissioner of administration and Edwards’ top budget advisor, maintains that the state’s use of federal money was appropriate.
“We feel confident that we are staying within the guardrails that have been given for the use of the money,” Dardenne said when the House Appropriation Committee discussed the budget on Thursday. “It's unprecedented to have money like this forked over by the federal government.”
Some GOP lawmakers worry that the state’s overreliance on one-time federal funds will set the state up for deep cuts in the fiscal year that begins July 1, 2021.
They argue that economists are downplaying the potential long-term effects the coronavirus will have on state revenue, and have requested that Edwards’ budget advisors draft a plan for potential mid-year budget cuts.
State economists, who earlier this month reduced their official revenue projection for the coming fiscal year by $1 billion, expect state revenues to make up about $700 million of that loss in the following fiscal year.
The budget bills are headed to the Senate, but the upper chamber is unlikely to sign off before the regular session ends on Monday. House Speaker Clay Schexnayder and Senate President Page Cortez have called for a special session to begin at 6:01 p.m. June 1, immediately after the regular session comes to a close.