State still in budget hole even after special session
Published 7:00 am Friday, March 11, 2016
The final moments of the special legislative session were rough, State Rep. Malinda White said Thursday afternoon.
“Yesterday was unbelievable,” she said. “It came down to the last 10 minutes and I couldn’t tell you at that time what was happening, it was unbelievable.”
In the final minutes of a 25-day session meant to fill a $900 million budget hole in the current fiscal year, members of the House were left scrambling to approve bills handed back from the Senate.
“I knew the bills very, very well, but when they came back from the Senate last night, you couldn’t even review them before voting on them,” she said. “I jumped out of a plane once, and there was lots of adrenaline and it was kind of like that …. I can’t tell you how many bills went through in the last 10 minutes, but it was insane.”
The good news is, the budget hole is just about patched. According to the Baton Rouge Advocate, when the numbers from spending cuts and revenue hikes are added together, there is still a hole of $18 million to $38 million. It’s not yet clear what services if anything may be cut as a result of the shortfall, and some legislators are talking about another special session in order to deal with it.
Besides the immediate needs, the fixes agreed to during the special session come nowhere close to patching the expected budget shortfall of the next fiscal year, which begins in July. That deficit hole is projected to be $800 million.
The regular legislative session will kick off on Monday, although by state law, lawmakers cannot make any budget adjustments while in regular session. Only in every other year may legislators address the state’s tax code in regular session.
White said legislators tried to pass more taxes, but were rebuffed. For instance, Lafayette Sen. Page Cortez proposed amending Rep. White’s vendor compensation bill to remove the tax-exempt status on Mardi Gras beads, but his efforts were unsuccessful.
Meanwhile, White said the Louisiana Association of Business and Industry were trying to get legislators to up the sales tax hike to 2 cents, instead of the proposed 1-cent increase. White said she opposed raising taxes on working families.
“We said you know what, businesses have to pay their share too,” she said. “It can’t just be on the backs of the poor and the middle class and of everyone.”
LABI’s suggestion went nowhere, and White said some businesses will pay more.
“Businesses did take some hits,” she said. “They had to share in this because quite frankly they’ve been given more than they’d been paying in.”
One of the expenditures that businesses had been given was a payout when they paid their monthly business taxes early. The state had been paying money to businesses that sent in early receipts as a way to compensate businesses for their accounting personnel, but White said these days most of the accounting is automated.
White had introduced a vendor compensation bill that would have capped payouts to businesses that pay less than $1,000 in taxes each month. White said her bill would save the state money and only hit businesses that do more than $32 million in sales each year.
White said her bill didn’t make it through the process unscathed, and along the way it was amended to cap the payouts to businesses that pay $1,500 per month in taxes. White said the state payouts still put Louisiana behind other states in terms of corporate rewards, but at least there’s a cap now.
“We’re far behind the rest of the pack as far as doing something about it,” she said. “We now have a cap on it. Walmart was getting millions of dollars to use what they already have in place, an automated system.”
White praised her fellow lawmakers on both sides of the isle who were willing to compromise and vote for expense cuts, as well as tax hikes. White said there was a small handful of legislators that voted against all tax hikes.
“I call them the ‘no’ caucus,” she said. “They added no value to what we did in the session. … (They) just wasted your time and everybody’s time. If we all voted no, we’d be in a hell of a mess today. As of 6 p.m. last night, there would be major layoffs.”
White described the state’s financial mess as dire, and she warned that if there had not been tough decisions and compromises, Washington Parish would have been hit hard — possibly with the closure of the Our Lady of the Angels Hospital. Gov. Edwards specifically mentioned the hospital earlier this year, and he said if the legislature didn’t patch the budget hole this year, that hospital could close.
“For me it was a matter of life and death,” she said. “We can’t afford to lose our hospital.”
However, just because the hospital is safe, she warned that the state may still cut some medical services to shore up its budget before the end of the fiscal year.
“Louisiana faces major cuts to health care and higher education,” she wrote, in a statement.