State deficit plans: Cut list devised for possible gap

BATON ROUGE — Louisiana’s safety-net hospitals, public colleges and local sheriffs housing state prisoners could face cuts, while the opening of Louisiana’s new youth prison facility could be delayed, if the state’s income projections come up short this year.

Gov. John Bel Edwards’ administration presented its first ideas for up to $60 million in cuts it would suggest if Louisiana faces a midyear deficit. The three-page spreadsheet was sent to lawmakers with a caveat the proposals could change — but agencies are planning, just in case.

“These are not cuts that we would ever want to make,” Commissioner of Administration Jay Dardenne, Edwards’ budget adviser, told lawmakers. “We hope we don’t get to this point.”

Why The Planning?

Republican lawmakers, including House GOP leaders, worry the state operating budget for the financial year that began July 1 spends too much money and could set Louisiana up for another round of midyear cuts.

When revenues come up short of the income forecast, agencies must slash spending, a situation that has repeatedly occurred over the past nine years. Some Republicans believe that will happen again, but the governor and a majority of lawmakers refused to reduce spending in anticipation of that possibility.

Instead, lawmakers asked Dardenne to devise a plan for holding back $60 million from state agencies in case the revenue forecast is too optimistic. Dardenne will submit a monthly report to the joint House and Senate budget committee on the plan. He unveiled the first report to the committee Friday, with a follow-up memo sent this week.

On The Chopping Block

The health department would lose $20.5 million of its state financing, with a $17.5 million cut levied on private operators of the state-owned charity hospitals and clinics. The reduction would balloon to more than $66 million with lost federal matching dollars and would represent a 4 percent hit.

Public colleges, which had escaped cuts for the first time in years, would lose $12.7 million, though the TOPS college tuition program would be spared. LSU spokesman Jason Droddy said the flagship campus in Baton Rouge will delay some expenses such as maintenance projects and hiring plans, to ready for the possibility that LSU might take its share.

“We remain hopeful that this reduction would not occur and we would be able to make those investments which are important to our national competitiveness,” Droddy said.

Also on the Edwards administration list, one month’s payment to sheriffs for housing state inmates in their parish jails wouldn’t be made this year to save $14 million. The Office of Juvenile Justice would again stall opening the Acadiana Center for Youth facility in Bunkie, to trim more than $5 million.

New Orleans Rep. Gary Carter, a Democrat, heavily objected to a $761,000 cut to senior centers in the deficit avoidance plan, which could force centers in his area to temporarily close if enacted.
“Come up with another plan, because this does not work,” Carter told Dardenne.

The Caveats

Dardenne stressed the cuts aren’t currently being made and the state won’t know until later in the year if any reductions are required. Barry Dusse, director of the governor’s Office of Planning and Budget, sent a follow-up letter to lawmakers Monday stressing the point.

“The plan is subject to change from one month to the next. It will not be finalized unless and until a deficit occurs,” Dusse wrote. “At this time, the budgets of the agencies involved will not be reduced. The agencies are expected to hold and not expend these dollars” for now.

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