It’s a new year, but Louisiana is facing the same old problems with budget shortfalls. Rep. Gene Reynolds, D-Minden, said the state is facing $1.1 billion in cuts due to a “fiscal cliff” on the horizon.
Reynolds took to Facebook Thursday to address the “cliff” and efforts to mitigate it.
“This situation, according to staff, was actually created in 2008, when the legislature repealed the income tax portion of the ‘Stelly Plan’ and left the sales tax exemptions in place which caused a decrease in revenue of about 800 million dollars,” Reynolds said. “This along with big tax exemptions or tax cuts for certain groups over the last 10 years has caused the situation we are in today.”
During the Gov. Bobby Jindal administration, one-time money, fund sweeps of federal monies, and massive cuts to higher education and other funds were used to supposedly balance the budget, Reynolds said. However, the federal monies have to be repaid and the shortfall was merely moved to the next fiscal year.
“I am not putting him or his administration down, I guess he did what he thought was best,” he said.” However we now are faced with permanently solving the problem.”
Since the election of Gov. John Bel Edwards in 2015, the state passed a “clean penny” sales tax to temporarily fill holes in the budget until a permanent solution could be reached. But, time is running out as the “clean penny” will expire July 1.
“We either replace the $1 billion or cut $1 billion or use a combination of the two,” Reynolds said. “Ideally tax reform is needed but is a tough sell.”
Multiple plans have been discussed, but the legislature is not unified behind any at this point. “As of today in the House we do not have 70 votes on any fix,” Reynolds said.
Reynolds is headed to Baton Rouge Monday to attempt to work out a compromise with House leadership, he said. The first deadline comes Jan. 15 when the Edwards administration releases its budget for consideration.
“They have to propose a budget with the available funds and that is balanced,” he said. “The House must pass a budget — and a budget with $1.1 billion in cuts will not pass.”
Reynolds said there will be a lot of “political posturing” about the budget in the coming days. “We need to make decisions based on facts not political talking points,” he said.