Senators shut down House leader’s talk of deficit spending

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BATON ROUGE — The leader of the House budget committee provoked harsh reactions Monday from state senators when he suggested Louisiana may have to deficit spend to get through the budget year.

House Appropriations Chairman Cameron Henry, R-Metairie, told the Senate Finance Committee the state may be rolling some of the budget shortfall to next year, rather than closing the gap by June 30.

Senators said such a decision would damage public trust, harm Louisiana’s credit rating and worsen next year’s financial problems. Gov. John Bel Edwards’ chief budget adviser, Jay Dardenne, said he thinks the idea would violate Louisiana’s constitution, which requires the state to have a balanced budget and lays out parameters for closing deficits.

Senate President John Alario, R-Westwego, chastised Henry, saying deficit spending would be a “terrible way to conduct the people’s business.”

“To even put that on the table gives me a stomach ache,” Alario said.

The House passed a mix of tax increases and cuts that don’t go far enough to fully rebalance this year’s budget. Senators want to raise more revenue. House Republicans so far have been resistant to boost taxes further, but they also haven’t said where they’d cut any additional spending to fill the remaining gap.
Senators are constrained because most tax legislation must begin in the House.

Lawmakers in the House postponed debates Monday on alcohol and cigarette tax hikes, along with a lengthy list of other tax measures. The only tax proposal to win House passage Monday was a car rental tax, estimated to raise about $800,000 for this year’s budget — nowhere close to offsetting the outstanding shortfall.

House Speaker Taylor Barras, R-New Iberia, said his chamber was waiting for clues about what cuts senators are willing to support, “so we end up with an idea of where we need to balance.”

Time is running short. The special legislative session must end March 9.

Alario estimates the proposals approved by the House leave the state as much as $200 million short of balancing this year’s budget, either through cuts or tax hikes. In Monday’s Finance Committee hearing, he also questioned some of the cuts proposed in the House package, and whether the House really understood the implications.

The House approved a $106 million package of cuts that is $76 million larger than the Democratic governor sought, but Henry acknowledged Monday that some of the cuts may damage programs and services.

“We’re going to need some additional revenues to finish this off,” Alario told Henry.

Henry replied: “I think we’re still going to have a deficit,” and then he talked of “rolling some of this to next year.”

Sen. Eric LaFleur, chairman of the Finance Committee, said Henry sounded like a congressman, but he noted Washington “can print money. We can’t.”

Alario, a mild-mannered leader who rarely rebukes any legislator publicly, said rolling a deficit into next
year would shirk the responsibility lawmakers have to their constituents.

“We have an opportunity to fix that, and I’m suggesting to you that we do that,” he said.

Henry said he wasn’t recommending that lawmakers should avoid fixing the entire state budget gap for this year, but he said it might happen if lawmakers can’t agree on where to cut and where to raise taxes.

LaFleur told Henry: “That’s not an option.”

“I’m blissfully happy with that answer,” Henry replied.

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