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Governor’s Office Proposes Hopeful Budget With no Spending Cuts

Gov. John Bel Edwards proposed a new state budget with no spending cuts and a small pay raise for teachers. Photo credit: Sarah Gamard/LSU Manship School News Service

BATON ROUGE—The Edwards administration on Friday proposed a budget for fiscal 2022 that would use federal coronavirus aid to avoid cuts and provide additional funds to K-12 and higher education.

The $36.6 billion budget provides annual pay increases of $400 to K-12 public school teachers and $200 for K-12 support staff, a proposal that teachers unions immediately criticized as too small.

Jay Dardenne, the commissioner of administration, told legislators that the budget also includes a $56 million increase in funding for the state’s higher education system, $19.8 million of which is intended for faculty pay raises.

Besides the increase for higher education, the $186 million in total increases in spending include:

• Department of Education: $40 million for the teacher pay raises.

• TOPS scholarships and GO Grants for Louisiana college students: $23.2 million.

• Corrections and local housing for inmates: $59.4 million.

• Governor's Office of Homeland Security and Emergency Preparedness: $11.5 million.

• Net change in debt service: $14.3 million.

“We’re in a better place than many thought possible,” Edwards said Thursday. “This is some hopeful and bright news in a period of time that hasn’t been so bright.”

The lack of cuts is due—for the most part—to hundreds of millions in federal support. In addition to aid provided to healthcare and higher education, stimulus checks encouraged Louisianans to spend more and kept the state’s sales tax revenue from declining as much as expected.

The federal government will pay a larger share of Medicaid payments. States are responsible for a portion of the Medicaid funding each year, but because of the pandemic, Louisiana’s contribution is significantly less than in previous years.

"This is the thing that has come in and saved the day for the budget when you come right down to it,” said Dardenne.

The budget does not include any money that the state might receive from the new COVID-19 aid package that President Joe Biden has proposed. It also does not include any extra funding for early childhood education. Dardenne said he hoped the state would be able to finance that through some of the direct federal aid for education.

The governor’s proposal kicks off the budget process. The Legislature, which meets from April 12 to June 10, will make its own decisions about the budget. It needs to pass a balanced budget before the next fiscal year starts on June 1.

As of Friday, there was no change in the $293 million in excess revenue for fiscal year 2021.

Despite the impact of the coronavirus pandemic, seven named storms and an unprecedented ice storm, Dardenne is optimistic, saying despite the economic restraints, the state is headed in the right direction with the unemployment rate recovering. Moody’s Rating Agency recently assessed Louisiana’s outlook, citing careful fiscal management and adjusting the state’s standing from stable to positive.

While the governor’s proposal for fiscal year 2022 avoids cuts, the budget will be more strained in the following years as federal aid is expected to dissipate after this year.

In a Revenue Estimating Committee meeting in January, Legislative Chief Economist Greg Albrecht projected that employment and state revenue would not return to pre-pandemic levels until 2023 to 2024. He added that the state would have to open its economy. Otherwise, significant cuts would have to be made.

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