DALLAS — Louisiana state agencies have proposed $248 million of budget cuts for the remainder of fiscal 2010 as called for by Gov. Bobby Jindal as revenues continue to drop.
The list of cuts released Tuesday by Jindal’s office include reductions of $108 million by the Department of Health and Hospitals, $84 million of higher education spending, $14 million by the Department of Social Services, and $7.7 million by the executive department.
The Legislature earlier this year approved a $28.8 billion budget for fiscal 2010.
Jindal had requested that state agencies propose $247.9 million in budget reductions.
The call came after the Joint Legislative Committee on the Budget officially notified the governor on Dec. 18 that revenue would not be sufficient to finance the legislative allocations for fiscal 2010, which ends June 30.
With the notification from the committee, state law requires the governor to reduce the budget to fit the revenues within 30 days. However, he cannot reduce agency appropriations by more than 3% without legislative approval.
Jindal had asked departments and agencies to propose spending cuts amounting to 7.6% of their state general fund dollars or an overall 3% budget reduction by Jan. 8, but the proposed cuts were announced Tuesday.
Jindal said the budget cuts will result in a total reduction of less than 1% of the total means of financing for the state.
“We can either make things easier on government by raising taxes on Louisiana families, or we can work to make things easier for Louisiana families and simply force government to tighten its belt,” he said.
The cuts were required when the Louisiana Revenue Estimating Conference determined Dec. 18 that tax revenues were down by $197 million, mostly due to a significant drop in sales tax collections.
Greg Albrecht, chief economist for the Legislative Fiscal Office, said sales tax collections are expected to be down 14% from fiscal 2009.
“There’s just a massive retrenchment of spending for households and businesses,” Albrecht told the revenue conference. “People just aren’t spending.”
In addition, Commissioner of Administration Angèle Davis said the state must allocate another $52.6 million of aid to local school districts because 11,000 more students than expected are enrolled in public schools.
The Revenue Estimating Conference also adopted a new projection for fiscal 2011 that is $194 million lower than previously expected.
The revised projection calls for $1.3 billion less in revenue than in fiscal 2010, and a budget shortfall of $1.1 billion.
Jindal said his proposed executive budget for fiscal 2011 will be balanced through spending reductions rather than an increase in state taxes or tapping into the budget stabilization fund.
“We cannot expect to keep government spending the same and force the Louisiana people to pick up the government tab,” he said at a news conference. “We know we are facing a multiple-year budget challenge and that means we need to produce recurring savings that work to make government live within its means year after year.”
