DALLAS - Louisiana will accept up to $2.5 billion of federal stimulus funds over the next two years, but Gov. Bobby Jindal's administration is reviewing another $1.5 billion allocated to the state before deciding whether to use the available funds.
Commissioner of Administration Angèle Davis, the governor's chief budget officer, told the Joint Legislative Committee on the Budget on Wednesday that the state could be eligible for between $3.5 billion and $4 billion from the stimulus package approved by Congress in February.
Davis said the state would accept $2.4 billion for use in fiscal years 2010 and 2011, but would not commit to taking the remaining funds until the restrictions on using the money are clarified. A meeting at the White House next week, chaired by Vice President Joe Biden, should provide states with additional information on the certification process for the $787 billion federal stimulus program, she said.
"We are reviewing these funds very carefully," Davis said. "It is important to note that the federal stimulus dollars will not solve our deficit problem in fiscal 2010. There will still need to be significant general fund reductions in the executive budget."
Louisiana's revenue shortfall, caused by declining economic activity and lower-than-expected oil and gas prices, is estimated at $1.75 billion in fiscal 2010.
Davis said aspects of the stimulus bill still under review would provide the state with funds earmarked for energy efficiency, public transportation, and food stamp assistance.
The state has until April 3 to notify the federal government which portions of the stimulus package will be accepted, she said.
Jindal will deliver an executive state budget for fiscal 2010 to the committee on March 13 that incorporates the federal stimulus money.
Davis said the governor has agreed to accept $950 million to $1.1 billion for Medicaid and other health care, $580 million for public and higher education, $430 million for roads and transportation, $129 million for budget stabilization, and $24 million for child support enforcement.
Jindal said last week that the state would take $68 million of stimulus funds over two years to provide a $25-per-week increase in unemployment benefits. The governor rejected $98 million for additional unemployment benefits that he said would require higher state taxes on employers.
The federal stimulus funds will be incorporated into the state budget over the next two years. State agencies will prepare transition plans on how to proceed when those funds are no longer available in fiscal 2012, Davis said.
"We have to realize that these federal dollars are not permanent," Davis said. "It will not be available for new programs or the addition of new permanent employees."
The joint budget committee approved seeking federal approval for $192.2 million of state highway projects financed with the stimulus funds, but delayed a decision on projects valued at $133 million.
Senate President Joel Chaisson II, D-Destrehan, said he wants to see Jindal's proposal for spending the state's $865 million budget surplus from fiscal 2008 before approving the entire package. Some projects not eligible for federal funding could be financed through the surplus.
Approving most of the projects will allow the state to meet the deadline of obligating at least half of its transportation funding by mid-June. The remainder must be obligated by February 2010.
The committee also approved $118 million of the stimulus money for local road projects.
