DALLAS - Louisiana legislators on Friday approved without changes the $341 million of current-year budget cuts proposed by Gov. Bobby Jindal to deal with declines in state revenue resulting from steep drops in energy prices.
The cuts in the $9.4 billion general fund budget for fiscal 2009 were first outlined by Jindal on Dec. 30. He issued an executive order to enact $162.5 million of the cuts, the maximum provided for under the state constitution, which allows the governor to trim general fund spending by 3%.
The Joint Legislative Committee on the Budget approved the remaining $178.4 million in cuts proposed by Jindal. Legislators quizzed commissioner of administration Angèle Davis, the governor's chief financial officer, during the seven-hour committee meeting and questioned some of the cuts, but made no changes.
The joint committee consists of members of the House Committee on Appropriations and the Senate Finance Committee, and the chairs of the House Ways and Means Committee and the Senate Revenue and Fiscal Affairs Committee.
Davis told the budget committee that the administration is also working on resolving a potential $2 billion budget shortfall in fiscal 2010.
"The goal is for the state to do more with less," she said. "We don't have a choice. Clearly, the amount of savings in this plan, and much more, will have to be recurring in fiscal 2010 if we are to balance the budget."
Davis said the fiscal 2009 budget cuts consist of specific reductions in operating expenses, a hiring freeze, delays in new programs and services, and the elimination of low-performing programs. Changes included limiting many Medicaid recipients to five prescriptions per month and reducing funding for legislative projects by 5%.
The governor's proposals also included $40.5 million in debt service savings realized by delaying three planned bond issues.
Louisiana is not unique in its tight budget situation, Davis noted. "No state is immune to the national economic downturn," she said. "
Davis cited a report from the Center for Budget and Policy Priorities, which said at least 44 states are facing shortfalls in their budgets for this year and at least 38 states anticipate deficits for fiscal year 2010 and beyond.
Fourteen states have already raised taxes or taken other revenue-raising measures to make up their shortfalls, Davis said, but that was not an option for Louisiana.
"The governor will not consider a tax increase, and he rejected proposals for across-the-board cuts, which just thins the soup," she said.
Jindal met over the weekend with five of the state's nine congressional delegates to outline nine priorities for 2009.
He said the state would seek an acceleration of its oil and gas royalties from expanded drilling in federal waters in the Gulf of Mexico.
The money is expected to total as much as $600 million a year but is not scheduled to flow to the state until 2017. Jindal said getting the money quicker would allow Louisiana to finance important hurricane protection and coastal protection projects.
The Louisiana Coastal Protection and Restoration Funding Corp. was established in 2007 with authority to issue bonds supported by 100% of the state's offshore oil and gas royalties.
Louisiana's general obligation bond debt is rated A-plus by Standard & Poor's and Fitch, and A1 by Moody's Investors Service.
