BRADENTON, Fla. — Louisiana legislators have been warned that there will be "significant cuts" at all state agencies when the executive budget for fiscal 2016 is released Feb. 27.
"Structural fixes to recurring deficiencies" will be in Gov. Bobby Jindal's recommended budget, Commissioner of Administration Kristy Nichols told the Joint Legislative Committee on the Budget Friday.
Nichols also warned that most of the budget cuts to cure this year's deficits will be among those proposed to deal with a projected $1.6 billion revenue shortfall in the next fiscal year.
The committee spent hours examining some of the $103.5 million in current year cuts proposed by Nichols to deal with the deficit this year because revenues have not come in as anticipated largely because of lower oil prices. The state had previously reduced expenses by $170.5 million after an earlier budget gap emerged.
Nichols said the latest round of reductions would require cutting $60.66 million from state agencies, and $42.84 million in "revenue opportunities" such as unused balances in certain funds. The cuts include some layoffs and dipping into funds set aside for raises.
"This is shameful," one committee member said. "The governor should lead by example and reduce his salary."
Mike Strain, the Commissioner of Agriculture and Forestry, said his agency was already at the "thin red line" because of prior reductions.
Strain said his agency cannot conduct all of the food and livestock inspections required now. New cuts will require additional layoffs of positions that are partly funded by the federal government.
He asked the committee to take another look at cuts to his agency, but a motion to make an adjustment failed.
While Nichols said the latest budget reductions would not impact transportation projects currently under way, Senator Robert Adley, R-Benton, accused her agency of making cumulative cutbacks in the Department of Transportation and Planning budget that exceeded her authority.
"We may disagree whether that was legal," Adley said. "You've taken it all from a tax that the people voted on."
The committee approved most of the cutbacks it reviewed.
Louisiana's ongoing structural budget problems led Moody's Investors Service and Standard & Poor's to change the state's credit outlook to negative from stable on Feb. 13.
"The state has relied repeatedly on one-time actions to achieve budget balance, reflecting an underlying structural imbalance between spending and revenues," said Moody's analyst Marcia Van Wagner.
According to the state's Legislative Fiscal Office, one-time funding averaged about $300 million or 5% of direct general fund spending from fiscal 2012 to 2014.
The $1 billion of one-time resources used in the current fiscal year's budget represents 18% of spending and will grow with the implementation of portions of the mid-year gap-closing program, Van Wagner said.
