Louisiana Gov. Bobby Jindal said he would support legislation this year that would allow him to cut state agency budgets by up to 10% — instead of the 5% he's currently allowed — if revenue falls below expectations.
Jindal has asked the Legislature twice for the ability to reduce spending by 10% in a year without legislative approval, but neither measure passed.
The Republican governor said Monday at a news conference in Lafayette that the proposal would help protect higher education and Medicaid from bearing the burden when cuts are needed. Over the past two fiscal years, the state's higher education budget has absorbed $315 million of cuts, and Medicaid funding has been reduced by $264 million.
Because so much state revenue flows into the dedicated funds, Jindal said, budget reductions fall heaviest on education and health care.
Other legislation the governor supports would divert the interest earned by statutorily dedicated funds to higher education and health care and would eliminate all dedicated funds except for those authorized under the state constitution.
The 180 dedicated funds earned $153.9 million of interest in fiscal 2010. The funds total $4.8 billion and must be allocated to specific areas.
Jindal said the measures would not go into effect in time to help reduce the expected $1.6 billion revenue shortfall for fiscal 2011, though they would be helpful later.
"These budget flexibility bills are an important way to free up funds that are currently locked away, while the areas of higher education and health care are left vulnerable to reductions in tough budget years," he said.
LSU System president John Lombardi said at the news conference that the legislature needs "flexibility to make strategic adjustments throughout the state budget to spread and minimize the impact of revenue reductions on all of the state's public services."