Louisiana Budget Takes Hit From Students, Prisoners

DALLAS — More students enrolled in Louisiana’s public schools and more state prisoners held in local jails are the two main factors in a potential fiscal 2010 budget shortfall of $145 million outlined Friday to lawmakers by Commissioner of Administration Angèle Davis.

However, Davis told the Joint Legislative Budget Committee that a transfer of surplus funds, an unexpected increase in revenue, and savings from a recent state general obligation bond sale would reduce the projected shortfall to approximately $68 million.

Davis said the budget numbers are preliminary. The amount of the supplemental legislative appropriation needed to cope with the shortfall will be clearer when the Revenue Estimating Committee releases a new revenue projection later this month.

“This is just an update,” she told the legislators. “We are not recommending action at this time.”

The biggest portion of the shortfall was attributed to an increase in the number of students enrolled in local public schools to 661,000, which was 10,000 higher than projected when the fiscal 2010 budget was prepared.

The state must distribute an additional $52 million this year to local districts based on their daily enrollment, Davis said. The districts with the largest increases in student population are in Bossier, Caddo, Calcasieu, Jefferson, Ouachita, New Orleans, and St. Bernard parishes.

“We have eight or nine districts that are reporting large influxes of students from private and parochial schools, and home schooling, due to economic reasons,” Davis said. Some hurricane-affected districts have seen enrollment increases as they restore grade levels, she added.

“This growth is causing us some concern,” Dais said. “We will continue monitoring the situation, and come back to you soon with some solutions.”

Part of the problem is that the state in effect pays twice for students who move from one district to another, she said.

The Department of Corrections needs more money because it underestimated its salary and overtime expenses by $6 million, Davis said, and will have to pay $23.7 million this year to house state prisoners in parish jails.

The state will be able to make up

$77 million of the shortfall with ­money from a variety of sources, including $18 ­million in hurricane insurance over-­collections and savings from the state’s October GO sale.

“We obtained a premium of $12.4 million on the debt sale because of our excellent bond ratings, and realized a saving of $1.6 million when we refinanced some 1998 bonds,” Davis said.

The state sold $200 million of GOs in October and refunded $125 million issued in 1998. Louisiana GOs are rated AA-minus by Fitch Ratings and Standard & Poor’s, and A1 by Moody’s Investors Service.

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