Louisiana Gov. Bobby Jindal Seeks $24.6B Budget
BRADENTON, Fla. Facing a $1.6 billion deficit in fiscal 2016, Louisiana Gov. Bobby Jindal has recommended a $24.6 billion state budget and suggested increasing revenue through the issuance of tobacco bonds and using public-private partnerships.
Jindal’s total budget is a decrease of $1.2 billion or 4.7% compared to the current year. The general fund portion is $9.04 billion, an increase of 308.8 million. This is his last budget in office.
“The budget does not place additional burdens on our citizens by raising taxes,” Administration Commissioner Kristy Nichols told the Joint Legislative Committee on the Budget Feb. 27.
Nichols said the budget uses $300 million in one-time sources of revenue for recurring programs, though that is a 70% reduction from what the state has been used in the past.
Some 727 state employee positions would be abolished, though only 68 are actually filled at this time. About 500 of the eliminated jobs would be in higher education, where the budget would be cut by $141.3 million under Jindal’s plan.
State agencies would be required to impose $415 million in cuts in their operating budgets, and absorb another $160 million to pay for increases such as employee performance adjustments and inflationary costs.
The overall spending plan relies on gaining $525.9 million through abolishing some refundable tax credits such as those now offered for business inventory, wind and solar, converting vehicles to alternative fuel, milk production, research and development, and others. Legislators would determine the final list.
Nichols said the administration suggested a number of revenue raising ideas for the Legislature to consider.
Families could get a tax credit to counter increases in college and university fees. To offset that cost the state could increase the tax on cigarettes, which could generate about $100 million, she said. The state could also allow foundations and corporations to earn tax credits by making direct donations to higher education institutions.
Issuing bonds backed by tobacco settlement proceeds could raise up to $750 million for the state’s higher education scholarship program, Nichols said. Louisiana has already securitized 60% of the revenue stream and those bonds will be paid off in nine years.
“The current market condition is highly favorable with low absolute rates for the tobacco corporation to sell new bonds,” Nichols told the committee.
Other suggestions included increasing some state fees for services that have not been raised in years, directing unclaimed lottery proceeds to specific educational programs, and using P3s to obtain upfront payments by privatizing some services such as the state’s water chiller system.
Lawmakers will begin deliberations on the budget March 17. The Legislature’s session begins April 13.