DALLAS - The Louisiana Legislature agreed to a $28.7 billion state budget for fiscal 2010 on Thursday that restored $210 million in budget cuts proposed by Gov. Bobby Jindal in his executive budget.
The agreement to increase funding for higher education and health care was reached at 4:15 p.m., less than two hours before the 2009 legislative session was scheduled to end.
Jindal praised the compromise that put money back into the budget to restore some of the cuts proposed in the executive budget he sent to the Legislature in April.
The Legislature approved the budget on June 11, but Jindal said on June 15 he would veto $284 million of spending that was contingent on lawmakers approving several controversial measures before the session ended.
The compromise budget plan restored $210 million of the vetoed spending with state funds and millions more in federal matching dollars.
"We have reached a reasonable, sensible budget," Jindal said. "The debate was intense and passionate, and the results were good for the people of Louisiana." Jindal said the final budget plan restores $114.8 million for higher education and $243 million for health care, including federal funds.
His original budget proposed $219 million less in direct support for higher education in fiscal 2010 than in fiscal 2009. Jindal later agreed to an increase in higher education funding after his four of his predecessors in the office said earlier this month that the cuts would be crippling.
Health care will get $45 million more from the state than originally proposed, but federal matching funds will bring the total restoration to $233 million. The Department of Health and Hospitals still will get $260 million less in fiscal 2010 than in fiscal 2009.
Lawmakers restored the cuts by taking $86 million from the state's budget stabilization fund, $76 million from defunct insurance incentive fund, and $29 million from a medical assistance trust fund.
The Senate proposed tapping into the stabilization fund for $204 million, but House Speaker Jim Tucker, R-Algiers, said House members were determined to use only $86 million from the $775 million fund. The state will face severe problems in fiscal 2011, he said, when the one-time money used this year to restore budget cuts will not be available.
"The main reason is that it does not dig us a bigger hole next year," he said. "I think the House is being more fiscally responsible than the Senate in dealing with the constraints we have with this economic meltdown."
The state is expecting $1.3 billion less in revenues in fiscal 2010 than in 2009, which saw a $1.4 billion decline in revenues from fiscal 2008.
The final budget lowers state general fund appropriations by $478 million from fiscal 2009, or about 5% less. Total state spending will be down by $611 million.
The fiscal 2010 budget relies on $666 million of stimulus funds to replace state general fund revenues, and $277 million to make up for scheduled declines in federal funding for public education and health care.
Louisiana's GO debt is rated A-plus by Fitch Ratings and Standard & Poor's, and A1 by Moody's Investors Service.