DALLAS — Louisiana state senators have endorsed key elements of Gov. Bobby Jindal’s fiscal plan for dealing with a revenue shortfall estimated at $3 billion over the next two fiscal years.
Senators overwhelming approved and sent to the House a package of bills that would loosen restrictions on Louisiana’s rainy-day fund and double the dollars that can be taken from constitutionally protected funds if revenues fail to meet predictions.
Another portion of the fiscal package would redirect $30 million a year from the state’s share of the national tobacco settlement to a program that finances treatment for tobacco-related diseases, children’s health insurance, and public medical clinics.
Senate President Joel Chaisson 2d, D-Destrehan, said the bills would provide the flexibility needed to balance the budget without severe cuts to higher education and health care.
“There are going to be cuts even if these bills pass,” Chaisson told the senators. “These bills will just give us a broader array of options.”
Chaisson is the sponsor for all six bills in the fiscal package proposed by Jindal in March and passed by the Senate on Wednesday
One segment of the package, SB 1 and 2, would allow the use of the $800 million budget stabilization fund if federal funding levels for the state were down from the previous fiscal year. The rainy-day fund can now be tapped only when state revenue falls.
Both chambers of the Legislature have agreed on a plan to use $198 million from the rainy-day fund in fiscal 2011, but differ on how fast the fund should be refilled.
SB 391 and 392 would raise the money that can be taken from an estimated $3.9 billion in constitutionally protected funds to 10% per year from the current 5%. The revision would not affect the Transportation Trust Fund or the dedicated Conservation Fund.
The measures require constitutional amendments that would be submitted to voters in November if the House accepts the legislation passed by the Senate.
However, House Speaker Jim Tucker, R-Algiers, has said it is unlikely the current versions would receive the necessary two-thirds support in the House.
The latest state revenue projections are for a $1.7 billion shortfall in fiscal 2011 and a $1.3 billion shortfall in fiscal 2012. The estimates are based on declining revenue, the end of federal stimulus funds, and higher state expenses for health care and other social services.