GOP legislative leaders control deficit deal fate

Although a deal seems afoot to resolve Louisiana’s latest budgetary shortfall, what if it doesn’t come off?

The special session that ends legally tomorrow Democrat Gov. John Bel Edwards called to close the gap. That came about beginning when on Jan. 27 the Joint Legislative Committee on the Budget confirmed a $304 million general fund deficit existed.

At that point, according to the Constitution and fleshed out in statute, Edwards had the option (the word “may” features prominently in all language regarding procedures in this instance) of making cuts on his own, with JLCB blessing, of up to three percent per budget unit for most appropriated spending. If he can close the gap to seven-tenths of a percent – almost $63 million in this instance, he can ratchet that shaving of up to five percent in most instances.

However, Edwards skipped this step completely and went straight to what happens if regardless of having taken those maneuvers the difference remained after 30 days: the special session. At present, the chambers seem able to pass enough cuts and redirections of money to leave a gap of around $90-100 million. But whether the necessary two-thirds of each chamber would vote to fill that remainder with money from the Budget Stabilization Fund continues up in the air.

In fact, if such supermajorities do not agree prior to session’s end, then a shortfall in that amount would remain. The same would result if scheduling a Fund draw but at an amount Democrats find too low, who then block the draw (or the appropriations bill with some GOP helpers). The question then is what would have to happen next, for depending upon the consequences this could affect whether that deal gets done or if legislative leaders and Edwards will have to make last-minute adjustments reducing reliance on the Fund.

If rejection of any Fund money transpires, essentially a reset could occur immediately. The Republican-dominated JLCB could vote to confirm a new deficit the day after the session’s end. Assuming its size at the minimum negotiation level of $90 million, that allows for Edwards to start making reductions at the higher five percent level, which he wants to avoid if at all possible. Thus, if threatened by this, he might go ahead and acquiesce to the use of fewer Fund dollars.

Yet, as noted already, the language makes all of this optional on his part. So, he could avoid making cuts up to 30 days, and with that strategy the Legislature would have to come into special session no later than Mar. 25, 16 days prior to the beginning of the regular session. Yet if the JLCB waited until Mar. 13 to confirm the deficit, then the period of action falls into the regular session where constitutionally the Legislature has until its end – at maximum, 23 days until the end of the fiscal year – to erase the deficit.

The JLCB may wish to delay for two reasons: the legislative leadership that controls it may feel comfortable with a deal that uses $20-30 million fewer than the Fund maximum and thus wish to neutralize more fiscally conservative elements that otherwise wield a potential veto over Fund use in order to exact bigger spending cuts, or it feels that the revenue picture may brighten over the next month and obviate the need for cuts. Either scenario Edwards fervently desires, given he would do anything to avoid reducing the size of government any further, not only given his big government ideology but also because it would add ammunition to his narrative that tax reform must take a form inducing a net hike in revenues collected to support a higher level of spending.

Thus, whatever leverage conservatives have in forcing Edwards to slash more spending really depends upon the Republican leadership’s enthusiasm on that score, through its control of the JLCB. Even that is tough-and-go: while most GOP House members on it would hold the line if so asked (perhaps only state Rep. Bubba Chaney might defect), Sen. Pres. John Alario has seemed very lukewarm on the idea, and allies of his on it such as state Sens. Norby Chabert, Ronnie Johns, Danny Martiny, and Blade Morrish, combined with all Democrats, could sink any attempt for any early declaration that starts the clock.

In the final analysis, any deal depends upon GOP leaders’ willingness to force Edwards into calling another special session as the price for not making additional cuts on his own, balanced with the option of having the Legislature make deeper cuts now. If they pass deeper cuts now that either Democrats defeat (by nixing the Fund draw) or Edwards vetoes, that makes for worse political fallout for him and his party, especially when followed up by another special session that makes Edwards and Democrats look obstructionist and wasteful in holding out for bigger government.

Republicans have the upper hand in this contest of wills, if only they seriously wish to use their leverage.