As currently constituted, Republican Gov. Jeff Landry’s most pressing budget task will be to resist government-as-usual to continue right-sizing state government and to fund priorities that improve quality of life within Louisiana.
When introduced last week described as a “standstill” budget, spending rises less than one percent. However, that masks a lot of change, principally from two sources: the disappearance of pandemic-related grants and one-time spending attached to that but countered by continuation of escalating health care costs triggered by Medicaid expansion almost a decade ago. In all, while state means of finance fall two percent, a federal funds increase of around 3.5 percent more than offsets that to increase the total adjusted budget a few hundred million to $45 billion.
Lesser movement comes from shifting priorities. Not surprisingly, health care continues to vacuuming up more dollars, although there were a couple of novel situations. A decline in collections from motor vehicles and from state lands produced more demands on the general fund. On the spending side, juvenile justice and child welfare matters receive a boost, as does general public safety. And, contrary to claims made by advocates of committing to increasing food aid in the summer with federal dollars that this wouldn’t cost the state, the budget had to include extra state dollars to cover that.
But a major new discretionary expense is funding the educational savings accounts for middle-class-and-below families. Landry wants to fold the $43.4 million spent on the current lower-income voucher program into this and then add $50 million to the top to cover a portion of the eligible families. Even with priority given to lower-income households and those with children with disabilities, anticipated demand makes likely that a kind of lottery system will have to sort out everything.
Given that general fund dollars won’t increase enough to cover that discretionary addition along with the other costs mandated, other things will have to be trimmed, with the Landry Administration placing priority on previous one-time expenses. Although somewhat relatively small, the most squawking about “cuts” came over one-time $7 million for domestic violence shelters.
This is a hallmark of the political left, where any expansion of a favored program, even if temporary, becomes unimpeachable no matter whether there are more important priorities or better way of doing things. It’s also a tactic to stall disempowerment of government; so, for example, expect a move in the Legislature from Democrats to make the one-time shelter subsidy permanent at the expense of ESAs or other education improvement measures such as differential pay – much as they did in getting Landry to buckle on the extra summer meal provision last year.
Landry can’t let that happen. In the case of the shelter money, his administration can argue, as that money goes to only locations in a quarter of parishes, it’s more appropriate for local entities to provide funding rather than all state taxpayers, where $7 million plus other dedicated dollars surpasses federal grant monies involved for shelters. And it’s not like these governments don’t have the funds; for example, New Orleans could have put $2 million into the effort instead of with that subsidizing location of a grocery store in New Orleans East.
Of course, should Amendment 2 pass next month into the Constitution, the budget will be rejiggered as that rewrite changes revenue and expenditure patterns. Regardless, Landry can’t let the rebalancing effort of state government that promises to shift power from it to people get thwarted by business as usual, such as by diminishing ESA dollars, especially as predicted expenses will rise faster than inflation over the next five years.
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