Edwards budget: 'What falling off the cliff looks like'

BATON ROUGE (AP) — Only months away from the expiration of $1 billion in state sales taxes, Gov. John Bel Edwards released his worst-case-scenario budget Monday, a spending plan that would end many of Louisiana’s safety-net health programs and strip 80 percent of the financing for the beloved TOPS program that helps students pay for college.
“I am confident that none of you will want to be sending this budget to my desk for approval,” Edwards told the Joint Legislative Committee on the Budget. “I don’t think it is possible to pass a budget, in fact, that makes cuts at this level.”
The Democratic governor is required to submit a spending plan for the budget year starting July 1 that only accounts for dollars expected to be available. The proposal doesn’t include temporary sales taxes that expire when the new financial year begins. Edwards wants to replace those with other taxes.
“This is what falling off the cliff looks like,” he said.
Louisiana’s operating budget would fall from $28.1 billion this year to $25.3 billion next year with the loss of federal matching dollars and other revenue sources that would disappear with the state tax cuts proposed. Total expenditures across the package of budget bills would fall from $30.2 billion to $27.4 billion.
The state’s child welfare agency, veterans affairs department, coastal protection agency, highway department and Louisiana National Guard would be shielded from cuts. The K-12 public school financing formula also would be protected.
But higher education and health programs would be on the chopping block because they have the fewest protected financing sources.
About two-thirds of the $1 billion cut — $660 million — would hit health services, ballooning to $2.3 billion with lost federal and other matching cash. Steep reductions would fall on safety-net hospitals and clinics for the poor and programs that help thousands of elderly and disabled people.
TOPS, which cost about $291 million this school year, would lose $233 million of its financing for the next academic year. College campuses would take an additional $26 million reduction, and the Go Grants program that provides needs-based funding for students would be cut in half.
Senior citizens centers would be cut, along with state parks. Sheriffs would receive less money for housing state prisoners.
The governor stressed he has no interest in seeing such a budget become reality, and he blamed lawmakers for having to present it.
Edwards wants to offset expiring taxes with a package of other taxes that could raise or maintain higher taxes on businesses and middle- and upper-income earners. House Republicans have blocked the ideas in previous legislative sessions.
“You chose to temporarily patch up the problem for 27 months. And the day of reckoning is at hand,” Edwards said.
To pass a tax package would require a special session, and Edwards said he would only call one if he can reach an agreement with House GOP leaders.
"So far, they haven’t struck that deal. No one who opposed taxes has offered a detailed proposal for cutting $1 billion, a point Edwards made.
Republicans resisted suggestions they need to replace the entire $1 billion in expiring taxes to keep from enacting devastating cuts.
Rep. Rick Edmonds, a Baton Rouge Republican, said changes to the federal tax code will boost tax collections for the state treasury, because Louisiana has tax deductions tied to federal provisions. Sen. Conrad Appel, a Metairie Republican, suggested state government has grown at an unsustainable rate.
Edwards and Sen. Sharon Hewitt, a Slidell Republican who may run for governor, tangled over Edwards’ claim he’s cut $600 million since taking office. Hewitt doesn’t believe the savings figure is real, and she questioned if the Edwards administration has done enough to dig into state spending.
“I guess maybe my definition of a cut is different than yours,” Hewitt said.
Edwards replied: “I can explain it to you, but I can’t understand it for you.”
Hewitt shot back: “That is insulting.”