BATON ROUGE, La. (WAFB) - Facing an $843 million dollar budget shortfall for the coming fiscal year, lawmakers must decide how to use the roughly $500 million left over from last year’s budget.
Louisiana’s constitution requires legislators to balance the books, and the state cannot plug anticipated budget holes directly using prior-year surplus. Surplus tax dollars that are collected beyond the official revenue forecast can be saved, used to pay off debt, or invested in infrastructure projects.
“We all know we need to get our economy kick-started,” Commissioner of Administration Jay Dardenne told WAFB Thursday. “What better way to do that than put people to work fixing our roads and bridges in Louisiana that everybody knows is one of our highest and greatest needs?”
Gov. John Bel Edwards’ administration would spend the maximum allowed portion of surplus on infrastructure projects that are ready to begin as soon as possible.
Fronting the cash would create jobs for some of the 300,000 Louisianans who are currently unemployed because of the coronavirus pandemic.
“The highest and best possible use of that surplus money is to use it to start economic activity in the state as quickly as possible,” Dardenne told the House’s tax committee. “We want to put money immediately to roads, bridges, and coastal projects.”
But other lawmakers say the state should deposit some of the money into the state’s rainy day savings account, which could be tapped during a special session to restore some of the cuts lawmakers are expected to make during the regular session.
“You don’t spend a dollar when you don’t have a dollar,” Rep. Stuart Bishop, R-Lafayette, said. “I know there will be sunnier days, but right now things are relatively dark.”
Bishop writes the state’s budget for construction projects, a deeply political bill worth about $5 billion. His plan withholds around $107 million in surplus that the governor wanted to spend on coastal and transportation projects.
Bishop’s plan instead pays for those projects over time, using bonds.
“It’s going to push (those projects) further down the line to get done and they’re not going to get done immediately, stimulating the economy,” Dardenne said. “We want to get them done now, with one-time money.”
Once money is deposited in the rainy-day fund, a portion is locked away from spending, meaning this is lawmakers’ last opportunity to spend the maximum amount.
“We have to start saving some money for the state of Louisiana and paying off some of our debt,” Bishop said. “It starts now, here’s our opportunity.”
Lawmakers will have to work out their differences on the house floor.
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