La. House debates budget bills; No changes to next year's revenue forecast, REC says

BATON ROUGE, LA (WAFB) - The state budget shortfall remains around $600 million for next year as lawmakers in the La. House started their first day of crafting their budget plan.

The Revenue Estimating Conference (REC) decided Thursday that that money coming into state coffers will likely not be any greater than an estimate from earlier this year. As a result, the shortfall for the fiscal year starting on July 1 will be the same.

There was some good news. State economist indicated that the price of oil is on the rise. Lawmakers are using an estimate of $30 per barrel for the 2016-2017 fiscal year. However, economists said that the price will likely average more than $40 per barrel.

At the same time, however, Louisiana has faced months of job losses.

"From September 2015 on, we've been negative. The economy by total employment has been contracting," said Greg Albrecht, the chief economist for the Legislative Fiscal Office.

Jim Richardson, who chairs the REC, said that less people working means that tax revenue will dip.

"Both economists thought we were on track, there's still uncertainty ahead," said Jay Dardenne, the commissioner of administration and a member of the REC.

With that $600 million figure in mind, House lawmakers spent hours debating the budget Thursday afternoon.

After three hours of discussion, the House passed a bill giving the Attorney General his own breakaway budget with a vote of 69-26. The bill's sponsor, Rep. Cameron Henry, R-Metairie, said HB 105 was about giving the AG more control over his own budget.

While the legislator would still have some oversight powers, the Division of Administration would be cut out from overseeing mid-year adjustments.

AG Jeff Landry took to the floor to speak in support of the bill, saying he feared that the administration of Gov. John Bel Edwards may try to interfere in how he does his job.

"The legislature is supposed to check the executive. The executive is not supposed to check another executive," AG Landry said.

Meanwhile, some Democrats questioned the constitutionality of the bill. In a statement, the governor called the bill a "power grab" and said he would veto the measure if it ever made it to his desk.

As part of the measure, lawmakers amended the bill to cut the AG budget by $6 million. Rep. Jack Montoucet, D-Crowley, proposed the amendment saying he would put the money toward rural hospitals, which are facing cuts as part of the House proposed budget.

The debate then turned to HB 1, the main budget for the 2016-2017 fiscal year. The House Appropriations Committee advanced a budget proposal Monday that would fully fund TOPS scholarships. However, other agencies would see cuts. The Inspector General's Office, in charge of investigating governmental fraud and waste, would be gutted altogether.

On the floor, the plan to defund the IG's office was modified. Lawmakers advanced an amendment by Rep. Franklin Foil, R-Baton Rouge, restoring about $1.6 million in funding to the Inspector General's Office.

The budget proposal also included a rearrangement of money to the state's partnership hospitals. The governor had proposed cutting off four hospitals, while funding five other hospitals almost entirely.

The House Appropriations Committee altered that, providing funding to all hospitals. However, each would see a cut. The Shreveport hospital would see a 40 percent cut to funding, while Our Lady of the Lake in Baton Rouge would see an 8 percent reduction in state funding.

Speaking on the House floor, Rebekah Gee, the secretary of the Department of Health and Hospitals, told lawmakers that cuts of that magnitude could put those partnerships at risk and could lead to an ending of the residency programs at all LSU hospitals across the state.

Other members of the Edwards administration, as well as the president of the Senate, are also critical of the House budget proposal. It's likely to be modified on the Senate side.

"I think everyone's in agreement with wanting to help the TOPS program, we're concerned that labor programs would be eliminated," said Senate President John Alario, R-Westwego.

"Regardless of how the pie is sliced today, you've got significant shortfalls that are going to take place in the budget and it's going to be painful for a lot of different areas of budget," Dardenne said.

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