The presentation of the executive budget will show Jindal’s cards on what he recommends to cut, what facilities he wants to privatize or close and just how much patchwork financing he suggests to piece it all together.
Jindal’s top budget adviser, Commissioner of Administration Kristy Nichols, will outline the plans Friday to lawmakers, and from there, the legislative negotiating begins over how to close a $1.3 billion budget gap in the 2013-14 fiscal year that starts July 1.
While haggling over how and where to cut has become commonplace over the last five years, this budget deliberation comes with a new complication. State lawmakers also will be debating the governor’s proposal to rewrite much of Louisiana’s tax code.
Jindal’s seeking to get rid of state income taxes in favor of higher sales tax rates, possibly higher tobacco taxes and a widening list of services to be taxed by the state. The governor wants the whole exercise to be “revenue neutral,” meaning the state wouldn’t lose money or gain money from the tax code rewrite.
But there will be a lot of moving parts — and a budget dependent on the numbers panning out like the estimates suggest, adding further wrinkles to an already complex set of budget negotiations.
This year’s budget stands at $25 billion.
Jindal’s financial analysts have estimated the state’s projected income next year is nearly $1.3 billion less than the costs to continue all existing programs and services and account for inflationary growth.
The shortfall is on par with previous years since Jindal’s been in office. But that’s probably little consolation to lawmakers looking at what they can cut in a poverty-ridden state where large numbers of people rely on government programs for assistance.
The most vulnerable areas to slashing are health care services for the poor, uninsured and disabled and public colleges. Both sectors have taken deep hits to funding in previous rounds of cuts, leaving few easy choices left for making budget reduction decisions.
At least some of the budget gap can be closed if lawmakers and the governor refuse to pay for inflationary increases, merit raises and education funding boosts that they haven’t covered in recent years. Those are estimated to be about $164 million.
Few details have leaked about where Jindal might consider the latest budget slashing, but he’s made it clear he won’t seek to tap into federal funding available to expand Louisiana’s Medicaid program to help cover health care costs.
Jindal said last week that he won’t reconsider his refusal to widen the government-run health insurance program to cover as many as 400,000 additional low-income residents who would be eligible, even though the federal government would pick up most of the tab.
The Republican governor said Medicaid is an outdated, inefficient program and states should instead be free to design health programs that suit their individual needs.
He’s sure to face opposition from Democrats and advocacy groups who’ll seek to add the dollars into the budget and lessen some health care slashing.
Meanwhile, if Jindal’s budget proposal is similar to his recommendations from past years, he’ll run into strong opposition from a group of conservative House members who call themselves the “fiscal hawks.”
The lawmakers argue that Jindal’s method of cobbling together funding for programs only continues the state’s cycle of financial problems, by using one-time dollars to pay for ongoing services. The fiscal hawks want to put limits on the use of piecemeal funding, which could force even deeper cuts to next year’s budget.
Legislative budget hearings will begin shortly after the governor unveils his multi-billion dollar proposal. Wrangling over the plans likely will continue until the final days — or hours — of the legislative session, which must end June 6.
Melinda Deslatte covers the Louisiana Capitol for The Associated Press.