BATON ROUGE, La. (AP) — Louisiana Gov. John Bel Edwards said Thursday that he’ll propose a state budget for next year that avoids cuts despite the coronavirus pandemic, while also giving modest pay raises to public school teachers and new money to colleges.
The Democratic governor provided a broad outline to reporters of the 2021-22 state operating budget that his administration will unveil in greater detail Friday at a joint House and Senate budget hearing.
Federal aid and improving, though not fully recovered, tax collections will close a gap that at one point was estimated to top $900 million in the financial year starting July 1.
“We’re in a better place than many thought possible,” Edwards said. “This is some hopeful and bright news in a period of time that really hasn’t been so bright.”
In addition to avoiding cuts, Edwards said he’ll also recommend that lawmakers in the majority-Republican Legislature give a $400 annual salary increase to K-12 public school teachers and $200 pay bumps to support staff. He’s also proposing additional money to higher education, including dollars he wants steered to faculty salary hikes.
That’s a far better situation than the Edwards administration and many state lawmakers expected they’d face, as they crafted next year’s budget.
Louisiana is projected to collect nearly $9.6 billion in general state tax dollars for the upcoming financial year, an increase above this year — but not enough to offset all the federal coronavirus aid Edwards and lawmakers used to piece together this year’s budget.
Continuing federal money that Congress has given states to respond to the coronavirus pandemic will help fill the rest of the hole, particularly enhanced federal payments to cover Medicaid expenses.
States pay a share of the cost for the health services provided to Medicaid patients, a share tied to the state’s poverty level and other factors established by Congress and federal officials. Because of the pandemic, the federal government is paying a greater share for some services above what it usually pays. That diminishes the state’s costs in a program that totals billions in Louisiana.
Edwards said that “had a big impact on our ability to fashion the budget.”
“Anytime you get relief on the Medicaid program and lower the expenses that the state incurs in that program, it provides a tremendous amount of flexibility,” he said.
The Joint Legislative Committee on the Budget will get a more complete rundown of Edwards’ 2021-22 budget proposal Friday, which officially kicks off the negotiations for how to fund government programs and services for another year.
In addition to the $9.6 billion in general tax dollars estimated for next year, Louisiana agencies will receive billions of dollars from fees for services and from federal financing to piece together the entire budget.
Lawmakers start the legislative session in April and are not expected to finish crafting a spending plan until the session’s final days in June.
Louisiana also has a $270 million surplus left over from the 2019-20 budget year, but lawmakers and the governor can’t use that to pay for ongoing state expenses. Under the Louisiana Constitution, 25% must flow to the state’s “rainy day” fund and 10% must pay down retirement debt. That will leave about $95 million that can be spent on certain constitutionally allowed one-time expenses, such as debt payments, coastal restoration work, construction projects or savings.
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