The Governor's budget proposal is due out this week. It looks like they are going to plan for cuts now that they expect to undo once the stimulus comes in.
Jay Dardenne, the commissioner of administration for Gov. John Bel Edwards, plans to kick off the negotiations on February 26 by presenting a budget proposal to the Legislature that includes spending cuts based on current revenue projections.
But the potential for more federal aid is on the horizon. President Joe Biden’s push for a $1.9 trillion stimulus package, which would be the third federal aid bill since the pandemic started, could ease the state’s losses, and put Louisiana in a stronger position for fiscal 2022, which starts July 1.
“It's anticipated that we get a federal stimulus. If that's the case, then we'll be in better shape,” said state Rep. Jerome Zeringue, R-Houma, the chairman of House Appropriations Committee. “Because the economy is in such bad shape right now, we’re hoping we'll have a similar situation to what we had last fiscal year, and we won't know that until the federal stimulus package comes in. We're anticipating it, but there's no guarantee until it comes. That's kind of what we need and are depending upon to continue to get us through this crisis.”
A month ago, the Revenue Estimating Conference deliberately chose a more conservative projection than was really necessary, not only because they didn't know the size of the stimulus, but also because they chose to lowball projected tax collections. So there should be ample opportunity to add back later whatever cuts show up in the proposal now.
Of course, the last time this legislature had to figure out what to do with federal stimulus funds, they carved out $300 million for John Schroder to dispense on his own. So we'll have to see what they come up with this time.
