La. budget projects shortfall of $963-mil for 2013 budget year - KPLC 7 News, Lake Charles, Louisiana

State projects shortfall of $963M for 2013 budget year

BATON ROUGE, LA (KPLC) -

The Legislature's joint money panel, the Joint Legislative Committee on the Budget, met Friday and got a glimpse at the revenue outlook for next fiscal year.

For the 2013-2014 budget year, beginning July 1, the state has a projected shortfall of $963 million.

While it's only a projection, lawmakers will begin eyeing ways to fill the gap.

Rep. Mike Danahay, D-Sulphur, said if there's any good news in the numbers, it's that the deficit is less than last year's total: $1.6 billion.

"Of course, we don't like to hear the word deficit. It definitely puts some crimps on our budgetary process and the services to the people of Louisiana," Danahay said.

Danahay added that it's disheartening, especially when the cuts are usually made to the biggest and most important state agencies.

"The two largest budgets in those monies is higher education and healthcare, so naturally those are the two budgets that you look at," he said.

And in the past year, many cuts have been made to both agencies, like the Federal Medical Assistance Percentage (FMAP) monies, which are the Medicaid reimbursement funds which have been reduced.

And with higher education, tuition has increased which, in turn, increased the government funded TOPS scholarship for in-state students.

Danahay said lawmakers will have to prioritize and look at additional agencies to cut from.

"They'll make those decisions in formulating the budget. Higher education and healthcare, we certainly don't want to cut those. Those have been the sacrificial cows for the last few years and I don't know if we can do that any farther," Danahay said, adding that he hopes for the day to see expenses and revenues match up for a balanced budget.

Rep. Brett Geymann, R-Moss Bluff, said that one of the reasons the projected shortfall is so high is that the state continues to use one-time money. Geymann has long been a critic of the use of one-time funds.

"Right now, to begin with, we're about $300 million short since we have to replace the non-recurring money we used last year to balance the budget. Then, you add the rising costs of doing business … labor, retirement, insurance all are going up, all are adding to the cost of keeping the same level of service. Also, the federal match for Medicaid has been reduced. You couple that with the problem of using non-recurring money and you have a budget mess," Geymann said.

Geymann said he and some other lawmakers are advocating for a change in how the state's budget process works.

"We believe we should spend our dollars on critical services first, make other adjustments, possibly make reductions – but we must not continue to rely on non-recurring monies," he said.

Geymann said that he is worried about deeper cuts to already strapped institutions like Moss Regional Medical Center and McNeese State University.

"I would be worried. I am worried. We just have to work on this budget process. We have to change the way we balance our money," he said.

The Associated Press reports that Barry Dusse, director of the Office of Planning and Budget, said more than one-third of the gap, about $355 million, is tied to a drop in federal Medicaid financing that also created a deficit this year.

According to the wire service, another slice of the shortfall, at least $164 million, includes inflation costs, merit raises for state employees and other items that lawmakers haven't necessarily funded in recent years.

More than $250 million reportedly involves the loss of one-time dollars that paid for continuing programs.

The Joint Legislative Committee on the Budget (JLCB) is made up of the members of the House Committee on Appropriations, the Senate Finance Committee, and the Chairmen of the House Committee on Ways and Means and the Senate Revenue and Fiscal Affairs Committee.

Both Danahay and Geymann are members of the joint panel.

Copyright 2012 KPLC. All rights reserved. The Associated Press contributed to this report.

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