State Spending Cap to be 12% Higher

February 2, 2007

Reported by: Associated Press

State economists estimate Louisiana's budget could grow by more than 12% next year without breaching a constitutional cap on spending, as much as $1.4 billion in new budget growth.

That increase in the spending cap for the 2007-2008 budget year that begins July 1st could clear the way for lawmakers to plug millions of dollars into new projects and spending that have been blocked this fiscal year because Republican lawmakers refused to raise the spending cap.

Commissioner of Administration Jerry Luke LeBlanc, who is Governor Kathleen Blanco's chief financial architect, said the executive budget that the governor will unveil to legislators next month will be below the maximum spending allowed next year.

Lifting the cap requires a two-thirds vote in both the House and Senate, a barrier that Blanco's allies failed to clear during a contentious legislative session in December. House Republicans beat back several attempts to raise the cap, stalling the governor's attempts to spend excess tax revenue on road construction, debt repayment, public employee pay raises and other items.

The state has about $1.9 billion dollars available to spend, but only about 162 million of that can be appropriated before July first until the cap is hit and a two-thirds vote of the Legislature is needed. However, LeBlanc said a list of outstanding needs also will whittle away at the cap, including required education and prisoner spending.