The Louisiana House of Representatives taken on February 2, 2022. (Greg LaRose/Louisiana Illuminator)
Louisiana legislature leaders disagree on how to spend the billions of dollars on unexpected funds available to the state between now and next July.
Senate leadership wants to put more money into roads, bridges and college construction projects. Congressmen are advocating using hundreds of millions of dollars to pay off the debt of state employees, school teachers and higher education retirement plans.
Both competing proposals face barriers to approval.
Several versions of the House plan could jeopardize pay increases for higher education faculty and K-12 teachers proposed by Governor John Bell EdwardsLawmakers will also have less funding available for popular transportation projects and higher education initiatives currently under consideration.
Meanwhile, the Senate’s plan to put more money into construction projects cannot move forward without overwhelming support from members of the House of Representatives. Her two-thirds of Senators and Representatives must vote to fund more projects. Constitutionally Mandated State Spending CapsBut lifting that spending limit could frustrate Republicans, who generally urge states to cut spending.
But Senate leaders have made it clear they want to prioritize the bulk of the newly available funding for transportation and higher education construction projects, especially those that have already been approved.
Several projects funded by legislators in recent years have not been able to take off due to rising construction costs. Senate Finance Committee Chairman Bodhi White, R-Central, said lawmakers last voted to break spending caps in 2007 and he also in 2008, construction projects prioritized for funding. said it was.
At the time, lawmakers were witnessing a surge in federal funding for recovery efforts after Hurricanes Katrina and Rita. The current resource boom is due to the COVID-19 pandemic.
“[After Katrina]we spent that money on one-off spending to help districts across the state,” White said.
Edwards and lawmakers have already used the additional funds to pay back public severance payments in recent years, he added. Government payments to state retirement plans are expected to decline by $77 million annually from mid-2024 as the state makes so many early payments.
“We have paid [retirement debt] Ridiculously. We’re ahead of schedule,” White said.
Still, lawmakers are pushing ahead with plans to increase retirement spending. They surfaced with him using $704 million to pay off state employee severance pay and at least hundreds of millions to pay off another pot of teacher and higher education severance pay. Did.
Lawmakers believe that paying off retirement money early will free up money for state agencies, school systems, and colleges that are currently earmarked for retirement. They said the 0.45% state sales tax cut would automatically go into effect and would be an effective way to keep government spending under control by 2025, which will cost the state hundreds of millions of dollars. I was.
House Appropriations Committee Chairman Jerome Sellinge, R-Houma, said repaying severance payments would also help improve Louisiana’s bond rating, ultimately saving the state money. Bond rating agencies are positive about the state’s efforts to pay down its debt, and may upgrade Louisiana’s rating as a result, he said.
House members also hope that using the money for retirement benefits will help Congress avoid voting to break state spending caps. Debt payments don’t count against your spending limits, which may make it easier to operate within your current budget limits.
Still, Zeringue and others haven’t disclosed where they’ll get all the money or what they won’t fund if they divert all the extra dollars to pay for retirement.
“We are working on it,” Zeringue said.
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But legislators have hinted that wage increases for higher education faculty, K-12 teachers, and staff could be a chopping block under their plans. The governor’s budget proposal is focused on giving the K-12 teacher at least her $2,000 raise.
On Wednesday, the House Appropriations Committee unanimously approved House Bill 170This will divert approximately $440 million in annual state sales tax revenues over the next two budget cycles to pay off teacher and higher education retirement debts and to fund bridge and road maintenance projects. Become.
Under the legislation, Zeringue and its sponsor, Rep. Chris Turner R-Ruston, recommended that the state hold off on a proposed K-12 teacher and staff salary increase that would cost the state $197 million. proposed to the state. Instead, Turner said his bill would free up enough money for local school systems to raise teachers’ salaries, but didn’t have to.
Under Turner’s proposal, legislators could also repeal a 2.5% higher-education teacher salary hike in the Edwards budget that is expected to cost the state $37.5 million. Again, Turner said his bill would free up funds the higher education system would otherwise have to spend on retirement. These systems could also use the funds to raise faculty salaries, but he did not intend to require them to do so.
Even with these cuts, Turner’s bill leaves an additional $210 million hole in the governor’s proposed budget. Turner and Zelling declined to say what other cuts the House might make to Edwards’ plan to close that gap.
That information should be released in early May, when the House releases its first state budget plan.
A post-construction project, a teacher raise, or retirement debt? First appearing in the Louisiana Illuminator, lawmakers discuss how to spend money.