Lawmakers' $34 billion budget includes higher ed cuts, halts raises for state workers
BATON ROUGE – Legislators agreed on a $34 billion state budget that cuts funding for colleges and halts pay raises for state employees, but they will likely return for more of the same later this year.
The spending plan the House and Senate agreed upon on June 30 – the last day of the 2020 fiscal year – also provides relief money for businesses affected by the coronavirus shutdown.
The ongoing struggle of businesses and a slow recovery for the oil industry will likely put the state in a deeper hole later this year, based on the economic forecast from the Revenue Estimating Conference.
Legislators could return to Baton Rouge as early as October to hammer out plans on how they will fill a budget gap if the economy remains sluggish.
Lawmakers opted to split the federal COVID-19 relief funds between the fiscal year that ended June 30 and FY 2021.
Additional cuts will likely play a role in the fix, although lawmakers may also opt for $800 million in funds could figure into the efforts to fill the hole.
The state also set aside $105 million in surplus funds from last year to ease the cash drain.
GOP legislature jockeyed against Democratic Gov. John Bel Edwards during the session to use $300 million in COVID-19 relief money to fund tax breaks and small businesses, rather than his proposal to funnel the money to local governments.
Proponents said the measure would help businesses that were stifled due to a forced shutdown and would also keep jobs intact.
Democrats claimed a victory on a bill that gives one-time payments of $250--which equals one week of unemployment benefits--for
up to 200,000 front-line workers, from grocery clerks to health-care workers, during the COVID-19 stay-at-home order. The $50 million to cover this will come from $1.8 billion in federal coronavirus aid funds.
Nearly two-thirds of the $34 billion in the state budget comes from federal funds, including grants for the state’s Medicaid program.
State economists predict that nearly $1 billion in lost revenues due to the virus will create shortfalls in the
upcoming fiscal year.