Teachers are in line for a $ 400 fundraiser on a state budget plan that will not contain any spending cuts, Gov. John Bel Edwards told reporters Thursday afternoon after the state received a large amount of federal money for the Medicaid program.
Budget architects have been wondering for months how the pandemic will affect the state’s spending plan for the fiscal year beginning July 1st.
At one point, it was estimated that revenue deficits would exceed $ 900 million. Economists were unsure how COVID-19 affected the state’s economy and feared the worst. Hundreds of millions of federal pandemic aid grabbed last year’s budget, but officials remained concerned.
Federal aid and improvement, although not fully recovered, contributed to the tax collection. “We’re in a better place than many thought possible,” Edwards said.
With approximately $ 2 billion provided in Louisiana from a federal coronavirus aid bill passed in December and the likelihood of another federal …
And thanks to the continuation of a federal Medicaid recalculation, Edwards’ executive budget proposal, Chief Financial Advisor, Administration Commissioner Jay Dardenne, will present Friday morning at the State Capitol will have no budget cuts but it will have more money for teachers and a $ 200 increase for support staff, Edwards said.
The Democratic budget proposal from Edwards begins negotiations for months with the Republican-led legislature on the state budget. Legislators will prepare the proposed budget at the joint hearing of the budget of the House and Senate.
This measure is part of an ongoing effort – in which Edwards campaigned – to raise teachers ’salaries to the southern regional average. Teacher unions are one of the main sponsors of Democrats.
A huge amount of money the state is getting from the federal government to fund Medicaid is reinforcing the shortcomings of Edwards ’proposal. The health insurance program for low-income and low-income residents is paid for primarily by the federal government, with the state giving a share. Medicaid represents one of the most important parts of the state’s annual spending.
Louisiana will have $ 228 million less to invest in the multimillion-dollar state budget that will be created in the coming months, after a statistic …
During the pandemic, the feds gave Louisiana and all other states a more favorable “coincidence” rate for the Medicaid program by the end of the year, freeing up money to make holes and make investments.
“That doesn’t mean COVID doesn’t challenge us,” Edwards said. The state’s unemployment system is more or less bankrupt, with only $ 6 million in the bank, he said. The state has already borrowed more than $ 130 million from the federal government and will have to borrow more to keep the fund solvent.
He called on Congress to send more aid to state and local governments (something proposed by President Joe Biden but opposed by some lawmakers) to help consolidate the trust fund and prevent taxes from coming into effect on businesses. This happens automatically when the trust fund falls below a certain level, but Edwards and the Republican-led legislature agreed to delay those taxes last year.
Louisiana is expected to raise about $ 9.6 billion in state general taxes for the next fiscal year, an increase above this year, but not enough to offset all the federal coronavirus aid that Edwards and lawmakers used to reconcile this year’s budget.
The continuation of the federal money that Congress has given to states to respond to the coronavirus pandemic will help fill the rest of the hole.
With approximately $ 2 billion provided in Louisiana from a federal coronavirus aid bill passed in December and the likelihood of another federal …
The Joint Legislative Committee on the Budget will get a more complete summary of the Edwards 2021-22 budget proposal on Friday. Republican leadership in the legislature has generally taken a more conservative approach to finance, expressing a desire to invest money in state savings accounts and opting for lower revenue forecasts than the governor wants.
Lawmakers begin the legislative session in April and are not expected to finish drafting a budget until the last days of the session, in June.
Louisiana also has a surplus of $ 270 million left over for the 2019-20 budget, but lawmakers and the governor cannot use it to pay ongoing state spending. Under the Louisiana Constitution, 25% must go to the state’s “rain day” fund and 10% must pay retirement debt. This will leave about $ 95 million that can be spent on certain constitutionally permitted one-off expenses, such as debt payments, coastal restoration work, construction projects, or savings.
The Associated Press contributed to this report