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Wednesday, April 24, 2019

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Jindal administration working to close budget gap

Jindal administration working to close budget gap

BATON ROUGE, La. (AP) — Gov. Bobby Jindal's administration has started sifting through agency budget proposals as it works on a plan to close next year's $1.4 billion shortfall, but the governor's chief budget architect said the hole isn't quite as large as it appears.

Commissioner of Administration Kristy Nichols said about $200 million of the gap for the fiscal year that begins July 1 is tied to inflationary increases that don't necessarily get funded each year. Those include items such as state worker pay raises and assumptions that enrollment in Louisiana's Medicaid program and use of its services will grow.

Another $300 million of the shortfall, Nichols said, can be filled by using recommendations from a consultant hired by the Jindal administration to devise proposals to save the state money or find other available revenue sources.

"We have items that will significantly reduce the $1.4 billion," Nichols said in an interview this week. "We're working on every option to get the number down."

Even with those adjustments, a hefty gap remains, and Nichols acknowledged cuts will be needed.

Nearly $1 billion of the shortfall is because Jindal and lawmakers used patchwork financing to balance this year's $25 billion budget, dollars that won't be available the following year for spending.

That piecemeal funding included savings from an advanced debt payment, trust fund dollars, money from a tax amnesty program, loan repayments and pharmaceutical settlement dollars.

The Jindal administration is expected to propose similar types of "one-time" money to plug holes in next year's budget before settling on how much to slash spending.

But Nichols said rather than give agencies target figures to cut their spending plans, she wants to talk about state priorities and ways to end duplications across departments.

She said the approach is to "revisit the entire laundry list of everything that we fund in state government at a very granular level, to make sure that we've identified all the redundancies and inefficiencies, and then make tough decisions of what items may not rise to the level of the priorities."

Jindal's budget proposal is due to lawmakers on Feb. 27, which kicks off the start of financial negotiations with lawmakers who return for their regular session in April.

"The administration's got to solve that problem first, before they send it to the Legislature. It's a big number. Everybody's concerned," said Senate Finance Committee Chairman Jack Donahue, R-Mandeville.

The state's public colleges managed to escape the current budget year without cuts after steep reductions that stripped $700 million in state financing from them since 2008. But Nichols left open the possibility campuses could be hit with reductions next year.

"Certainly having discussions with higher education will be part of the equation," she said.

Louisiana has faced years of repeated budget shortfalls throughout Jindal's two terms in office. The national recession hit as a series of large tax breaks approved by the governor and his predecessor stripped millions from the budget. Jindal has refused to raise taxes.

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