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Louisiana’s Landry wants 7% cut to state’s budget in first recommendation

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(The Center Square) — Gov. Jeff Landry’s first budget presentation to the Legislature this week focused on public safety with $3.3 billion less spending than the current fiscal year.

Landry told the Joint Legislative Committee on the Budget on Thursday that increased spending in recent years was tied largely to federal pandemic funding that’s now fading away, and his proposed budget for the fiscal year that begins July 1 “right-sizes our state’s fiscal affairs.”

“I believe this proposed budget makes significant progress towards conservative stewardship of our state’s finances,” Landry said.

“We all know a growing and thriving economy is what actually produces strong state revenue,” he said, noting Louisiana lags most states in growth of gross domestic product. “I … am focused on turning this state around. … In order to do that, we need to make some structural reforms.”

In addition to the loss of federal COVID funds, a temporary 45-cent sales tax is slated to sunset, resulting in an overall projected shortfall of about $550 million a year starting in the next fiscal year.

“I am hopeful that if we stay the course on certain structural reforms, and we work real hard at economic development, and we focus on our industries and businesses that built this state, I believe we can turn that red number into a black number in a couple of years,” Landry said.

Overall, Landry aims to cut spending from $47.5 billion to $44.2 billion, or roughly 7%. The bulk would come from a $2.4 billion reduction in federal funds, while the proposal would cut state general fund spending by $230 million, or 1.88%.

The budget would devote 47% or about $5.6 billion of state general fund spending to education, another 29% or $3.5 billion to human resources, 12% or $1.4 billion to public safety, 9% or $1.1 billion for general government, 2% or $252 million for business and infrastructure, and 1% or $68.4 million to the environment and natural resources.

Funding for most state agencies would remain relatively flat under Landry’s proposed budget, with the biggest increases going to the departments of Health ($200 million), Corrections ($62 million), transportation ($24.7 million) and public safety ($6.7 million).

Categories and departments with the biggest reductions include higher education ($104 million), executive ($36 million), and economic development ($19.8 million).

Budget officials noted that many departments with budgets less than the current fiscal year were offset by savings from the Legislature’s investments in paying off unfunded accrued liability in the state’s pension systems.

The proposal would extend $198 million lawmakers spent on stipends for K-12 teachers, with the recommendation to target the funds to hard-to-fill positions and rural areas. Another $127.1 million would go toward acquisitions and major repairs, and $62.8 million to match federal funds for transportation projects.

Other major line items include $32.4 million for state police, $5.7 million for drug court funding, a $3.8 million increase for per diem for non-secure juvenile care providers, $14.5 million for the Department of Children and Family Services, $1.7 million for veterans affairs, and $2.3 million for the attorney general to oversee Project NOLA.

Project NOLA is a collaborative effort between Attorney General Liz Murrill and District Attorney Jason Williams to address violent crime in New Orleans.

Landry’s proposal also included plans for $325 million in surplus from fiscal year 2022-23 and about $90 million in excess from 2023-24. About $113.8 million of the surplus is constitutionally mandated to go to the Rainy Day Fund and unfunded accrued liability, leaving about $211.5 million for lawmakers to appropriate.

With the excess, Landry wants to spend $9.7 million on state police, $11 million on extra security for secure care facilities, $15 million on wildfire expenses, and $31 million for operations, overtime, food and supplies at the Department of Corrections.

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