The House approved, 56-46, the state operating budget Wednesday and sent it to the Senate. It would appropriate all forecasted revenue for fiscal year 2018, but instruct state agencies to refrain from spending a combined $60 million as a precaution against midyear shortfalls.
Praised by the governor, the version was placed on the calendar by the Senate, in a five-minute session late Wednesday, for public committee hearings Thursday. Since it is nearly similar to a version passed in the final days of the regular session that died on the legislative vine in the House minutes before adjournment, House Bill 1 is expected to be approved and returned to the House Friday afternoon.
“This budget represents an overall compromise,” Gov. John Bel Edwards said late in the afternoon. “It is a responsible spending plan that reverses years of mismanagement and for the first time in a decade offers some stability to our state.”
If all goes well, the Legislature will adjourn that evening, three days before the special session expires, and provides the Democratic governor a small victory over House Republicans.
HB1, which takes effect July 1, left the Appropriations Committee Tuesday and would have appropriated $100 million less than the total revenue projection, creating a budget surplus. If projections were accurate, the money could have been appropriated in next year’s regular session through a supplemental funding bill.
Rep. Walt Leger, D-New Orleans, brought an amendment during debate Wednesday that restored the cuts made by the House Appropriations Committee, essentially mirroring the first Senate version of the plan that spent all available dollars. It reflected a Republican goal of reserving some of the appropriated funds to cover a midyear deficit.
Leger said he would support an amendment that would require state agencies to spend less than the amount appropriated to them, paving the way for several Republicans to vote for the amendment even though it distributed all the money.
“I support the concept of there being a holdback, and the commissioner of administration developing a plan to avoid midyear deficits,” Leger said. “Taxpayers would prefer we either use their dollars to provide the services we told them we’d provide, or give them back.”
Leger’s amendment met the exact 53-vote threshold for a bill to pass. Rep. Kenny Havard, R-Jackson, brought the $60 million amendment that sealed the House compromise, which then passed, 63-40.
Commissioner of Administration Jay Dardenne would identify the appropriate agencies upon which to execute the holdbacks, meaning it may not be a proportional cut.
Under the current House plan, civil service workers would get 2 percent pay raises, higher education would not take a cut, TOPS would be fully funded, psychological rehabilitation services would not halt and the Acadiana Youth Center would open.
Thirteen Republicans and two Independents joined 41 Democrats in voting for the final version of HB 1.
The final Senate version of the plan would have spent all the money and instructed agencies to withhold $50 million proportionately. The clock ran out before the House could vote on any Senate plan, although there was evidence one would have passed.
Seven days later, the difference between the proposed Senate and final House plans is essentially $10 million, or .04 of 1 percent of the nearly $29 billion budget.
A midyear deficit is still possible, however. If there is a shortfall of more than $60 million, the governor would have to make further cuts.
The bill’s author, appropriations chairman Cameron Henry, R-Metairie, had consistently argued that the Legislature cannot spend “100 percent of a wrong number” and that it’s better to withhold money initially than to appropriate it and then ask for it back in the middle of a year.
“The Revenue Estimating Conference is a reform that passed around 1990, and we’ve been beating up on it a lot for getting things wrong,” Leger said. “But its job is to estimate. They’re not going to get it exactly right. I think it’s better than picking the price of oil and budgeting based on that.”
Appropriations vice-chairman Rep. Franklin Foil, R-Baton Rouge, was called in to handle the bill three hours before the House convened after Henry rushed to Washington, D.C., where his older brother is chief of staff for Louisiana Congressman Steve Scalise, who was shot earlier Wednesday. Charles Henry was with the No. 3 House Republican when he was wounded.
“This is not my first option, but I realize this is a process,” Foil said, before voting for the amended bill.