Teachers are facing a $ 400 increase in a state budget plan that will include no spending cuts, Governor John Bel Edwards told reporters Thursday afternoon after the state received a windfall 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 starting on 1 July.
At one point, the revenue shortfall is estimated at $ 900 million. Economists were unsure how COVID-19 affected the state’s economy and feared the worst. Hundreds of millions of federal pandemic aid adjusted last year’s budget, but officials remained concerned.
Federal aid and improvement, although not fully recovered, have helped tax collections. “We’re in a better place than many thought possible,” Edwards said.
With an estimated $ 2 billion provided to Louisiana from a federal coronavirus bill passed in December and the likelihood of another federal …
And thanks to the continuation of a federal recalculation of Medicaid, the executive budget proposal, Edwards’s chief financial adviser, commissioner of administration, Jay Dardenne revealed on Friday morning at State Capital, will have no budget cuts, but more money for teachers and a increase of $ 200 for support staff, Edwards said.
The budget proposal of Edwards, a Democrat, begins months of negotiations with the Republican legislature over the state’s budget. Legislators will finalize the proposed budget submitted to the House and Senate joint hearing.
The move is part of an ongoing effort – on which Edwards has strived – to raise teacher salaries to the southern regional average. Teachers’ unions are one of the biggest supporters of the Democrat.
A large pot of money the state government gets to fund Medicaid widens the gaps in Edwards’ proposal. The health insurance program for lower-income residents and older residents is mostly paid for by the federal government, while the state starts a portion. Medicaid is responsible for one of the largest portions of the state’s annual spending.
Louisiana has $ 228 million less to spend on the billion-dollar state budget that will be drawn up in the coming months, after a state …
During the pandemic, Louisiana and every other state offered a more favorable rate for the Medicaid program by the end of the year, a more favorable rate for the Medicaid program, which released money to make holes and make the investments.
“That does not mean we are not challenged by COVID,” 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 solvable.
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 build the trust fund and prevent corporate taxation from taking effect. . This happens automatically when the trust fund falls below a certain level, but Edwards and the Republican legislature agreed to delay the tax last year.
Louisiana is expected to raise nearly $ 9.6 billion in general government tax dollars for the coming financial year, an increase over this year – but not enough to cover all the federal coronavirus aid that Edwards and lawmakers used to compile this year’s budget. to compensate.
Continued federal money that Congress has given to states to respond to the coronavirus pandemic will help fill the rest of the hole.
With an estimated $ 2 billion provided to Louisiana from a federal coronavirus bill passed in December and the likelihood of another federal …
The Joint Budget Legislative Committee will receive a more complete overview of Edwards’ budget proposal for 2021-22 on Friday. Republican leadership in the legislature has generally taken a more conservative approach to finance, expressing the desire to put money in the state’s savings accounts and preferring lower income forecasts than the governor wants.
Legislators will begin the legislative session in April and are not expected to draw up a budget until the last days of the June session.
Louisiana also has a surplus of $ 270 million in fiscal year 2019-20, but lawmakers and the governor cannot use it to pay for ongoing government spending. Under the Louisiana Constitution, 25% must flow to the state’s “rainy day fund” and 10% must pay off retirement debt. This will raise about $ 95 million that can be spent on certain constitutionally permitted one-time expenses, such as debt payments, coastal repairs, building projects or savings.
Associated Press contributed to this report