Senate panel questions budget passed in House

BATON ROUGE — The Senate Finance Committee on Friday questioned a Republican budget passed by the House that would fully fund hospitals for the poor but slash funding for other health programs by $116 million.

Including federal matching dollars, the total cuts to Louisiana Department of Health would amount to over half a billion dollars, compromising mental health services and substance abuse treatment programs when temporary revenue measures expire on July 1.

“We can’t continue to cut and appropriately meet the needs of the people of this state,” said Health Secretary Rebecca Gee.

The hearing illustrated the continuing divide between House Republicans, who are focused on cutting the size of state government, and many senators, who want to raise more revenue to avoid cuts in health care and the TOPS scholarship program.

Leaders from both chambers are negotiating with Gov. John Bel Edwards, a Democrat, to see if a compromise to resolve a projected $648 million shortfall in the state budget can be reached before the special session ends on Monday. Both houses plan to return on Sunday for possible votes on the major revenue and spending bills.

Sen. Regina Barrow, D-Baton Rouge, told Gee that “at the end of the day, we’ll end up spending much more money if we don’t provide funding for these services.”

“You cannot take any more cuts,” she said, adding that the Health Department had been “cut drastically over the past 10 years.”

The House budget, authored by Rep. Cameron Henry, R-Metairie, and the chairman of the House Appropriations Committee, would slash the popular TOPS scholarships by 10 to 20 percent depending on how much revenue legislators end up raising.

Uncertainty over TOPS funding has prompted some top Louisiana high school graduates to take scholarships at out-of-state schools. Currently, there are around 50,000 students who receive TOPS.

Jim Henderson, president of the University of Louisiana System, told the committee that cutting TOPS “will be a financial hardship for students who have already fulfilled all of the criteria that the state of Louisiana has given them to earn TOPS.”

“In my opinion, it’s a moral imperative that we find a way, as much as we can, to fulfill the TOPS promise for students,” he added.

The House budget also includes $24 million in cuts to the Department of Corrections. The reduction would mainly affect local sheriffs, who currently house more than half of the state’s inmates in parish jails.

If these cuts are made, sheriffs would have to send thousands of inmates to overcrowded state facilities, state officials said. That could force them to release inmates early and raise the chance of litigation due to inability to accommodate inmates.

The full Senate is scheduled to discuss the House budget along with revenue-raising bills on Sunday.

Referring to the possibility of a deal to resolve the budget woes that have plagued the state for several years, Sen. Eric LaFleur, D-Ville Platte and the chairman of the finance committee, said: “We know what the solution is.”

But, he added, lawmakers “just haven’t gotten to the point where we make that vote, which will be in the next couple of days.”

The Senate is expected to take up on Sunday a bill by Rep. Lance Harris of Alexandria, the leader of the Legislature’s Republican delegation, that would extend one-third of the penny of state sales tax that is set to expire July 1.

The state’s portion of the sales tax is now 5 percent. Harris’ bill would change it to 4.33 percent rather than letting it drop to 4 percent.

Some Republicans do not want to extend even a third of a cent of sales tax. But Harris said he had offered the bill as a compromise to raise $365 million in revenue.

After the bill passed the House, it was heavily amended by the Senate Revenue and Fiscal Affairs to make the tax hike permanent rather than for just five years and to eliminate tax exemptions for various industries.

The Senate’s version of the bill would raise $642 million in revenue, $277 more than Harris intended. But that would still be $6 million short of the amount that Gov. Edwards has sought.

An earlier special session to try to resolve the budget issues collapsed in March, and if no budget is in place by Monday, this special session would end in failure as well.

Gov. John Bel Edwards would then have to call another special session, the third for this year and the seventh since February 2016, because the Legislature needs to pass a budget before the new fiscal year starts on July 1.

Some lawmakers want to see the Legislature address structural deficiencies in the state’s tax system. But after 2 ½ years of both special and regular sessions, lawmakers are still discussing temporary measures to address the persistent problems.

The cost of each special session for taxpayers ranges between $50,000 and $60,000 per day.

PHOTO: Rep. Cameron Henry, R-Metairie and chairman of the House Appropriations Committee, proposed the House budget that would cut health programs and TOPS funding. (Photo by Sarah Gamard / LSU Manship School News Service)