Louisiana House committee passes budget that closes $200 million shortfall without raising taxes

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2 days ago

BATON ROUGE — The House Appropriations Committee advanced a $49.4 billion state budget Monday that funds $2,000 teacher stipends for next year, closes a nearly $200 million shortfall and balances the books without raising taxes.
To bridge the budget gap, lawmakers pieced together a solution using a mix of cuts, delayed spending and the discovery of unspent or underutilized funds tucked away in various agencies.
This included clawing back excess appropriations, redirecting one-time revenues and freezing certain state expenditures. Some of the savings came from blocking state vehicle purchases and combing Medicaid rolls to remove people who have moved out of state.
The committee's approach not only avoided tax hikes but also safeguarded critical areas like education and healthcare.
The effort won praise from both sides of the aisle, with Republicans applauding the fiscal discipline and Democrats recognizing the protection of key public services and the funding of teacher stipends.
At the heart of the plan is House Bill 1, the state's main operating budget authored by Appropriations Chairman Jack McFarland, R-Winnfield.
The bill, originally submitted by Gov. Jeff Landry as a standstill plan, was overhauled to address the shortfall and fund the $2,000 stipends for teachers and $1,000 for school support staff, including charter school employees,
The stipends that were in jeopardy after Louisiana voters rejected a constitutional amendment in March that would have secured a permanent funding source for the stipends.
'In tough times, families tighten their belts,' McFarland said in a news release. "We made sure the state government did the same — responsibly, and without asking more from taxpayers.'
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The final package included a series of cost-saving measures.
Lawmakers blocked $91 million in vehicle and equipment purchases for state agencies, cut $26.3 million in Medicaid spending by removing ineligible recipients and saved $20 million through a statewide hiring freeze ordered by Landry.
They also used state reserves to pay down $148 million in retirement debt for the State Police system, generating $25.5 million in interest savings, and eliminated 'high-dosage' tutoring programs, freeing up an additional $30 million.
'We balanced the budget, protected taxpayers, and made government more accountable. And we're just getting started,' said House Speaker Phillip DeVillier, R-Eunice. 'These cuts lay the groundwork for long-term reform and financial stability.'
The committee also kept intact Landry's request for $94 million in funding for the new Louisiana GATOR program, an education savings account initiative that allows families to use public funds for private school tuition and other non-public education expenses.
The program is a key part of Landry's school choice agenda and is expected to launch in phases. It is controversial among some education advocates and rural lawmakers, who say it could eventually drain money from public schools.
McFarland acknowledged the teacher stipends are being funded with one-time dollars and that a long-term solution remains elusive.
'Until then, this is what we had to do, but I don't want to have to do it again,' McFarland said.
Democrats praised the bipartisan work needed to achieve this bill.
"I want to thank the chairman and administration and everyone who has worked on getting these amendments done, particularly for teacher stipends,' Rep. Denise Marcelle, D-Baton Rouge, said. 'Thank you for looking under tables and around the corners.'
Rep. Jason Hughes, D-New Orleans, the vice chairman of the House Appropriations Committee, noted that early childhood education funding remains untouched and pointed to new investments in public safety.
Gov. Landry's hiring freeze is expected to save $20 million annually and is seen as a way to preserve healthcare and education spending without deeper cuts.
'The public should know this budget represents no cuts in services,' Hughes said. 'We found surpluses elsewhere. But this is just one step in a very lengthy process.'
The budget increases spending by $7 million for domestic violence shelters under the Department of Children and Family Services.
The budget also reduces dedications from the State General Fund and officially ends remote work for state employees.
If HB1 passes the House as expected, it will move to the Senate Finance Committee for further deliberation.
The committee also advanced other key budget bills.
House Bill 460 allocates $148.8 million in surplus funds to pay down State Police retirement debt, saving $25.5 million in interest compared to the original plan to spread the money across four systems.
House Bill 461 sends 25% of the 2023–2024 surplus to the Budget Stabilization Fund and authorizes emergency spending.
House Bill 463 funds ancillary agencies without tapping the State General Fund, while House Bill 647 finances the judiciary. Additional allocations in the budget include $7 million for domestic violence shelters under the Department of Children and Family Services. The budget also reduces dedications from the State General Fund and officially ends remote work for state employees.
This article originally appeared on Lafayette Daily Advertiser: Louisiana House Appropriations Committee passes budget, closes shortfall