State Has Big Red Ink Problem
by JIM BEAM - The American Press (excerpt)

Members of the Louisiana Legislature who voted to spend almost every extra dollar laying around last June have to be second-guessing themselves today. They knew the state was facing a “financial cliff,” but state Senators took the easy way out when when they padded the budget with onetime money. A better option would have been to go along with a reduced, House-passed state budget that took into account the realization that darker days were coming. Now, those days have arrived.

State officials announced Tuesday that last year’s budget fell short of funding by $108 million. Since that fiscal year has ended, the cuts have to be made in the current year’s spending plan. The last time the state ended a fiscal year in the red was in the 2001-02 budget year, according to a report in The Advocate of Baton Rouge. The shortage back then was only $33.9 million. Two other developments have compounded the financial situation. The current Medicaid budget may be short by $50 million. And a pending lawsuit could mean the state will have to cut another $200 million on top of the $108 million and $50 million. That is over $350 million in possible cuts in what has already been a lean year. The lawsuit claims the Legislature should have immediately paid back $198 million it took from the rainy day trust fund to balance this year’s budget. Observers and some legislators believe the suit has merit.

Lawmakers used nearly $2 billion in one-time money to balance the current year’s budget. Speaker of the House Jim Tucker, R-Algiers, said in Monroe last month, “We’ve used all of the existing funds — against the will of the conservatives in the House ...”