Teachers are on the verge of a $ 400 salary increase in a state budget plan that will not contain spending cuts, journalist John Bel Edwards told reporters Thursday afternoon after the state received a heart of 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 July 1.
At one point, revenue deficits were estimated at $ 900 million. Economists were unsure of how COVID-19 influenced the state’s economy and feared the worst. Hundreds of millions of federal pandemic aid repaired last year’s budget, but officials remained concerned.
Federal aid and improvement, although not fully recovered, contributed to tax collection. “We’re in a better place than many thought possible,” Edwards said.
With about $ 2 billion provided to Louisiana from a federal coronavirus aid bill passed in December and the likelihood of another faith …
And thanks to a continuation of a federal Medicaid recalculation, Edwards’ executive budget proposal, chief financial officer, commissioner Jay Dardenne, will reveal on Friday morning at the State Chapter will have no budget cuts, but more money for teachers and an increase of $ 200 for support staff, Edwards said.
The budget proposal of Edwards, a Democrat, begins a month-long negotiations with the Republican-led legislator on the state budget. The legislators will solve the proposed budget presented in the joint sitting on the budget of the Chamber and the Senate.
The move is part of an ongoing effort – which Edwards has campaigned for – to bring teachers’ salaries to the southern regional average. Teachers’ unions are among the biggest supporters of Democrats.
A huge amount of money the state receives from the federal government to fund Medicaid covers the gaps in Edwards’ proposal. The health insurance program for lower income and elderly residents is mostly paid for by the federal government, and the state gives a portion. Medicaid is one of the largest parts of the state’s annual spending.
Louisiana will have to spend $ 228 million less on the billion-dollar state budget that will be drawn up in the coming months, according to statistics …
During the pandemic, the federal government offered Louisiana and any other state a more favorable “fit” rate for the Medicaid program by the end of the year, freeing up money to make holes and make investments.
“That doesn’t mean we’re not caused 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 solvent.
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 strengthen the trust fund and avoid corporate taxes. This happens automatically when the trust fund falls below a certain level, but Edwards and the Republican-led legislature agreed to postpone these fees last year.
Louisiana is expected to raise nearly $ 9.6 billion in general state taxes for the next fiscal year, an increase over this year – but not enough to offset all the federal coronavirus aid that Edwards and lawmakers used to share. this year’s budget.
Continuing the federal money that Congress has given states to respond to the coronavirus pandemic will help fill the rest of the hole.
With about $ 2 billion provided to Louisiana from a federal coronavirus aid bill passed in December and the likelihood of another faith …
The Joint Legislative Committee on the Budget will receive a fuller description of Edwards’ 2021-22 budget proposal on Friday. The Republican leadership in the Legislature has generally taken a more conservative approach to finance, expressing a desire to put money in the state’s savings accounts and opting for lower-income forecasts than the governor wants.
Parliamentarians begin the legislative session in April and do not expect to complete a budget until the last days of the June session.
Louisiana also has a surplus of $ 270 million left over from the 2019-20 budget year, but lawmakers and the governor cannot use this to pay ongoing state spending. According to the Louisiana Constitution, 25% must go to the state’s “rainy day” fund and 10% must pay their retirement debt. This will leave about $ 95 million, which can be spent on certain single constitutionally permitted expenses, such as debt payments, coastal restoration works, construction projects or savings.
The Associated Press contributed to this report