Top aides to Governor Bobby Jindal laid out specifics of the nearly $25 billion operating budget the governor is proposing for the fiscal year beginning July 1, and it calls for $1.2 billion less in spending, but not the devastating cuts higher education had feared.
Commissioner of Administration Kristy Nichols presented the proposed spending plan in a legislative committee room that had every seat in the audience and on the legislative dais filled.
The state has a $1.6 billion dollar hole to fill in terms of revenues and the problem was not helped by the drop in oil prices.
Jindal wants to eliminate 727 state jobs, but the vast majority are already vacant. Nichols said less than 70 are filled.
The governor also proposes reigning in the ballooning costs tied to some state tax credits. It would be done by converting some refundable tax credits to non-refundable, a move that would reduce expenses by $ 526 million.
"Last year Louisiana paid more than $589 million to companies and individuals as a result of refundable tax credits, and that is the portion that is above the overall tax liability. This budget includes changing some of the refundable tax credits to non refundable," said Nichols.
The administration said over the past four years, all refundable tax credits grew over $515 to almost $777 million.
"We cannot pay more than we take in," Nichols continued.
It is an idea that many state lawmakers applaud.
One senator said the state does not want to be in a position to have people accuse it of issuing corporate welfare.
The proposed tax credit reform converts 12 tax credits to non-refundable scaling back $526 million in tax credits.
The tax credits that would be affected are for the following: inventory tax, wind and solar, research and development, ad valorem for offshore vessels, musical and theatrical, telephone co-property tax credit, ad valorem for certain natural gas, vehicle conversion to alternative fuel, sugar cane trailer conversion, milk producers, Angel investor, and historic residential rehab.
Some lawmakers breathed a sigh of relief but said more work must be done when the budget is tweaked by the legislature.
"The idea that they did not touch the income tax credit which we know helps working families, the idea that we don't see the draconian cuts to higher education that were talked about," said Rep. Wesley Bishop, D-New Orleans.
The TOPS college tuition program remains fully funded in Jindal's proposed budget, and even though the blow has been softened a bit higher education and state funded health care would still have to make do with less funds for fiscal year 2015-2016.
"It could have been a lot worse had not the governor made some proposals to try to find some additional revenues," said State Senate President John Alario.
Still some state lawmakers from New Orleans balked at the proposed elimination of $7.7 million dollars in state funds for the Greater New Orleans Community Health Connection Program. They said the fallout would be much greater in terms of matching funds.
"It's a particular type of health network that we have, and this provides funding for 41 sites throughout our area, in St. Bernard, Jefferson and Orleans Parishes and this will affect about 53,000 people who use these particular clinics and now we're trying to figure out which ones may actually close because of the elimination of this funding," said Rep. Helena Moreno, D-New Orleans.
Moreno said the state puts in $7.7 million and then it is matched 3-to-1 by federal dollars, so it is actually about $30 million that will be lost for the clinics.
Jindal's budget also makes college tuition increases an option and Nichols said the administration could support an increase in the state cigarette tax but there is a catch. State lawmakers would need to come up with a tax break to offset the that tax increase.
"That will be one of the challenges the legislature faces to meet the governor's criteria of not having any tax increases, if we can offset it with some kind of tax credit that maybe was going someplace and costing the general fund monies and swap it out for an increase in the tobacco tax that may work, may satisfy our needs for additional general funds and satisfy his obligation of not raising taxes," said Alario.