Baton Rouge - Today, Gov. John Bel Edwards released his plan to eliminate the $304 million budget shortfall for the current fiscal year. The plan includes using the state’s Budget Stabilization Fund, also known as the Rainy Day Fund, as well as other strategic budget adjustments. The legislature will convene in a special session beginning Mon., Feb. 13 to address the shortfall. Gov. Edwards’ plan does not include raising additional taxes or fees.

“As we drafted this plan, my administration sat down with every agency to identify where budget adjustments could be made to ensure that the priorities identified by the legislature in this year’s budget were funded,” said Gov. Edwards. “With only four months left in this fiscal year, adjustments of this magnitude are difficult. We have gone line-by-line in the state budget to identify cuts and other state general fund reductions, including identifying funds that could be moved to other areas of the budget. In our view, this is the most responsible approach to solve this shortfall until we can make structural budget changes in the regular session. If members of the legislature choose not to use the Budget Stablization Fund, which was intended for this very purpose, priorities that are currently protected will be exposed. I look forward to working with every member in the upcoming session to lessen this burden on Louisiana families.”

Gov. Edwards’ plan includes cuts across a broad spectrum of the state budget, which requires a vote of the full legislature. Without the special session, these cuts would be concentrated to the Louisiana Department of Health, higher education, K-12 education and the Department of Corrections, according to the Louisiana Constitution. As promised, Gov. Edwards’ plan does not include cuts to K-12 education (the per pupil allocation of the MFP), higher education, TOPS, waiver programs, the Department of Corrections or the Department of Children and Family Services.

The highlights of Gov. Edwards’ plan include (* indicates items that can only be addressed by the full legislature during a special session):

  • Use of the Budget Stablization Fund - $119.6 million*
  • 2.5 percent reduction of state general fund to the judiciary - $3.79 million*
  • 2.5 percent reduction of state general fund to the legislature - $1.65 million*
  • Excess funds from the Louisiana Legislative Auditor to construct a new office building - $8 million (This reduction does not impact the operations of the agency)*
  • Attorney General’s escrow account balance - $3.98 million
  • 5 percent reduction in statutory dedications from the Attorney General - $1.9 million
  • Reduction in statutory dedications from the Department of Transportation and Development - $1.46 million
  • The Louisiana Department of Health - $127.8 million in reductions and adjustments

The complete plan with detailed explanations of each budget adjustment from Gov. Edwards is available by clicking here.

Prior to Gov. Edwards taking office, the state’s Rainy Day Fund has been used to stabilize the budget four times over the past eight years for a total of $517.4 million. Those funds were used to eliminate budget shortfalls and were combined with various one-time funds to pay for recurring expenses. 

Additional facts regarding the FY 17 budget:

  • The FY17 budget was crafted without any one-time money, necessitating $800M in recurring dollars; thus, the FY17 budget fell $326M short of funding expenditures necessary to maintain real FY16 spending levels.
  • The FY17 budget already has been adjusted by $313M to resolve the FY16 deficit.
  • The FY17 budget does not include any funds for flood related expenses; departments and agencies have advanced $246M in unbudgeted dollars for flood response; ninety percent will be reimbursed by the federal government but mostly not in this fiscal year.