When Gov. John Bel Edwards presents his budget recommendations to the Legislature on Friday morning, it will be a stark contrast from the last time he directly addressed the Joint Legislative Committee on the Budget in 2018. Five years ago, steep program cuts were being proposed because of a revenue shortfall precipitated by tax cuts signed by previous governors. Edwards and the Legislature eventually stabilized the state’s finances, and today state revenues are the strongest they’ve been since the eve of the Great Recession. But the federal pandemic aid that has boosted Louisiana’s economy is mostly gone, prospects of a future recession are increasing, and Louisiana faces a massive fiscal cliff in 2025. The Center on Budget and Policy Priorities offers advice on how states can prepare for an economic downturn:

Recessions are especially harmful to states because state leaders, unlike their federal counterparts, must balance their budgets each year, even when revenues are down. And unless they offset these revenue drops with targeted tax hikes or by using other fiscal planning tools such as rainy day funds, they must make sizable cuts in essential services that could prompt teacher layoffs and growth in class sizes, less access to affordable health care or child care, deferred maintenance on roads and other vital infrastructure, and cutbacks to libraries, senior centers, and other local services. … In addition to the threat of a recession, states will also have to contend with the effects of major federal relief measures winding down in the next few years. 

Legislators should also be wary of any election-year tax cut schemes that could rip a hole in the state budget. 

Early education funding matters
A family’s access to quality, affordable early care and education can play a huge role in a child’s future. But the programs that develop young brains must be funded in the present. Louisiana’s early care and education system is currently being supported by $200 million in temporary federal funding that needs to be replaced next year with state funding. One Acadiana’s Troy Wayman, in a letter to The Advocate, explains why he and other early education leaders are urging lawmakers to prioritize the state’s youngest minds in upcoming budget negotiations. 

The Early Childhood Care and Education Commission is asking the Legislature to appropriate $315 million to early care and education this year — $200 million to prevent 16,000 children from losing access and $115 million to expand access to 9,000 more in-need children from birth to age 3. This is a critical need for our state, which loses $1.3 billion in economic activity every year due to child care breakdowns, and in which only 40% of kindergarteners arrive at school ready to succeed. Nearly 85% of a child’s brain develops by age 3, which is why One Acadiana, United Way of Acadiana, Ochsner Lafayette General, and Our Lady of Lourdes announced an initiative to educate all new moms in Acadiana on the importance of building their babies’ brains.

State drops lawsuit against Road Home grantees
Louisiana’s Road Home program, created in the wake of Hurricane Katrina, provided grants that people could use to elevate their property to reduce the risk of future flooding. But the state sued some grantees who used their grants – with verbal approval from program officials – for other repairs. Last June the state paused its efforts after ProPublica, The Advocate | The Times-Picayune, and WWL-TV reported on the lawsuit. WWL’s David Hammer and Verite’s Richard Webster report that the state has dropped the lawsuit. 

Commissioner of Administration Jay Dardenne, an appointee of Gov. John Bel Edwards, said Monday that the state has agreed to settle a related lawsuit against a company that ran the recovery program after Hurricane Katrina. If the federal government approves that agreement, he said, the state would drop the suits against homeowners who didn’t follow the rules on how they spent elevation grants. Dardenne said he was troubled by evidence gathered by the news organizations showing that the law firm Shows, Cali & Walsh, which represents the state, has accelerated its efforts to collect tens of thousands of dollars from each homeowner.

Cuts to food stamps enter debt ceiling demands
Congressional Republicans are now targeting cuts to federal food assistance as a condition of agreeing to let the country pay its debt obligation. The Supplemental Nutrition Assistance Program (SNAP) is one of the most effective tools at fighting poverty, but some GOP lawmakers are upset by changes to the program that have allowed more families to escape food insecurity. The Washington Post’s Tony Romm explains how cuts to SNAP as part of Republican debt ceiling demands would come at the worst time for the roughly 41 million Americans that receive federal food aid. 

The move could send some SNAP recipients’ monthly allotments plummeting by an average of $82 each month starting in March, according to the Food Research and Action Center, an anti-hunger advocacy group. The looming cut stands in stark contrast to federal inflation indicators released this week showing that food prices remain on the rise. “We are strained to the breaking point with a major increase in demand coming next month,” said Vince Hall, the chief government relations officer for Feeding America, a nonprofit network of more than 200 food banks that provided more than 5 billion meals last year. “It is deeply disturbing to contemplate even further reductions to the SNAP program.”

Number of the Day
65% – Percentage increase in median wage for Louisianans with a bachelor’s degree or higher compared to those with a high school diploma. (Source: Economic Policy Institute via LBP’s State of Working Louisiana report)