Louisiana’s General Fund Faces Shortages After One-Time Money Expires

Blue Skies At The State Capital Building Baton Rouge Louisiana
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BATON ROUGE (The Center Square) — Lawmakers on the Joint Legislative Committee on the Budget received updates this week from several state departments regarding a variety of issues, including the state’s general fund, a $100 million state settlement, charter school accountability and unemployment insurance.

Officials with the Office of Planning and Budget told lawmakers on Tuesday the state’s projected general fund balances for coming fiscal years are expected to be $808 million in the red for 2024, negative $373 million in 2025, and negative $805 million in 2026.

The shortfalls are due to one-time expenses in 2024 totaling $553 million, including $358 million for a final payment for the Hurricane and Storm damage Risk Reduction System and $194 million in closeout payments to FEMA from Hurricane Katrina.

Another $286 million in funding for enhanced federal Medicaid money available in 2023 also will not be available in 2024, while the expiration of a 45 cent sales tax is scheduled to phase out in 2026.

Commissioner of Administration Jay Dardenne also provided an update on the status of a state settlement for 1,246 victims, 400 families and 96 businesses in Tangipahoa Parish impacted by flooding caused by the building of Interstate 12 in 1983.

Dardenne said an escrow account for the settlement currently holds about $21 million from appropriations over the years, while another $50 million appropriated from fiscal year 2022 and another $30 million from fiscal year 2023 are awaiting transfer by the state treasurer.

Some of that money requires approval from the state’s Revenue Estimating Conference as well as the joint budget committee, which is expected to occur next month. The total settlement is $101.5 million, an agreement that was approved by the joint budget committee Tuesday.

Other highlights from the meeting include a presentation from the Legislative Auditor’s Office and education officials on the status of charter schools complying with state law requiring them to serve economically disadvantaged students.

Results of an LLA audit show about 21.3% of the state’s charter schools were not in compliance with the law in the 2016-17 school year, a figure that has since fallen to 10.3%.

For charter schools authorized by the state Board of Elementary and Secondary Education, the current figure is 7.5%, or 3 out of 40 schools. About 12% of locally authorized charter schools are currently not in compliance, or 8 out of 67 schools, officials said.

Caroline Roemer, executive director of the Louisiana Association of Public Charter Schools, put the figures in perspective for lawmakers.

“We talked about something like the world is on fire and it’s not,” she said. “As has been brought up, go look at the data, you will see some of those can be literally the case of missing it by two students.”

The meeting concluded with a presentation from the Unemployment Insurance Administration.

Robert Wooley, assistant secretary for the administration, told lawmakers a $500 million appropriation has brought the balance of the unemployment trust fund to more than $835 million.

“Our payments of benefits … have been rising slowly in the summer months,” he said. “They had gone down to about $1.5 million a week, and they’ve only moved up to like … an average of about $2.2 million a week. And that’s still below what we were paying out per week average prior to the pandemic, which was about $3 million a week.”

By Victor Skinner for the Center Square

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