The new year signals another fiscal cliff for Louisiana, however this year’s could be even worse.
The state faces losing it’s federal matching dollars.
State Senator Greg Tarver said this year’s budget looks bleak if legislators don’t pass a plan this session because if the state cannot meet it’s federal matching dollars, then the fiscal cliff becomes an even larger hurdle to overcome.
The fiscal cliff hits July 1. It’s an one-billion dollar deficit, however if that’s not replaced by legislators, the state cannot meet it’s matching federal dollars. So the cuts get even bigger, reaching more than three-billion dollars.
“We have been kicking the can down the road. We have used all of our spare cash we have in different accounts. Now we don’t have any money,” said State Senator Greg Tarver, (D) District 39.
He said everything is up for the chopping block this session. Including the TOPS scholarship program.
“All programs are on the table with the most horrible thing is going to be cuts to higher education and higher education cannot afford to be cut. We’re telling the people of Louisiana we should send out kids to Louisiana schools and then we go around and cut them. That’s not right,” Tarver said.
“Parents and students won’t know what their tuition is going to be, how much TOPS will pay towards the tuition,” said Governor John Bel Edwards, (D).
Governor Edwards has a few days to decide whether to call a special session in February before the regular session starts in March. However, he said he won’t call one unless there’s some agreement beforehand between him and legislative leaders.
“We’ve been waiting for literally two years to get a plan from the legislature. If that doesn’t change then we’re just not going to have a session,” Edwards said.
Senator Tarver said cuts are on the horizon but he hopes some corporate exemptions are one of them.
“We’ll have to look at the exemptions we have on pennies, we have exemptions on companies, we’ll have to take some of those certificates back. Fund government how it should be funded,” Tarver said.
One of the issues a part of the fiscal cliff is the penny sales tax that’s set to expire in June.
Senator Tarver said that tax is not enough to pull the state out of its problems so there’s a lot of work ahead.