Even with an additional $1.52 billion in taxes raised in the special sessions, the state will still have an overall budget shortfall of approximately $340 million.
Of course, legislators began the first special session facing huge budget deficits thanks to the fiscal gimmickry of former Governor Bobby Jindal. His administration used a plethora of “one-time money” to pay for recurring expenses. When the special funds could not be raided anymore and the price of oil collapsed, a budget disaster was created.
Unfortunately, the legislature did not eliminate the almost 19,000 consulting contracts that are in place. Incredibly, a large percentage of these contracts are with firms and consultants who reside outside of Louisiana. Kennedy has highlighted some of the most ridiculous contracts such as the ones for expensive artwork or a reception at the Paris Air Show.
Despite the cuts to TOPS and other programs, per capita, the state still spends more money and has more employees than our neighbors in the South.
Long term budget structural change will be needed as well as tax reform. Currently, the middle class and the poor are bearing the brunt of the additional taxes. After the sales tax increase in the first special session, Louisiana became the state with the highest sales taxes in the country, a horrible distinction.
While there have been controversies and scandals in some areas of state government, one program that has worked well since its inception is TOPS (Taylor Opportunity Program for Students).
The scholarship program recruits the best and brightest students to stay in Louisiana. High school students are challenged to maintain a 2.5 grade point average and achieve at least a 20 score on the ACT to qualify. Once a college student, they must maintain at least a 2.5 grade point average to retain the scholarships.
The best feature of the scholarships is that it keeps students in the state for college, keeping them closer to families and creating more opportunities for them to remain in the state upon graduation. Students who attend college in Louisiana are more likely to establish roots in the state, and find employment here, which helps stem the out-migration flow of people from Louisiana.
After the failure of legislators to retain full funding for the program, students will undoubtedly leave LSU and other state universities for opportunities in other states. According to Higher Education Commissioner Dr. Joe Rallo, “The better students, students with 28, 29, 30 ACTs are already being courted by Mississippi and Alabama and Texas. They’re allowing them to pay in-state tuition, so they are already leaving us.” Undoubtedly, students with lower ACT scores will also leave as these cuts will leave parents and students to face an additional bill of $2,100 to cover tuition costs this year.
Many parents are facing the same constraints as Louisiana state government with not enough income and too many budgetary needs. Like other states, wages in Louisiana are stagnant and for middle class families, costs in healthcare and other areas of their budget are skyrocketing. This unexpected and unwelcome tuition bill increase will hurt our working class families the most. Some will not be able to send their children to state universities at all, while others will send them out of state to universities with more attractive scholarship options.
The bill passed in the legislature postpones the TOPS cuts until the spring, but the Governor may veto that provision. Either way, the program is only funded at 70%, which is the largest cut in the history of TOPS.
While other areas of the budget also faced cuts, juvenile detention and rehabilitation services ($14.5 million), state prisons ($25.6 million), K-12 education ($24.2 million), TOPS received the brunt of the cuts with a staggering $87.8 million removed from the budget for the next fiscal year.
It is a real travesty that a program that is so popular and so successful would have been the main target of cuts in this legislative session. Hopefully, the funding for the program can be restored next year for the consequences of decimating TOPS will be severe.