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Walsworth predicts budget cuts on horizon
Lower gas prices may be a welcome occurrence for motorists in Louisiana, but it will affect the state budget, state Sen. Mike Walsworth said.
"You may not like $4-a-gallon gas, but our budget does," said Walsworth, who spoke Monday at the Ouachita Parish Women's Republican Club's regular meeting.
"The lucky part right now is it's probably at what we already budgeted, which is around that $70 (a barrel) mark," Walsworth said.
For every dollar increase in a barrel of oil over a 12-month period, there is an increase in about $10 million in revenues for the state, Walsworth said.
"So, if we're budgeting it at $70 and it stays at $90 for 12 months, that's $200 million," he said. "That's a lot of money."
Walsworth, however, said the state is facings some tough times ahead budgetary wise in light of a recent drop in price of oil.
While the state currently enjoys a roughly $1 billion in surplus in the current fiscal year, most of the additional revenue surfaced because of a robust oil and gas industry and the taxes it generates for the state.
Over the summer, price for a barrel of oil rose above $140. Today, though, it is roughly $70 a barrel.
That means the state could have some budgetary problems in the near future, according to Walsworth.
"It does look like our budget may run into some problems in this next fiscal year," Walsworth explained. "We made $450 million in tax cuts during that last regular session, so we'll have less money. That is not bad; it is good. The best budgets that I've seen in my 13 years (in the Legislature) are those where we had to make decisions on what was a priority in this state. That's what we're going to have to do, and that's the best way to do it."
Walsworth said he prefers setting priorities for state spending in the same manner that businesses and families handle their own budgets.
"It's better for us as a state and better for us as people," Walsworth continued. "Families do that every single day. They look at how much they have coming in and set their priorities.
"Families do that, but government doesn't. When we have a budget crunch, like we'll have this coming year, we will do that. We will determine the priorities of this state."
Much of the state budget includes constitutionally mandated expenses. Thus, state law requires that those areas be funded. Two areas that are not mandated are higher education and health care. They are typically the areas that face cuts whenever there's a budget crunch.
One of the main budgetary concerns right now entails possible cuts for the Department of Health and Hospitals, according to Walsworth.
"They've been before the joint budget committee twice in the last two months, looking for authority to cut their budget," he said. "We've resisted, and now it looks like we're going to wait until after the national elections."
Regarding cuts during the next legislative session, Walsworth said all programs will be on the table. However, he doesn't believe education will take much of a hit.
"I think education is one of the priorities that we have, and I don't think you'll see many cuts there," Walsworth said. "But, some of these other programs that we have … some we've started in the last year or so, we may look at cutting those.
"With healthcare, we may have started some new programs that we might cut back on, but overall I don't think you'll see a whole lot of cuts. We'll just have to wait and see where we go."
There has been some discussion about the Legislature convening a special session after the first of the year, but Walsworth expects the Legislature won't meet until the next regular session in April.
That session will focus exclusively on fiscal matters. |
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