After much discussion, legislators came to a deal that closed the current year budget shortfall through a combination of Rainy Day Funds and cuts to state spending.
On Feb. 3, Governor Edwards called for a special session of the Legislature to address the state's projected current-year budget shortfall of $304 million. Special session will convene on Feb. 13 and end no later than Feb. 22.
Over the weekend, the Louisiana Legislature approved HB 1, the state's budget, passing it to Governor Edwards to sign into law. While it did not change much from the version approved by the Senate only a week ago, it is very different from the original bill developed by the Governor.
We are pleased to announce that the Governor and our legislators mitigated the worst of the potential budget cuts facing LSU this fiscal year. In fact, they were successful in eliminating cuts to our state general fund. LSU now faces covering a $10 million TOPS shortfall, which is a significant portion of the overall $28.3 million TOPS deficit. Since this cut applies to the current year, these funds will have to be found by June 30.
Yesterday, the Revenue Estimating Conference recognized new revenue generated from the special session, but the state's budget is still approximately $66 million short for the current year. We expect to be notified of the actual cuts to higher education and to LSU, specifically, early next week. It is important to remember that we simply don't have the official numbers yet, but we know the Governor and others are working to mitigate any cuts to higher education. The Legislature also could take some actions to mitigate the cuts, but that window of opportunity is closing rapidly.
Special Session adjourned at 6 p.m. yesterday, and while there was a flurry of activity before sine die, the budget shortfall for the current fiscal year was not completely resolved. While we don't know the exact numbers just yet, the Governor's Office will share official results with us as soon as they become concrete. In turn, as soon as we are able to determine the impact of these cuts, we will reach out to the campus community with specifics.
This week brought both good and bad news from the Capitol. The good news is that the Senate identified funds to help offset a portion of cuts and the House of Representatives approved a cigarette tax that will generate revenue and lessen the budget shortfall.
In spite of significant legislative action over the past two weeks, the current year budget shortfall stands at $474 million, including a significant and potentially crippling reduction to higher education. The governor and legislature have used cuts, reductions to dedicated funds, and one-time funds to partially plug the budget hole.