House OKs ‘rainy day’ fund usage

• By MICHELLE MILLHOLLON
• Advocate Capitol News Bureau
• Published: Jun 23, 2009 - Page: 1A

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The Louisiana House agreed Monday to take $86 million from a “rainy day” fund to resolve part of the state’s budget problems.

“This is offering an umbrella to you today. Three years from now, we’ll need an ark if we don’t handle this budget in a proper way,” said state Rep. Jim Fannin, D-Jonesboro and chairman of the House Appropriations Committee.

State fiscal experts expect state government to weather another three years of lower-than-expected revenue. Deep cuts in spending on state services and projects are necessary to balance the budget.

With three days left before the 2009 Louisiana Legislative Session comes to a close, lawmakers still are huddling on the $28 billion state budget. Both chambers must agree before the state’s spending plan is final.

The $86 million in House Concurrent Resolution 236 is far less than the $258 million the Senate wants to take from the “rainy day” fund to keep the budget cuts from being so deep.

State Sen. Mike Michot, R-Lafayette and chair of the Senate Finance Committee, said senators are not content to pull only $86 million from the $775 million “rainy day” fund.

Most of the discussions are occurring behind closed doors. The House peeled back the curtain by unexpectedly voting to take the $86 million from the fund. The issue now moves to the full Senate.

The fund, formally called the budget stabilization fund, was set up to tide the state over during deficits.

The state is facing a $1.3 billion drop in revenue in the upcoming fiscal year, prompting heavy cuts to be proposed for higher education and health care.

The state Senate wants to take $258 million from the “rainy day” fund, using $86 million in the budget year that starts July 1 and setting aside the rest for future years. The Senate’s proposal is stalled in a House committee.

Instead of considering the Senate plan, the House hastily wrote its own resolution Monday and suspended rules to hear it on the floor, bypassing a committee hearing.

State Sen. Rob Marionneaux, D-Grosse Tete, alerted the Senate to the House’s action.

He urged Senate President Joel Chaisson II, D-Destrehan, to take note. Chaisson authored the Senate’s proposal.