Gov. Edwards: budget situation "devastating" - KATC.com | Continuous News Coverage | Acadiana-Lafayette

Gov. Edwards: budget situation "devastating"

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Gov. John Bel Edwards Gov. John Bel Edwards

Gov. John Bel Edwards, less than a month out from his inauguration, took to the airwaves Thursday night to break some bad news to Louisiana: without new revenue, Louisiana will soon endure "unimaginable cuts".

"Tonight I speak to you as no other Louisiana governor has ever spoken to our state, because the challenges have never been so great, nor the impacts so severe for all of us who live, work or go to school here," Edwards said. 

Edwards said he had received "devastating facts from our state's economists showing that we are in an unprecedented position."

Without new revenue, hospitals in Lake Charles, Alexandria and Salubrious will close. The LSU Ag Center and parish extension offices in every parish and the Pennington Biomedical Research Center will close by April 1, he said. The LSU main campus in Baton Rouge, the Health Sciences Center in Shreveport and LSU-Eunice will run out of money on April 30.  Southern, UL and the Community and Technical system are in the same position, he added. Without new revenue, Louisiana's higher education institutions will be declaring bankruptcy and laying off staff, he said. 

"These are not scare tactics, this is reality - an unstable state budget will not only hurt children and working families in our state, it will devastate communities, businesses and local government as well," Edwards said. 

The problem? 

A $940 million budget deficit for the current fiscal year, which ends June 30, which includes $370 million "in commitments we made that we don't have the funds to pay for." For the 2016-17 fiscal year, a projected $2 billion deficit. 

"While my predecessor inherited a $1 billion surplus when he became governor, I've been left with almost a $1 billion deficit for this year alone and a $2 billion deficit next year," Edwards said. 

In addition, the state's revenue stream is strangled by tax credits, Edwards said. 

"In fact, we're paying out more in credits and refunds to corporations this year than we are collecting from them in taxes," he said. "This is not sound financial policy." 

Edwards reiterated his earlier call for new revenue and cuts to address the issues, including a state-wide hiring freeze, a reduction in state contracts, and more than $160 million in spending cuts; and using $128 million from the so-called "rainy day" fund, $200 million in BP non-coastal payments to address the deficit. He's also proposing reducing tax credits, suspending corporate tax deductions, adding a penny of sales tax to the current four cents, and an increase in alcohol and cigarette taxes. 

"To stabilize our state's budget we should not shy away from the fiscal right sizing that is needed. For me "right sizing" requires that we get both the spending and revenue right," Edwards said. "Focusing on one without the other would be irresponsible."

The governor predicted that others would try to downplay the situation.

"There are some who will try to downplay the severity of our problems for political gain," Edwards said. "Some will claim our state's economists' numbers are false. Others will say we simply need to cut our way out of this mess. Remember, for eight years we've had a conservative governor and a conservative legislature. If stabilizing the budget were as easy as cutting spending and simply reducing state contracts, that work would have been done. But it hasn't."

Edwards said it is time for citizens to get some straight talk about these issues.

"I don't say this to scare you, but I am going to be honest with you," he said. "No more tricks. No more smoke and mirrors."

Edwards closed his remarks by asking citizens to pray for him, the state and "all of our elected officials." 

To read the full text of his remarks, click here.

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