New state budget proposal could freeze pay raises for state workers

Published: June 24, 2020

By: Catherine Hunt, LSU Manship School News Service

BATON ROUGE, La. (LSU Manship School News Service) – A Senate committee on Wednesday passed a version of the state’s budget for the upcoming fiscal year and several other bills that could impact the state’s finances, including freezing pay raises for state employees. The bill, approved by the Senate Finance Committee, would use $90 million from the state’s rainy-day fund to fill budget shortfalls caused by nearly $1 billion in lost revenues estimated by state economists.

The Legislature is expected to use more than $1 billion in federal coronavirus aid to fill budget gaps. About half of those funds were used in the current fiscal year, which ends June 30, and the rest will be used in the fiscal year starting July 1.

The committee also passed three other bills Wednesday that would give about $9.6 million in tax breaks next year to hotels, retailers and restaurants trying to recover from the shutdown from the virus, which has caused more than 300,000 Louisianans to file for unemployment.

Meanwhile, the House gave final legislative approval to a tax break for the gambling industry which could cost the state $11 million next year and $83 million over five years.

Sen. Bodi White, R-Central, the chairman of the finance committee, said the various business tax breaks could total between $20 million and $25 million next year.

The Senate committee also included language in the budget bill that would temporarily freeze pay raises for state employees. That would save the state about $60 million. The money would be set aside in a separate fund, and the Legislature would consider whether to issue the pay raises later if the economy improved. If not, the money would be used to fill budget holes. Sen. Heather Cloud, R-Turkey Creek, supported the freeze, saying layoffs could be prevented “if we make wise decisions now as a Legislature.” The committee unanimously approved the plan. But Gov. John Bel Edwards, who also would have to sign off on the bill if it makes it out of the Legislature, opposed the move.

Read more at KALB